Mon 15 Sep 2014
Fact. Not Fiction: London and the South East grab their share of ‘Help To Buy’ ...
London and the South East grabbed the largest share of Help To Buy loans, according to the latest figures, showing more than 48,000 homebuyers have used the government scheme aimed at homebuyers with small deposits.
In the first nine months after its launch, the Help To Buy mortgage guarantee supported 18,564 purchases, backing mortgages worth a total of £2.7bn. Of the £12bn worth of guarantees set aside, just £388m had been used by the end of June.
There are concerns that subsidies have triggered a surge in house prices; 7,501 buyers in the South East and 2,837 in London have taken out either an interest-free loan on a new build home or used the mortgage guarantee that allows them to buy a home with only a 5% deposit. The popularity of the scheme in the south-east pushed the north-west into second place.
The mortgage guarantee has proved the most controversial element of the scheme because it allows buyers to effectively increase the level of deposit used to buy a home and overcome mortgage restrictions imposed by lenders. As with the other part of the scheme, it is open to all and can be used on properties costing up to £600,000.
According to Mortgage Advice Bureau, the average Help to Buy loan is £6,000 lower than the average was in May.