More than 2,000 people have put in offers on homes under the Help to Buy scheme, totalling £365 million of new mortgage lending.
The applications are backed by a ‘decision in principle’ by RBS and Lloyds, the first 2 participating banks, for 95 per cent mortgages. Ten of the 2,384 applications have already completed.
The figures demonstrate that government-backed Help to Buy scheme is supporting responsible lending. On average households have asked to borrow around £155,000 for houses worth about £163,000, which is below the UK average price of £247,000.
More than three quarters of the applicants are first-time buyers and many in their early thirties, demonstrating that Help to Buy is helping hardworking people realise their home-owning aspirations.
Could you benefit from Help to Buy? Visit the Help to Buy website to find out more.
The Prime Minister said: "Four weeks in and it’s clear that Help to Buy is already delivering. In just one month, over 2,000 people have been accepted for a Help to Buy mortgage. Or put another way, 75 families every single day have been put on the path to owning their dream home.
"But the best thing about Help to Buy isn’t the statistics - it’s who is really benefiting. Most Help to Buy applicants are first-time buyers, young and have a roughly average household income. This is all about helping hardworking people get on the first rung of the property ladder - and helping them get on in life.
"Owning a home is about more than 4 walls to sleep at night. It’s about independence, self-reliance, moving on and moving up. Above all, it’s about aspiration. Help to Buy is helping people realise the dream of home ownership - and it’s a key part of my plan for Britain."
Applicants will face average monthly repayments of around £900 and have an annual household income of around £45,000. This means a Help to Buy mortgage represents 24 per cent of borrowers’ gross income, which compares to the historical Council of Mortgage Lenders’ average figure of 24 per cent across the UK.
A 2-year fixed rate 95 per cent mortgage for the average house under Help to Buy is also £2,557 cheaper per year, compared to the equivalent mortgage from 2007.
Help to Buy has seen applications for 95 per cent mortgages massively increase the size of the market - giving first-time buyers the same kind of opportunities to buy their own homes as their parents and grandparents. A 95 per cent mortgage has been the route to ownership for most first-time buyers over the last 30 years.
The banks have received applications from across the country with more than three quarters coming from outside London and the South East.
Almost 65 per cent of the UK mortgage market has now signed up to Help to Buy and more mortgage products from HSBC, Barclays, Santander, Virgin Money and Aldermore will be released in the coming months.
The government’s Help to Buy equity loan scheme, launched earlier this year, has had an impact on house building and has allowed more than 42,000 people to buy newly built homes. Housing starts are now a third higher than at the same time last year and it is clear house building will remain a critical part of our economic recovery.
