New Help to Buy mortgage guarantee figures look to refute accusations that the scheme is pushing up London house prices.
Government figures show that of the 7,313 mortgages completed under Help To Buy 2 since its launch in October 2013, just 5 per cent were in the capital.
The mortgage guarantee scheme is the second phase of Help To Buy and helps borrowers buy a new build or existing home priced up to £600,000 with as little as a 5 per cent deposit. Under the scheme mortgage lenders are offered a taxpayer-backed guarantee on 95 per cent loan-to-value mortgages.
The aim of the scheme is to help people with low deposits buy their first home or move up the property ladder. Critics argued it would further inflate house prices in London and there have been calls for it to be scrapped.
However, the latest figures released by the Treasury show Help To Buy has had little impact on London and has led to a housing market recovery in the regions.
Some 14 per cent of purchases under Help To Buy 2 were in the North-west, 14 per cent in the South-east and 9 per cent in the East Midlands, Yorkshire and Humberside and the East. Around 80 per cent of home loans completed under the scheme were to first-time buyers.
Brian Murphy, head of lending at the Mortgage Advice Bureau (MAB), said: "The Help to Buy mortgage guarantee scheme was designed to help first-time buyers with smaller deposits on to the property ladder, and the latest government statistics show the scheme is hitting its target audience on the head.
"Removing the mortgage guarantee in the hopes of driving down activity in the South would be both unnecessary and unsuccessful. Lending activity has generally slowed since 2013 and new mortgage rules putting strict affordability conditions into play will ensure sustainable growth. Those hoping to dampen activity in London would be better off targeting the external factors that have such a strong influence on the capital's housing market, such as the rise in cash buyers and the shortage of new homes."
Meanwhile new figures on the first part of Help to Buy – the equity loan scheme – show that 20,548 new homes have been sold through the scheme in England in the 13 months since it began.
In total, 27,861 homes have now been sold under the two parts of Help to Buy.Reuse content