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Data compares first-time buyers and Help to Buy borrowers


Published: 7 May 2014 | Author: Bernard Clarke

Following publication of figures from the Department of Communities and Local Government (DCLG) on take-up of the Help to Buy equity loan scheme in its first full year, we have drawn together data comparing these purchases with those made by first-time buyers more generally.

The DCLG data show that up to the end of March almost 19,400 properties were bought with a Help to Buy equity loan, the equivalent of around 7% of first-time buyer purchases over the same period. The total value of equity loans amounted to £791 million, and they were used to buy properties with a total value of £3.97 billion.

Figures from the DCLG showed that the median price of a property bought with a Help to Buy equity loan was £184,995, supported by a median equity loan of £36,999. First-time buyers accounted for 16,964 purchases under the scheme, or 87.5% of the total. Our data for all first-time buyers shows that the median value of the properties they bought was a little lower, at £165,000.

Chart One: Distribution of purchase price for Help to Buy equity loan borrowers and first-time buyers

06.05.2014 - chart1-HTB price

Source: DCLG and CML

Chart Two: Income distribution, Help to Buy equity loan borrowers and first-time buyers

06.05.2014 - chart2-HTB income

Source: DCLG and CML

A comparison of the DCLG figures with our data on first-time buyers shows that almost 30% of all first-time buyers purchased a home for less than £125,000, but fewer than 15% of those with an equity loan bought properties priced in this range. The data show that the equity loan scheme was most likely to be used by those buying homes priced at between £150,000 and £250,000.

Chart Two shows that both first-time buyers and those taking out a Help to Buy equity loan were most likely to have a household income of between £20,000 and £50,000. Overall, however, those buying with an equity loan tended to have incomes that were a little higher than first-time buyers as a whole.