Record number bought through Help to Buy in year to end of March

Posted on Sunday, August 22, 2021

Over 55,000 households bought homes through Help to Buy equity loan in the financial year 2020/21, an all-time high for the scheme.

Government figures out today show that in the year to the end of March, 55,649 homes were bought using Help to Buy equity loans, with a total of 328,506 purchased through the scheme since it began in 2013.

To date, over £20bn has been lent to those buying through help to buy, with the purchase of 328,506 homes.

A total of 15,341 homes were bought using Help to Buy loans between January and March 2021, up 61% from the same quarter a year earlier.

Housing secretary Robert Jenrick MP says: “Over 55,000 households bought their home with the support of Help to Buy Equity Loan last year: a record year for the scheme, which is helping young people and first-time buyers feel the sense of pride and achievement that comes with owning your own home.”

It was also announced earlier in the week that home builders across the country can bid for a share of £150m to support roll-out of the new First Homes scheme, which helps local first-time buyers onto the housing ladder.

Hargreaves Lansdown personal finance analyst Sarah Coles says the schemes is more attractive to first-time buyers trying to raise deposits due to rising house prices, there are also risks involved.

“Help to Buy equity loans provide an answer to the impossible question of how to buy in a rapidly rising property market. Most people who use them have a 5% deposit (54%), and the scheme stops them battling to raise a bigger percentage of the property price at a time when the average property rose more than £27,000 in a year.

“However, while Help to Buy loans offer a solution to those struggling to buy in a rising market, the way they work means the same rising market will have a sting in the tail for anyone who takes advantage. When the loan is eventually repaid to the government, the amount that needs to be paid back depends on the value of the house at that time. If you borrow 20% of the purchase price, you repay 20% of the value after five years, so when prices rise, so do your repayments.”

“If you’re working hard to build a deposit, Help to Buy isn’t your only option. If you’re aged 18-39, and you plan to buy your first property a year or more down the line, you could also consider saving at least some of the deposit in a Lifetime ISA. You can put £4,000 a year into a LISA and the government will immediately top it up by 25% – so you could get £1,000 a year from the government to help you onto the property ladder. And through the LISA, this never needs to be paid back.”


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