Help to Buy purchases fall 18% in year to September

The number of homes bought in England using the Help to Buy: Equity Loan scheme totalled 43,617 in the year to September 2020, an 18% annual fall, new government figures have revealed.

Within this total, first-time buyers bought 35,893 properties under the scheme in the same period, which also reflected a 19% decrease compared with the year to September 2019.

The Ministry of Housing’s latest Help to Buy statistics, covering the third quarter of 2020, revealed there were 13,211 properties sold through Help to Buy: Equity Loan in Q3 – using a total value of equity loans of £945m to support the purchase of £4.12bn worth of property. Of these properties, 11,150 (84%) were bought by first-time buyers, using a total value of equity loans of £795m to purchase property worth a total of £3.39bn.

The total number of completions in Q3 were up by 127% compared to the previous quarter, after the Housing Ministry highlighted that the latest figures were still strongly affected by the coronavirus pandemic and the government measures taken to reduce transmission of the virus.

In England, Help to Buy: Equity Loan completions between April and June, the periods when the restrictions of movement were most in effect, were down by 61% against the respective months in 2019.

However, the latest figures also showed that completions in Q3 2020 had still climbed by 11% in comparison to the same period in 2019.

Commenting on the data, PRIMIS Mortgage Network proposition director, Vikki Jefferies, said: “The government’s Help to Buy scheme continues to be hugely popular among borrowers – particularly first-time buyers. Take up of the scheme soared even further in the third quarter of 2020, with first-time buyers continuing to make up the majority of purchases according to today’s statistics.

“The extension to the completion deadline for the current scheme further reflects the borrower demand that we have seen recently and will go a long way towards helping first-time buyers achieve their homeownership goals over the coming weeks.

“Current demand is also likely to continue as the financial impact of COVID-19 on households becomes clearer and more first-time buyers look to take advantage of government support to help them get onto the property ladder.”

Legal & General Mortgage Club head of broker relationships and propositions, Craig Hall, added that Help to Buy has provided a route for homebuyers to get a foot onto the property ladder, while supporting the UK’s new build sector.

“Mirroring the wider rise in demand across the mortgage market, the scheme supported thousands of new build home purchases last year,” Hall noted.

“However, Help to Buy is now changing and will be open only to first-time buyers with a series of regional price caps in place throughout the country. This is the biggest change to the Government’s equity loan programme since it first launched in 2013.

"Advisers will have a critical role to play in helping homebuyers understand the latest criteria for Help to Buy, as well as signposting the alternative options such as shared ownership and family support mortgages for those who no longer qualify under the new scheme.”

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