A total of 6,535 properties were bought using the government’s new help to buy mortgage guarantee scheme between April and September this year.

Latest data — covering the period from the launch of the scheme on 19 April to the end of September — show that 84% of these mortgages were taken out by first time buyers. 

The total value of mortgages supported by this scheme was £1.2bn.

The number of people using this scheme has increased significantly, with just 812 mortgage completions being registered between April to June.

Figures show that compared to the total mortgage completion in each region the scheme has supported a higher proportion of mortgages in the South East and Scotland, and a lower proportion in London, the North East and Northern Ireland. 

The average value of a property purchased or remortgages through the scheme was £196,702, compared to a national average house price of £269,945.

Figures show that 27% of all mortgage completions through the scheme to date are on properties in the lowest value band, and 63% are on properties worth £200,000 or less. Only 24% of mortgage completions are on properties valued at £250,000 and above. 

Data shows that more than a third (34%) of mortgages under this scheme were for terraced properties, 28% were for semi-detached properties and 22% for flats or maisonettes. Just 8% of these mortgages were to buy detached property. 

Under this scheme the government offers lenders the option to purchase a guarantee on mortgage loans, where the borrower has a deposit of less than 10%. The scheme can be used for mortgages on both new build and existing home and, unlike the help to buy equity loan scheme,  can be used by first-time buyers, home movers and those remortgaging. 

The scheme is not available on buy-to-let mortgage or second homes and the property value must be less than £600,000 to qualify. 

The guarantee compensation lenders for a portion of their losses should the property be repossessed. 

Quilter mortgage expert Karen Noye says that while the numbers using this scheme have increased, it is not currently looking to be the success the government had hoped for.

She says:  “The first set of data about the mortgage guarantee scheme was disappointing with just 812 mortgages using the scheme by the end of June, but this was understandable given it had only been in play for a matter of months and many buyers may have not even completed yet.”

These latest figures show a higher take up, but Noye says that just over 6,500 mortgages “pales in comparison” to the number of first-time buyers looking to get a foot on the property ladder.

“This low figure exposes a scheme that is clearly not helping generation rent as much as hoped.”

She says fears of a price dip, potentially trapping 95% buyers in negative equity may be dampening demand.  

She adds: “We are also at an interesting juncture where restrictions from Covid look set to be gone for good, but the ways of working adopted during the pandemic remain. With some companies forcing people back to their desks and others taking a more hybrid approach some workers will be waiting to see how their working life evolves before they make a big decision like buying a house. 

“Once people’s post-pandemic life is more clear there may be more people looking to buy and therefore use the scheme.”