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10 March 2016
Doug Crawford, CEO of My Home Move, comments on DCLG’s Help to Buy Equity Loan Scheme data for Q4 2015
“In the news we are constantly being reminded of today’s record low interest rates and the competitive mortgage deals on the market, however with ballooning house prices, there is little light at the end of the tunnel for those aspiring to be a homeowner.
“First time buyers are especially missing out in today’s market due to a dwindling supply of housing for sale and shortage of suitable homes. The Help to Buy equity loan scheme has made some headway in addressing this freefall by offering a loan of up to 20% of the property price. From its launch in April 2013 until the end of 2015, the data shows that the majority are taking the maximum loan available. The typical borrower under the scheme has borrowed a fifth of a £220,825 property value – the maximum loan available to them.
“We are now seeing high numbers of those using the HTB scheme also relying on a gifted deposit for the upfront cash required. Our own data showed that 47% of HTB properties were purchased with a gifted deposit last year. Affordability issues are at the core of the struggle to get on the housing ladder, especially in areas with high demand where the average price of new dwellings is rocketing. In Q4 2015 new build properties were priced at £404,000 in the South-East and jumped to £490,000 in London.
“Further action is still fundamental to helping the housing crisis for those who are working hard to become a homeowner and are simply priced out.”