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Regular articles on industry changes by our team.

Help to Buy Scheme Deposits Fall

Friday, January 02, 2015

Average Help to Buy deposits fell to just £7,856 in November, a record low for 2014 and 7% less than the previous low of £8,441 in October.

As a result, the average HTB2 loan also reached its lowest point of the year: £128,796 compared to £131,706 in October (a 2% fall).

Mortgage Advice Bureau's National Mortgage Index found that HTB2 applicants in November needed 89% less finance for their deposit, compared to a typical deposit in the wider purchase market of £68,828.

With an average loan to value of 94%, buyers using HTB2 used an average deposit of just 6% to make their purchase, compared with 30% across the whole of the market.

Applicants are increasingly targeting more affordable properties, with the average purchase price for a HTB2 property standing at £136,652 in November, a monthly fall of 2% (down from £140,147) and 40% below the market average of £227,619.

The average salary for HTB2 applicants in November was £27,807, down 5% since October (£29,363). This was again the lowest seen in 2014 as less affluent buyers were attracted by the scheme’s low deposit requirements.

HTB2 applicants were also five years younger than the market average during November, aged 31 compared with 36 across all homebuyers.

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