Posts with tag: help to buy scheme

Help to Buy Holding Up the Housing Market

Published On: December 10, 2015 at 5:01 pm

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The Government’s Help to Buy scheme has helped support the strength of the housing market, according to property experts.

Help to Buy Holding Up the Housing Market

Help to Buy Holding Up the Housing Market

In September, 2,252 buyers, mostly first timers, used the scheme, making it a record third quarter.

Buyers are given an interest-free loan to top up their deposits. This is financed by the taxpayer.

However, some believe that the popularity of Help to Buy could push house prices up in the future.

Ray Boulger, of John Charcol mortgage advisers, says: “Overall the proportion of sales accounted for by Help to Buy is 40% and on some building sites it is reaching 70%. That makes it massively important.”1

Since the scheme was introduced in early 2013, over 62,500 homes worth £13.6 billion have been bought with Help to Buy loans worth £2.7 billion, according to official data.

Ministers have noted that first time buyers made four out of five Help to Buy purchases, many of them at the lower-end of the property market.

However, LSL Property Services warns that Help to Buy and other schemes for first time buyers could cause house prices to soar.

The increase could arrive as buy-to-let landlords rush to purchase property before the 3% extra Stamp Duty rates come into force in April. Read more about the changes here: /16883-2/

LSL’s Adrian Gill comments: “There will be a growth in demand from both first time buyers with extra financial support and buy-to-let landlords hoping to invest before the tax changes come into force.”1

The Help to Buy Equity Loan for new build homes will continue until 2020, while Help to Buy Mortgage Guarantee, which helps buyers of new and existing properties, will end in a year’s time.

1 http://www.bbc.co.uk/news/business-35051348

 

 

 

 

 

 

 

 

 

London Help To Buy Scheme Announced

Published On: November 27, 2015 at 10:18 am

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Categories: Property News

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In the Autumn Statement, the Help to Buy scheme was altered slightly to assist first-time buyers looking to purchase property in the capital.

The scheme is very similar to the existing Help to Buy equity loan, but now, those looking to buy in London can borrow up to 40% of the home’s value, instead of the previous 20%.

Changes

London Help To Buy will apply to new properties worth up to £600,000 in any of the capital’s boroughs and the City of London. Applicants have to be eligible for a mortgage in order to qualify for the scheme. In addition, mortgages must be for at least 25% of the overall property value.

Adrian Anderson, director of mortgage broker Anderson Harris, commented that, ‘Help to Buy has been hugely successful across the country but hasn’t had such a big impact in the capital because property prices are that much higher. Offering a 40% interest-free loan to London buyers will make a huge difference, enabling many to get on the housing ladder when they simply couldn’t before.’[1]

London Help To Buy Scheme Announced

London Help To Buy Scheme Announced

‘Take the example of a one-bed flat in Camberwell on the market at £360,000. A 5% deposit works out at £18,000 but if you don’t buy via Help to Buy, you then need to raise a mortgage for the remainder, which requires earnings of circa £85,000, pricing out many buyers,’ Anderson continued. ‘Under London Help To Buy, a 40% interest-free loan would be available, leaving you with a mortgage of just £198,000 to raise. This could be done with an income of £50,000, which is much more achievable in the capital,’ he concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2015/11/london-help-to-buy-scheme-launche

 

 

 

Help to Buy Has Pushed Up Prices

Published On: September 10, 2015 at 5:20 pm

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Categories: Landlord News

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The price of the average starter home has risen by almost 19%, to £213,000, since the Government’s Help to Buy scheme launched around two years ago.

More first time buyers are now competing for a limited number of homes, insists property expert Henry Pryor. He says there is “little doubt” that it’s the scheme pushing up prices, and urges the Government to end the incentive.

He adds: “Turn the Help to Buy tap off and concentrate on providing more builders to build more homes.”1

1 Hedges, L. (2015) ‘Help to Buy ‘has driven up prices’’, Metro, 10 September, p.6

 

 

£26m fund to assist new home building

Published On: August 13, 2015 at 9:15 am

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House builders in the UK have been buoyed with the news that a £26m fund has been set aside, with the intention of introducing the first batch of starter homes for first-time buyers.

Communities Secretary Greg Clark promised that high-quality homes would be made available as a result of the fund and that first-time buyers will have a range of different property types to choose from.

Support

The windfall will be used to support architects, developers, housing associations, councils and small builders to supply properties that will increase quality of design, with the government planning to deliver 200,000 starter homes by 2020. Money from the fund will be used to obtain brownfield sites, with money from the sales of these sites going back to the government, ensuring top value for the taxpayer.

In addition, the government has offered more support to aspiring home owners by making £10m available for authorities to prepare additional brownfield land for the eventual development of future starter homes.

Mr Clark said, ‘we are committed to delivering 200,000 starter homes by the end of this Parliament, providing a real boost to aspiring young first time buyers. The competitive fund will build homes that will clearly show the wide range of new properties that will be available for first-time buyers as they take their first step on the housing ladder.[1]

‘We are also helping bring back into use more brownfield land for development, keeping the country building and delivering the homes our communities need,’ he added.[1]

£26m fund to assist new home building

£26m fund to assist new home building

Dreams

A priority for the government is to assist young people to achieve their dream of buying their own home, according to housing minister Brandon Lewis. He pointed out that in excess of 100,000 households have been assisted in buying a property through the Help to Buy Scheme.

‘This fund will help kick start that change and show young people across the country the quality they can expect when the buy a starter home,’ said Lewis, who went on to say that, ‘it’s further proof that this government’s long term economic plan is on track.’[1]

Meanwhile, the Homes and Communities Agency said that it will support the starter home initiative by offering land and expertise, helping more first time buyers into home ownership.

Chief Executive Andy Rose said, ‘we look forward to working with our key delivery partners including councils, developers, housing associations, small builders and architects in taking this forward, through the identification and purchase of land suitable for exemplar starter home sites.’[1] 

[1] http://www.propertywire.com/news/europe/uk-starter-home-fund-2015081210857.html

 

 

Average Price of Affordable Home is Around £190,000

Published On: July 27, 2015 at 3:58 pm

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The average price paid for a home under an affordable housing scheme has hit around £190,000, according to research by the Halifax.

The average price of £189,786 is just 4%, or £7,750, lower than the average of £197,535 for house purchases as a whole.

Regionally, the highest average price paid by a buyer using an affordable housing scheme is in London, at £323,148. The lowest average price, of £147,437, is in the North of England.

Average Price of Affordable Home is Around £190,000

Average Price of Affordable Home is Around £190,000

However, the average price of a property sold in the capital under one of these schemes is 33% lower than the overall London price of £482,579.

The study also reveals that first time buyers benefit the most from affordable housing schemes, accounting for 80% of Help to Buy purchases, compared with just 46% of all mortgage-financed property purchases made by first time buyers over the same period.

In the past 12 months, economic recovery and Government schemes, such as Help to Buy, have aided the highest number of first time buyers to purchase a home for seven years.

Recent official data shows that Help to Buy equity loans and mortgage guarantee schemes and NewBuy have helped 99,601 buyers purchase a home since Help to Buy was launched in the 2013 Budget.

First time buyers made four out of five, or 79,680, of these purchases.

The average price paid by first time buyers using these schemes is £150,361, around 10%, or £16,732, lower than the average price paid generally by first time buyers, at £167,093.

First time buyers in London experience the greatest benefits from affordable housing schemes, with an average price of £236,733, which is 36% lower than the average price paid by a first time buyer generally, at £367,961.

Mortgages Director at the Halifax, Craig McKinlay, says: “Many of the affordable homeownership schemes available have been designed specifically to help first time buyers get on the ladder and support construction of new build homes and the latest official figures show this has been successful.

“As the economy continues to recover and mortgage interest rates remain at very low levels, we expect to see continued growth in first time buyers during the second half of the year.”1

The research also analysed the profiles of borrowers buying a home under affordable housing schemes, to determine typical users. It discovered that 17% of affordable housing transactions in the 12 months to May 2015 were in Scotland, followed by 15% in the South East and 10% in the North West.

Comparatively, 20% of all housing transactions were in the South East, 12% in Scotland and 10% in London.

The average annual income of a homebuyer using an affordable housing scheme is £31,886, 5% lower than the average earnings of all those in full time employment, of £33,475.

Regionally, the average earnings of buyers under these schemes ranges from £50,254 in London to £29,031 in the North West.

Affordable housing schemes have especially helped younger buyers, with 37% of all buyers using a scheme aged from 20-29, compared to just 25% of all home buyers.

1 http://www.propertywire.com/news/europe/uk-affordable-homes-research-2015072710791.html

Mortgage Approvals Reveal Further Drop in Sales

Published On: January 30, 2015 at 3:16 pm

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The recent slowdown in house sales may remain for the next few months at least, according to new research.

The amount of new mortgage approvals to house buyers in December, which have not yet been lent, increased marginally to 60,275 revealed the Bank of England (BoE).1

Despite the approvals figures being slightly higher than in November, they were down by 17% on December 2013.

Approvals had been at a monthly average of 67,203 for the first half of 2014, however the second half of the year saw that average drop to 61,669.1

Property sales in the UK rose by 14% for the whole of last year to 1.22m; the highest figure since 2007.1 However, these numbers steadied in the last few months of the year, slowing house price growth.

Recent studies found that property prices around the UK have plateaued since last summer.

Future progression

Economy experts have predicted improvements in the housing market.

Mortgage Approvals Reveal Further Drop in Sales

Mortgage Approvals Reveal Further Drop in Sales

IHS Global Insight’s Howard Archer says: “The first rise in mortgage approvals for six months in December reported by the BoE supports our suspicion that the weakening in housing market activity may be drawing to a close.

“Of course, not too much should be read into one month’s data and mortgage approvals are still at a low level.”1

Consultancy firm Capital Economics believes that the slight increase in approvals reflects several influences: “Housing demand is being supported by further falls in interest rates. Indeed, data on mortgage rates also released this morning showed that the effective rate on new loans dropped for the third consecutive month to just 3% in December, down from 3.2% in the summer.

“Meanwhile, rising real earnings and the reform to Stamp Duty have boosted prospective buyers’ purchasing power.”1

Help to Buy

The Government’s Help to Buy scheme was introduced in April 2013, aiding the purchase of 41,533 properties in England, says the Department for Communities and Local Government (DCLG).1

This system is designed to help people who cannot afford a high deposit, by offering them a loan towards the purchase price of a home.

In the 21 months to December 2014, a total of £1.75 billion value of loans were offered, at an average value of £42,239 each.1

Of the total purchases, 34,419 (83%) were made by first time buyers.1

Figures from the Office for National Statistics (ONS) reveal that the average rent paid in the private rental sector increased by 1.7% last year. They rose fastest in London, by 2.4%, followed by the South East at 2.1%, and Scotland by 2%.1

1 http://www.bbc.co.uk/news/business-31055557