Who is Help to Buy really helping?

The number of properties purchased using the government’s flagship Help to Buy equity loan scheme reached a record high in 2018, but is it the best way to get on the property ladder?

Launched in April 2013, the initiative was set up to help buyers purchase a new-build with just a 5% deposit, backed by a government equity loan worth up to 20% and interest-free for the first five years.

The latest figures show 210,964 properties have been purchased under the government scheme in total, with 42,748 completed last year – the highest amount for any 12 month period.

The majority of Help to Buy Equity Loan purchases, 81% or 171,053, have been by first-time buyers, the government says.

The average purchase price of a property bought under the scheme was £258,223 in 2018, with buyers using a mean equity loan of £55,498.

In London, the maximum equity loan was increased from 20% to 40% from February 2016, and since then to 31 December 2018, there were 12,511 completions in London, government data shows.

Any support to get on the property ladder is also always handy, but this isn’t the only way.

The Help to Buy scheme restricts you to new builds, which are often more expensive than other properties, and there may be other products on the wider market that you could be interested in.

Additionally, many mortgage lenders will also offer home loans that require just a 5% deposit.

Help to Buy also isn’t the only government incentive to get on the property ladder.

First-time buyers benefit from Stamp Duty relief up to £300,000.

HMRC data showed that 46,800 transactions claimed first-time buyers’ relief in the first quarter of this year, making a total of 288,300 claims since the relief’s introduction in November 2017.

Speak to your mortgage adviser about the best ways to get on the property ladder.