Some might argue the effectiveness and popularity of Government schemes to assist those buying property. However, new research from Zoopla, UK’s online property search provider reveals how Help to Buy has been a success and where in the country it’s been the most effective.
What is the Help to Buy loan scheme?
Yes, as a quick reminder, the Help to Buy loan scheme is designed to help those with only a 5% deposit, to get on the housing ladder. And currently, it’s only available when buying new-build properties. So, the home buyer puts forward a 5% deposit and the Government lends up to 20% of the property price; or up to 40% if you’re buying in London. This equity loan from the Government comes interest-free for the first five years. The remainder of the property is a covered by a mortgage.
Which regions have seen the biggest take up of Help to Buy?
By analysing equity loans across the country, Zoopla were able to establish where in the UK Help to Buy has been the most popular; and at the top of the list was Wakefield in West Yorkshire, which has seen a plethora of new homes being built. Wakefield rates as the largest Help to Buy region in the country with the average price for a home there being £221,740.
In second place was the unitary authority of Wiltshire, where a new build home costs on average £333,760. And in third place was County Durham where the average new home property price is £196,783.
And looking at London specifically, the area with the most Help to Buy loans there was The Borough of Tower Hamlets which has an average new-build home cost of £588,342. Coming second was Barnet where the average new home sets you back £520,408.
Regions with increases and decreases
With the data they collected, Zoopla were also available to look at the year-on-year change to the amount of Help to Buy loans secured. Peaks and troughs can be expected across the country as some areas experience an abundance of new-build homes coming through, while others struggle to keep up with demand. That said, the area with the biggest increase was the Borough of Waltham Forest which saw a 241.3% increase in the take up of the equity loan. However, over in Havant in Hampshire there was a significant decrease in the number of Help to Buy loans, being down 72%.
The benefits of the scheme
It’s clear the Help to Buy scheme continues to flourish across the whole country. And it will continue to do so for as long as new homes are being built and the Government invest in helping people get on the property ladder. These figures from Zoopla show it’s not just regions like London with limited affordability where Help to Buy is popular, but all over. The scheme has been invaluable for first-time buyers in helping them kickstart their home ownership future. And in many cases as we are seeing happening, first-time buyers are skipping smaller properties as their first purchase, instead choosing to go straight to the second step of the property ladder and a bigger family home.
All change for 2021
This current Help to Buy equity loan scheme will be ending in March 2021. It is going to be replaced buy a new scheme which is currently outlined to run from April 2021 to March 2023. However, this new scheme will differ somewhat. It will only be available to first-time buyers and there will be regional property price caps. So, we will have to wait and see how this affects the numbers – for the good or the bad.
Are you looking to buy a new-build home with the Help to Buy equity loan scheme? Start your new home search with our nationwide property finder here. You can also sign up to receive our latest news and offers on new developments coming to the market near you.
