Help to Buy loans break the £3bn-a-year barrier

The annual value of Help to Buy loans broke through the £3bn barrier for the first time last year, according to new figures from the government.

In 2018 loans totalling £3.44bn were approved, up 18% on 2017.

The MHCLG said most of the home purchases in the Help to Buy equity loan scheme were made by first time buyers, accounting for 81% of total purchases.

Since the scheme began in 2013 Help to Buy loans worth £11.7bn have funded nearly 211,000 completions with a total market value of £54.5bn.

Concerns about the future of the scheme were allayed last October when in his autumn statement the chancellor Philip Hammond announced an extension until March 2023.

However he added the stipulation that from April 2021 it will only offer equity loans to first-time buyers and for houses with a market value up to new regional property price caps.

These caps represent 1.5 times the average first-time buyer prices forecast in different regions, with loans set to be offered for houses worth up to £600,000 in London.

The Treasury pledged £4.1bn for the scheme in 2022 and £4.6bn in 2023 and said it will not introduce a further Help to Buy scheme after March 2023.

The mean purchase price of a property bought under the scheme last year was £258,223, with buyers using a mean equity loan of £55,498.

London proved to be fertile ground for for Help to Buy loans, helping to fund 5,643 purchases in 2018, up by 26% year-on-year, while 5,362 homes were bought by first time buyers last year in the capital, up 27% compared with 2017.

Across England home purchases completed under Help to Buy rose 12% to 52,057 last year, while first time buyers used the loan scheme to buy 42,748 properties, up by 14% compared with 2017.