If you are covering the latest Help to Buy Equity Loan or 95% mortgage guarantee scheme statistics, please see the following comment from Karen Noye, mortgage expert at Quilter:
Help to buy completions dip 8% YoY
"New Help to Buy data out this morning show that the various regional price caps on the Help to Buy equity loan scheme continue to have a significant impact on completions as the scheme nears its end. Between October to December 2022, 8,227 properties were purchased with an equity loan, a drop of 8% compared to the same period a year prior. The scheme has been closed to new applications since October 2022, and the deadline for completions is 31 May, so we can expect to see a further tail off of completions in the next dataset.
"Since the introduction of the current Help to Buy scheme in April 2021, there has been a significant reduction in completions, with a fall seen in all areas in 2022 Q4 except in London – which has not been subject to a change in price cap - and the East of England.
"The West Midlands has suffered the greatest drop in completions, reducing by 42% in 2022 Q4 compared to the same period a year earlier, while the decrease in the South West and South East was comparably the least, though completions still fell by 12%.
"Given the huge increase in house prices over the last few years, coupled with the fact they have not yet fallen in the way many had expected, this dip in completions as the scheme nears its end is not surprising. The current cost-of-living pressures are having a real impact on the property market and high house prices mean taking a first step onto the property ladder has been pushed out of reach for many, and this has naturally reduced the scheme’s completion rate.”
95% mortgage guarantee scheme still struggling to build momentum
"First-time buyers continue to face a whole host of issues, from house prices not falling in the way many had hoped, inflation eroding their deposits, and the ongoing cost-of-living pressures limiting their ability to save, all in conjunction with the Bank of England’s successive rate hikes.
"Despite this, the 95% mortgage guarantee scheme has been relatively unpopular from the start given the economic backdrop, and this morning’s figures show the scheme is still struggling to build momentum. Since its launch in April 2021 to December 2022, just 35,503 mortgages have been completed using the scheme.
"Some lenders have been reluctant to participate in the scheme which has led to limited options for potential borrowers. As such, borrowers may have opted for 95% deals outside of the scheme that might offer more competitive rates. 95% mortgages are known to be very expensive, so some people may also have opted to hold out until they can afford a slightly larger deposit to lower their mortgage costs.
"Given inflation is proving sticky and rising costs are placing real strain on people’s everyday finances, those desperate to get on the housing ladder may begin to make more use of this scheme in the coming months. The scheme has been extended until the end of the year, so there is still some time yet for it to have a more meaningful impact.”
