Is Help to Buy Helping?

Enable’s IFA’s in Bishop’s Stortford wonder where the Help to Buy scheme will lead as it is having more and more of an influence on the housing market. Recent treasury figures reveal that the scheme has been responsible for 6.6 per cent of all house purchase transactions since April 2013 - up from 4 per cent in May.

Some 29,829 new-build homes have been bought through the equity loan scheme and a further 18,564 properties have been acquired by a mortgage guarantee through Help to Buy mortgage guarantee scheme, which launched last October. First-time buyers make up the vast majority of transactions through Help to Buy, with 85 per cent of Help to Buy 1 and 85 per cent of Help to Buy 2 borrowers purchasing their first home using the schemes.

Help to Buy was the flagship policy of last year’s Budget and aims to boost the availability of 95 per cent loan to value mortgages. The scheme works in two parts; the first part came into effect in April as a shared equity scheme for new build homes. The second part, a £12bn mortgage indemnity scheme with the potential to support up to £130bn of lending, which was launched by Mortgage Strategy in February last year, came into force in October for all properties worth up to £600,000.

Chancellor George Osborne says: “It’s great to see that nearly 40,000 first-time buyers have been helped onto the housing ladder by the Help to Buy scheme. Importantly, Help to Buy is also driving a big increase in house building in Britain, boosting the construction industry and increasing housing supply.” Enable’s IFA’s are always pleased to see schemes that help first time buyers to get their feet on the housing ladder but what is the scheme overall doing to house prices?

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

This week lending to first-time buyers was seen to be up 31% ...

In the news this week the value of residential loans advanced to first time buyers has been seen to have increased by £1.9bn over the past year to £8bn, an increase of 31 per cent. Data published recently by the Bank of England and the Financial Conduct Authority also shows gross first-charge mortgage advances were up 26 per cent year-on-year in the second quarter of 2013, from £32.5bn to £41bn.

SPF Private Clients chief executive Mark Harris says: ”More first-time buyers are returning to the market, with a small increase in those borrowing more than 90 per cent LTV. With the Help to Buy scheme guaranteeing loans for buyers with modest deposits, we expect this trend to continue."

"While George Osborne has stated that high loan-to-value mortgages are not ‘exotic weapons of mass destruction’, borrowers must still ensure that they can afford a high LTV mortgage before taking the plunge.”

The proportion of total lending above 90 per cent loan-to-value was 2.5 per cent, while the proportion of lending above 95 per cent LTV was 0.5 per cent. A year ago, total lending above 90 per cent LTV was 2.1 per cent. The number of new loans in arrears in the second quarter totalled 32,520 in the second quarter, down from 34,456 a year earlier, while the total number of accounts in arrears fell from 296,484 to 292,181 over the same period.

As experienced IFA’s at Enable we will help you find the right mortgage for you.

Your home may be repossessed if you do not keep up repayments on your mortgage. 

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE.