The proportion of first time buyers is up and one of the key drivers of this sector of the market is Help to Buy says John Elliott, Managing Director of Millwood Designer Homes.
Sales to first time buyers are the highest on record according to the National Association of Estate Agents’ most recent monthly UK housing report. A third (32%) of total sales in October were to first time buyers, a nine per cent rise from September and the highest since records began in 2000.
In the new build market, Help to Buy is the single most important factor fuelling activity among first time buyers and its importance will continue for the next few years. Although it is not exclusively open to first time buyers, currently four in five new build purchases using the scheme are by first-time buyers.
The Help to Buy equity loan scheme provides support for people wanting to purchase property up to £600,000 with as little as a 5% deposit. The Government provides an equity loan up to a 20% of the purchase price that is interest free for the first five years, leaving the buyer only needing to find a mortgage for the remaining 75%. In London, the equity loan available is up to 40% of the property value.
Although the Government has recently announced the end of its Help to Buy mortgage guarantee scheme, it remains committed to the Help to Buy equity loan scheme and recently said it would be extended until 2020. We firmly support the Help to Buy initiative as a means to assisting homeownership, especially for first time buyer who would not otherwise have been able to get on the property ladder.
We have seen strong uptake of Help to Buy at our developments: at Standgrove Fields in Ardingly and Woodlands View in Hastings at least half of the homes sold have been through the scheme and it will be available at Little Logmore in Dorking, Windsor Meadows in Marden, Brambledown in Maidstone and Chartway Street in Sutton Valence.