Are first-time buyers benefiting from £10bn Help-to-Buy scheme?

House keysLast year, the government pledged to invest a further £10bn into its popular Help-to-Buy scheme by 2021, but just how much is the scheme helping first-time buyers?

The Help-to-Buy scheme had already aided well over 130,000 home purchases by the end of 2017, and the extra funding from the government aims to more than double that number within the next four years. This sounds promising, but with rising house prices, is it time to ask if Help-to-Buy really is an affordable way for first-time buyers to take their first step onto the property ladder?

Help-to-Buy equity loan

The Help-to-Buy equity loan scheme was created to allow first-time buyers and those moving home the opportunity to purchase a new-build home with a 5% deposit, provided the property costs less than £600,000.

The scheme was first launched in April 2013, and by the end of June 2017 over 134,000 properties had been purchased with the aid of an equity loan. Of these, 81% were registered as being purchased by first-time buyers.

Steady increase in house prices

While there is no question that the scheme has helped many people purchase their first home, other questions remain about whether the scheme is making housing more affordable.

By the end of June 2017, the average price of a property bought using the Help to Buy scheme was £216,995, or £204,950 for homes bought by first-time buyers. Just like the wider property market, the prices of new-build homes purchased with Help-to-Buy have steadily increased over time.

The average purchase price using the scheme makes it seem like many first-time buyers are buying property under the overall UK average of £223,800, but the figure of £204,950 includes all properties purchased since the scheme first began in 2013. A closer look at recent figures reveals that in the second quarter of 2017 the average purchase price was £245,000, which is considerably higher than the UK average property price.

While it’s obvious that Help-to-Buy is achieving its aim of increasing the number of first-time buyers making their way onto the property ladder, it seems buyers may be spending at a premium while using the scheme - a premium that has been steadily increasing over the years and seems to be showing no signs of slowing down.

If you’re a first-time buyer looking for your dream home, why not contact our friendly team today for advice? Here at CPS Homes estate agents, we’re experts at helping people both buy and sell property, so you’re sure to be in the best hands possible. Call us today on 02920 668585, e-mail: or pop into one of our three Cardiff based branches in Cathays, Cardiff Bay or Roath.

11 April 2018


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