First time buyers rush to take advantage of Help to Buy

Following the announcement that the government is to scrap the Help to Buy mortgage guarantee there has been a significant rise in the number of valuations for first time buyers, writes Poole-based property developer Richard Carr.

Deadline

First time buyers - Richard Carr

First time buyers rush to take advantage of Help to Buy mortgage

The mortgage guarantee ends at the year and the number of first time buyers requesting valuations has rising sharply since Chancellor Philip Hammond’s announcement.

According to Connells Survey and Valuation, the number of valuations for first time buyers rose by 18.7% in September on an annual basis.

John Bagshaw of Connells Survey & Valuation believes that many first time buyers are aiming to use the scheme before it closes at the end of December, however he doesn’t think first time buyer activity will suddenly drop at the start of 2017.

Richard Carr hopes that the government are able to benefit first time buyers by building more homes as a result of removing the Help to Buy mortgage guarantee.

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Popular Help to Buy scheme scraped by the government

185,000 UK home owners had benefitted from government Help to Buy schemes, which will now be scrapped by the end of 2016, writes property developer Richard Carr.

Prices

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How will scrapping the Help to Buy scheme effect first time buyers?

Despite the schemes proving popular amongst first time buyers, the initiatives haven’t helped solve the country’s growing housing crisis, which the new government led by Theresa May are keen to do.

According to one estate agent emoov.co.uk, the average house prices across half of the country’s 326 districts will exceed the Help to Buy threshold by March next year.

As a result, Chancellor Philip Hammond confirmed that the scheme will close to new mortgages on 31st December 2016.

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First time buyers continue to flood the property market

The country’s lack of housing supply is coming under increasing pressure as more first time buyers enter the market, writes property developer Richard Carr.

Growth

Richard Carr First Time Buyers Keys

Is there enough supply to cope with the demand?

Data from the Halifax shows that the number of first time buyers in the UK increased by an estimated 10% in the first six months of 2016 compared to the same period 12 months ago.

This year there was just under an extra 15,000 first time buyers entering the market, taking the overall figure to 154,200. That’s more than double the market low which was recorded during the first half of 2009.

Since the same period in 2012, the numbers entering the market has always exceeded 100,000, however the market is yet to better its peak of 2006 when over 190,000 first time buyers were stepping on the ladder.

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Help to Buy savings account proving a big hit

Property specialist Richard Carr has previously hailed the government’s initiatives to assist first time buyers and is pleased to see people taking advantage of the government’s Help to Buy deposit saving financial product.

250,000 sign ups

Richard Carr First Time Buyers

First time buyers are benefitting from the Help to Buy ISA

The initiative, launched in December 2015, has seen over a quarter of million people open up one of the financial products. Encouragingly, more than half of those signups were made my people aged 30 and under.

The scheme allows savers to be given a maximum of £3,000 by the government to help them purchase their first home. Savers can put away £200 a month into the dedicated ISA with the government topping it up by 25%; the first bonus was paid to savers this week who opened up an account in December.

For couples aiming to save for their first home, individual accounts can be opened which amounts to a potential boost of £6,000.

Other Help to Buy schemes such as the mortgage guarantee and equity loan have also proven popular with over 100,000 home buyers involved.

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Housing supply has halved in the last ten years

Housing supply in Britain remains a huge problem – and the outlook only looks worse, writes property developer Richard Carr.

Falling numbers

First time buyers - Richard Carr

First time buyers are suffering

In December last year (2015) the average number of properties available per estate agent branch was just 37. This is considerable drop compared to the same month in 2005 when 72 houses were on the market. 45 homes were available this time last year.

The National Association of Estate Agents research shows that the supply of available housing to buy in the UK has almost halved in the last ten years, which is heavily contributing to the problems first time buyers are finding getting onto the property ladder.

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First time buyers finding their way onto the ladder

It has taken over six years, but finally the number of first time buyers getting onto the property ladder has hit a post-recession peak, writes Richard Carr.

Initiatives in the pipeline

Richard Carr First Time Buyers

Will supply meet the first time buyer demand?

Government incentives such as the Help to Buy scheme has seen more young people get on the property ladder and this is only likely to increase when the Help to Buy ISA comes into play, which will provide those saving for a mortgage with a cash bonus every month.

However, increased demand is only good if the supply of homes is at the same rate. According to recent figures, the output of new homes has increased over the last year, but there is still some way to go if the government is to meet its 2020 target of 275,000 homes per year.

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