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Help to Buy 2 completions top 7,000

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29/05/2014
More than 7,000 properties have been purchased using the Help to Buy mortgage guarantee since launch, government figures have shown.
Help to Buy 2 completions top 7,000

Help to Buy 2 has courted controversy since its launch in October but assisted the purchase of 7,313 homes between its arrival and 31 March 2014.

Of those Help to Buy properties 80% were purchases by first-time buyers with almost half (45%) on homes valued at £125,000 or less.

The North West and South East of England proved the most popular areas for the scheme with more than 1,000 completions in both regions.

England was the most popular nation for the scheme, recording 5,890 completions in the first six months. Scotland saw 957 sales, Wales 369 and Northern Ireland 97.

The average property purchased using the scheme had a value of £151,597, which compares to a national average house price of £252,000.

However, during the first six months of the scheme 31 properties worth over £500,000 were purchased using the scheme.

In addition, 10% of completions were made by households with an average income of more than £80,000.

The Treasury figures also showed the scheme increasing momentum over the first six months of its life. March provided the busiest month so far with 2,657 completions during the month.

Charles Haresnape, Aldermore Bank mortgages managing director, said: “This shows that the scheme is proving successful and fulfilling its original aims of helping first-time buyers, those on low incomes and those outside of London and the South East.

“There has been much rhetoric on the scheme in recent weeks and the dangers of causing a housing bubble, but Help to Buy remains a small proportion of total sales in the housing market and has no real impact in London, which is seeing higher inflation. Lender affordability measures remain paramount and will naturally limit mortgage sizes, so we should see the pace of house price rises in London reduce somewhat.”

Separate figures have also been released for the first part of the Help to Buy scheme, the equity loan. In the year to 30 April 2014 there were almost three times the number of properties bought with 20,548 properties purchased using the scheme.

First-time buyers accounted for 87% of the total with an average purchase price of £205,424.

Leeds proved the most popular area for the scheme with 353 completions in the last year.

Jeremy Duncombe, director at Legal & General Mortgage Club, said: “Help to Buy 1 should encourage more house building, and this will be crucial if the recovery is to continue in the long term.

“By helping to stimulate demand for houses, the scheme will encourage builders to feel more confident about committing to building some of the 250,000 new homes this country needs each year. More houses will keep prices affordable and help prevent those on lower incomes from being priced out of the market.”

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