The Help to Buy scheme was introduced by the government with the aim of helping first-time buyers get onto the property ladder; designed mainly to overcome the barrier of people not being able to save a large enough deposit to qualify them for a mortgage loan.
Help to Buy allows buyers to purchase a new build home with just a 5% deposit, it is then topped up by the government with a 20% equity loan that is interest-free for five years.
The number of homes bought using the scheme has increased year-on-year, with over 290,000 buyers having benefitted since it first launched.
Who has benefited from Help to Buy?
First-time buyers
Benefiting the most from the government's scheme has been first-time buyers, accounting for 82% of all purchases.
The average price of a property bought using the scheme is £279,995, with a typical household income of £53,218.
From April 1st, a new scheme has been launched that is only available exclusively to first-time buyers. As a result, regional price caps will be introduced on the value of properties that are purchased using the scheme.
These caps range from £186,100 in the North East to £437,600 in the South East and £600,000 in London. Below is a full list of the regional price caps for Help to Buy.
| Region |
Help to Buy price cap |
| North East |
£186,100 |
| North West |
£224,400 |
| Yorkshire and the Humber |
£228,100 |
| East Midlands |
£261,900 |
| West Midlands |
£255,600 |
| East of England |
£407,400 |
| London |
£600,000 |
| South East |
£437,600 |
| South West |
£349,000 |
Buyers in London
For most of the country, the equity loan is capped at 20% of the property’s value.
However, in London, buyers can apply for an equity loan worth up to 40% of their property’s value.
Homeowners
Whilst those who already own a home or have previously done so have also benefited from Help to Buy, these have only accounted for around 18% of all purchases made using the scheme, with the typical home they bought much more expensive compared to first-time buyers.
It is important to remember that the Help to Buy scheme must only be used on your main residence and cannot be used to buy a second home or a buy-to-let property.
To start your property journey with us, please contact our team today.
