Following the government’s Help to Buy statistical release, Quilter has applauded the scheme for helping first-time buyers (FTBs), but said it highlights the stamp duty holiday’s failure to do the same.
Karen Noye, mortgage expert at Quilter, said: “The Help to Buy Equity Loan scheme statistics…show that the scheme has supported 328,506 property completions since its 2013 inception, of which 82% were first-time buyers.
“Most buyers using the Help to Buy ISA scheme are aged between 18 and 34, suggesting that the schemes are helping younger generations purchase their first home as they set out to.
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“However, while the schemes are well meaning, the figures only further highlight how little the stamp duty holiday supported first time buyers.
“The average Help to Buy purchase price since 2015 is £175,010. This figure has only risen very slightly on the previous quarter, suggesting homes using the Help to Buy scheme have not been impacted as severely by house price inflation.
“However, it justifies the frustrations of first-time buyers towards the stamp duty holiday as the purchase price is far from the stamp duty threshold, meaning they could never have benefited.
“In March 2021, figures for the number of bonuses and property completions using the Help to Buy ISA scheme reached the highest they have ever been since the scheme’s inception.
“This could be attributed to the rush to buy that occurred in the housing market but may also be a result of ‘accidental’ lockdown savings being used towards a deposit.”
Noye adds that high house price levels are unlikely to soften any time soon, in part due to continued government stimulation ostensibly aimed at helping FTBs.
She explained: “With the introduction of the government backed 95% mortgage guarantee scheme, while it may mean more first-time buyers will have a fighting chance of saving for a deposit, it is also likely to do little to help the surge in house prices.
“Once again, first-time buyers will be left battling those with far more equity to play with.”
Noye goes on to say that none of the government schemes address the underlying issue of supply versus demand.
She said: “The Help to Buy ISA was closed to new accounts in November 2019.
“Whilst this is no longer available to join, other government backed schemes are available, such as the Lifetime ISA which has a more generous government bonus available as a first-time buyer can receive a maximum of £1,000 each year from the government if they contribute the full £4,000.
“While all these government schemes are well meaning, none of them tackle the problem like simply building more housing stock.
“The government must make this a priority going forward if they want to give the younger generation a chance to get on the housing ladder.”