While many people are putting their property buying plans on hand, there will be some people keen to review their options. There is a lot to be said for making an informed decision, and reviewing your options in the housing market will help buyers to feel more confident. With help to buy changes looming, the market will change.
One aspect that has helped many buyers in recent years, but which won’t be around forever is the Help To Buy scheme. This is changing next year, and the scheme is due to end in 2023. For the 12 months leading to September 2019, there was an increase in the number of property buyers using the Help To Buy equity loan scheme of 4.6%.
Many first-time buyers will benefit from help to buy changes
There was a total of 52,703 transactions in this time, and first-time buyers accounted for 43,686 of these sales. This amounted to an increase of 6.2%.
Since the scheme launched in 2013, a total of 250,000 transactions have taken place. The full value of these equity loans is £13.31 billion and the value of the properties which have been sold through the scheme is listed as £65.69 billion.
The support on offer to first-time buyers is seen in the fact that 81% of the total purchase value was attributed to these buyers.
Anyone interested in the average price of property purchased through the scheme should note this was £264,785 while the mean equity loan figure was £57,694.
London buyers had extra help to step on to property ladder
Of course, the maximum equity loan for buyers in London was higher. This rose from 20% to 40% in February of 2016. From this point, to the end of September 2019, a total of 17,287 sales concluded in the English capital and 15,085 were purchased with an equity loan greater than 20%.
The system is set to change in 2021 with regional price caps coming into effect. This will limit the size of properties bought with this scheme. There will be a deadline of 31 March 2021 for legal completions. Then, the amended Help To Buy scheme will continue to operate until March 2023.
Craig Hall is the Head of Broker Relationships and Propositions at Legal & General Mortgage Club, and he said; “Help to Buy was never meant to be a permanent fix, and it is great to see that both providers and lenders are already innovating to fill the gap, launching more higher-loan to value (LTV) mortgages that reduce the deposits first-time buyers need. Shared ownership and mooted schemes such as the First Homes initiative could also play a role in the post-Help to Buy mix. For those already using the scheme, the journey isn’t over.”
Craig continued by saying; “Ensuring a smooth transition for these borrowers with clear Help to Buy remortgage options will be vital to helping them with their housing plans in the future. It’s crucial mortgage advisers are on hand to explore the best and most affordable options to suit the individual customer needs.”
With these help to buy changes, it is more vital than ever buyers review their options.
Anyone with mortgage questions should be proactive in seeking guidance or assistance. This is a period of significant uncertainty, but help is always available. Also, it is unlikely assistance will be offered unless it is requested, so it is important for mortgage owners to stay on top of their finances and their situation.