Help to Buy is 'not pushing up London prices'

Figures show that just 5 per cent of mortgages agreed under the scheme were in the capital

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.

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Mortgage Advisor - OTE £95,000

    £40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...

    SThree: Trainee Recruitment Consultant

    competitive: SThree: Are you passionate about sales?Do you have a keen interes...

    Recruitment Genius: Loan Adviser - OTE £30,000

    £17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...

    Recruitment Genius: Sales Assistant / Buyer

    £15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

    Day In a Page

    Isis in Syria: Influential tribal leaders hold secret talks with Western powers and Gulf states over possibility of mobilising against militants

    Tribal gathering

    Influential clans in Syria have held secret talks with Western powers and Gulf states over the possibility of mobilising against Isis. But they are determined not to be pitted against each other
    Gaza, a year on from Operation Protective Edge: A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians

    Gaza, a year on from Operation Protective Edge

    A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians
    10 best trays

    Get carried away with 10 best trays

    Serve with ceremony on a tray chic carrier
    Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

    EU 'family' needs to forgive rather than punish an impoverished state

    An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
    Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

    Gaza, a year on from Operation Protective Edge

    The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
    How to survive electrical storms: What are the chances of being hit by lightning?

    Heavy weather

    What are the chances of being hit by lightning?
    World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

    World Bodypainting Festival 2015

    Bizarre and brilliant photos celebrate 'the body as art'
    alt-j: A private jet, a Mercury Prize and Latitude headliners

    Don't call us nerds

    Craig Mclean meets alt-j - the math-folk act who are flying high
    How to find gold: The Californian badlands, digging out crevasses and sifting sludge

    How to find gold

    Steve Boggan finds himself in the Californian badlands, digging out crevasses and sifting sludge
    Singing accents: From Herman's Hermits and David Bowie to Alesha Dixon

    Not born in the USA

    Lay off Alesha Dixon: songs sound better in US accents, even our national anthem
    10 best balsamic vinegars

    10 best balsamic vinegars

    Drizzle it over salad, enjoy it with ciabatta, marinate vegetables, or use it to add depth to a sauce - this versatile staple is a cook's best friend
    Wimbledon 2015: Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

    Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

    Serena dispatched her elder sister 6-4, 6-3 in eight minutes more than an hour
    Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

    Greece referendum

    Greeks say 'No' to austerity and plunge Europe into crisis
    Ten years after the 7/7 terror attacks, is Britain an altered state?

    7/7 bombings anniversary

    Ten years after the terror attacks, is Britain an altered state?
    Beautiful evening dresses are some of the loveliest Donatella has created

    Versace haute couture review

    Beautiful evening dresses are some of the loveliest Donatella has ever created