The Help to Buy (HTB) scheme was used to fund 8,913 house purchases in the final quarter of 2021, government figures show – a 41% drop annually.
Overall, since April 2013, HTB has been used to complete the sales of 355,634 houses, with the total value of the loans given out hitting £22bn, the figures add.
The government also released HTB individual savings account (Isa) details today, 11 May. The statistics show that 480,494 properties have been bought using this savings vehicle, with a total of £714m paid out through 630,264 bonuses.
The average bonus garnered through such an Isa is £1,132, according to the data, and the average age of a first-time buyer (FTB) using an HTB Isa is 28, compared to the national first-time buyer average age of 30.
Quilter mortgage expert Karen Noye says: “While the schemes are well meaning, the figures show just how few FTBs are actually supported by them. House prices have soared dramatically over the past couple of years, yet the mean value of a HTB purchase price remains at just £175,849 compared to an average FTB house price of £228,627 and a national average house price of £274,712.”
And Hargraves Lansdown senior personal finance analyst Sarah Coles comments: “Soaring house prices over the last couple of years have made a mockery of the HTB Isa limits.
“You can’t buy an average property using n HTB Isa, and you can barely buy the average home for a FTB. House prices have risen by a third since this type of Isa was introduced in December 2015, but the limits haven’t shifted at all. It means that for anyone approaching the limits of the scheme, the Lifetime Isa may be nicer.
“In London the difference is particularly striking, because the average home costs £80,000 more than the scheme’s £45,000 limit, but even elsewhere in the UK, the average property costs almost 10% more than the scheme limit of £250,000. It means those who are relying on the government top-up to afford a property could get to the point of buying and realise they’ll breach the limit – so can’t get the bonus after all.”
The criticisms don’t end there. Shaw Financial Services founder Lewis Shaw adds: “When these chickens come home to roost, the levelling up department will be flattened. With rates rising, incomes stagnating, and a lot of HTB loans maturing this year, and for the next couple, many borrowers could find they aren’t in a position to remortgage and pay off the government loan.
“This will mean one of two things: either sell up and move somewhere else or get stuck paying interest on the HTB element until they can repay that debt.”
Shaw continues: “So many people have been fooled into using HTB. It’s been one giant con from the start and has been directly involved in pushing house prices higher and faster than they ever needed to.
“The only people that have really benefited are developers and their shareholders in bumper dividend payouts and the government who have piggy-backed on soaring property prices rises which they engineered themselves. Or maybe I’m just too cynical.”
