The government’s flagship housing scheme celebrates its fifth birthday this year!
Since its inception in 2013, Help to Buy has been supporting first-time buyers and homemovers in securing their dream home.
The Help to Buy: Equity Loan especially has quickly become one of the most popular routes into homeownership.
By allowing those with a minimum deposit of 5% to borrow 20% of the house price interest free for five years, the loan scheme has helped people buy as many as 160,000 homes since 2013.
The government also recognised that even a 5% deposit could potentially be a struggle for some borrowers. That’s why they launched the Help to Buy ISA in 2015.
This tax-free savings account offers savers a bonus of 25% on top of savings of up to £200 a month, to a maximum of £3,000, which is paid to the solicitor once the borrower is ready to move.
2017’s figures show that 365,000 first-time buyers took out a mortgage, a full 7% more than 2016. This was the highest level in more than a decade, which suggests that all the Help to Buy schemes combined have become effective in supporting borrowers.
There is also evidence it supports house building as well. In fact, housing supply in 2017 had increased again for the fourth consecutive year. Help to Buy loans helped fund the purchase of many new build properties, with more than eight out of 10 bought by first-time buyers: the scheme’s intended target.
As the initial take up on Help to Buy was so positive, there are many clients that could potentially be looking at the final days of their interest-free five-year period.
Some industry experts are concerned with how soon the proposed end date for Help to Buy will come.
Despite the government pledging a further £10bn in last autumn’s budget, Help to Buy is scheduled to expire in April 2021.
Many in the industry are hopeful that an announcement will be made sooner rather than later regarding the future of Help to Buy.