Demand for Help to Buy and shared ownership schemes hit record levels, with 17.2 per cent of first-time buyers using one of the schemes last year.

Take up of these programmes is being driven by rising house prices and stricter deposit requirements by lenders, according to price comparison site Reallymoving.

This compares with a 15.9 per cent combined use of these schemes in 2019 and 13.1 per cent in 2018.

Last year, shared ownership was the most popular option, accounting for 10.1 per cent of all first-time-buyer transactions, compared to 7.1 per cent using Help to Buy.

Reallymoving says in 2020 first-time buyers faced “the combined challenges of rising prices post-lockdown and the shrinking of the first-time buyer mortgage market in response to the pandemic”, although higher loan-to-value products began to return towards the end of last year.

Average house prices in the UK rose 8.5 per cent in the year to December, the highest annual rate since October 2014, according to the ONS House Price Index.

Also, average first-time buyer deposits increased by £10,000 last year to £57,278 and as high as £130,357, according to the Halifax House Price Index in December.

The comparison site says: “Consequently, demand is being funnelled into the new build market where government schemes require a deposit of just 5 per cent.”

Changes to both Help to Buy and shared ownership will come into force at the beginning of April 2021, although the current Help to Buy scheme has also been extended until the end of May, allowing for construction delays as a result of the pandemic, giving buyers more time to complete.

The new Help to Buy scheme, running until 2023, will be restricted to first-time buyers only and will operate with regional price caps in place.

However, Reallymoving adds: “Buyers should also bear in mind that strong demand for Help to Buy homes can mean they come with an asking price ‘premium’, increasing the risk of negative equity if prices fall.”

The new shared ownership scheme will allow buyers to purchase a minimum share of just 10 per cent compared to 25 per cent previously, making it more accessible, and will permit staircasing in instalments of 1 per cent, rather than 5 per cent or 10 per cent currently.

A new ten-year period will be introduced for maintenance and repairs, whereby the landlord or housing association is required to cover costs rather than homeowners, allowing them to staircase more quickly.

Buyers who have bought through the shared ownership scheme need an up-to-date valuation when they come to sell or if they wish to staircase, to gain the current market value.

Also, buyers who have used a Help to Buy require a new independent valuation if they wish to pay off part or all of the loan, or if they wish to sell the property, as the amount they pay back is based on the current market value.

Reallymoving has launched a new price comparison service for property valuations, allowing homeowners who have bought through shared ownership or Help to Buy Equity Loans to arrange a Royal Institution of Chartered Surveyor’s valuation of their home.

The service allows users to compare the fees of up to four RICS-regulated chartered surveyors in the local area, as well as offering price comparison tools for conveyancing, surveying, removals and energy efficiency ratings.

Reallymoving chief executive Rob Houghton says: “Based on the current average first-time buyer purchase price of £249,000 in the UK, buying a 10 per cent stake in a shared ownership property could require a 5 per cent deposit of just £1,246 – an attractive prospect for those looking for an affordable way onto the housing ladder.”

Houghton adds: “We’re now seeing record levels of first-time buyers using either shared ownership or Help to Buy, with the impact of the pandemic boosting demand further as buyers struggle to raise even larger deposits required by lenders, on top of higher house prices.”