Out-Law News | 30 May 2014 | 4:39 pm | 1 min. read
The new figures, released on Thursday, show that 27,861 homes have been purchased under the scheme to date, representing around 3% of overall house sales.
Under the equity loan branch of the scheme, the government offers loans of up to 20% of the property's value to buyers of new-build homes. The data shows that 20,548 properties have been bought using equity loans since their launch in April 2013. Of the total sales, 87% were to first-time buyers and 94% of properties purchased using equity loans were outside London.
Under the mortgage guarantee branch of the scheme, the government provides mortgage guarantees for the purchase of homes valued at £600,000 or less. Since their introduction in October 2013, 7,313 properties have been bought with the support of mortgage guarantees. Of that number, 80% of sales were to first-time buyers and only 5% of properties purchased were in London.
"Whether or not this scheme has influenced London’s property market is debatable, but what is certain is that a radical solution to the capital’s housing crisis is still needed", said Rebecca Warren, a planning law expert at Pinsent Masons, the law firm behind Out-Law.com.
"Help to Buy remains an important tool in the short-term if first-time-buyers are to get onto the property ladder, but the problems can only be fixed for the long-term by a drastic increase in the number of new, affordable homes being built," said Warren. "The government needs to work closer with financial institutions, the infrastructure sector, local authorities and the housebuilders themselves to address this issue."
"Affordable housing is still a problem up and down the country, and in truth Help to Buy has only helped a small proportion of homebuyers," said Warren. "With 200,000 new homes needed every year just to meet demand, government policy must focus on making this level of construction a reality.”