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| Version 1 | Version 2 |
|---|---|
| Help to Buy: More than 7,000 homes sold under guarantee scheme | Help to Buy: More than 7,000 homes sold under guarantee scheme |
| (35 minutes later) | |
| Some 7,313 homes have been sold so far under the Help to Buy mortgage guarantee scheme, the Treasury says. | Some 7,313 homes have been sold so far under the Help to Buy mortgage guarantee scheme, the Treasury says. |
| The figures are the first comprehensive measure of the scheme since it was launched late last year. | The figures are the first comprehensive measure of the scheme since it was launched late last year. |
| The numbers from the Treasury also show that 80% of the properties sold went to first-time buyers. | The numbers from the Treasury also show that 80% of the properties sold went to first-time buyers. |
| The majority of sales were outside London, which will help the government to argue that Help to Buy has not had a major effect on house prices. | The majority of sales were outside London, which will help the government to argue that Help to Buy has not had a major effect on house prices. |
| Just 5% of sales under the mortgage guarantee scheme were in the capital, where prices have soared, and 14% in the South East. | Just 5% of sales under the mortgage guarantee scheme were in the capital, where prices have soared, and 14% in the South East. |
| The mortgage guarantee scheme is separate from the equity loan part of Help to Buy, which began in England 13 months ago. Scotland and Wales have separate equity loan schemes. | |
| Liberal Democrat Business Secretary Vince Cable is among those who have argued that Help to Buy may be stoking house price inflation. | Liberal Democrat Business Secretary Vince Cable is among those who have argued that Help to Buy may be stoking house price inflation. |
| Prices across the UK are rising by 8% a year, according to the Office for National Statistics, and by 17% a year in London. | Prices across the UK are rising by 8% a year, according to the Office for National Statistics, and by 17% a year in London. |
| The mortgage guarantee figures officially cover the first three months of 2014, but include all applications since October 2013, when homebuyers were first able to register for the scheme. | |
| Guarantees | Guarantees |
| At the same time, 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. | In total, 27,861 homes have now been sold under the two parts of Help to Buy. |
| That is a small proportion of the total number of homes sold over the same period. | That is a small proportion of the total number of homes sold over the same period. |
| Between October 2013 and the end of March 2014, roughly 500,000 homes were sold in the UK. | |
| But only 7,313 homes were sold under the mortgage guarantee scheme during that time, about 1.5% of the total. | |
| Under the equity loan scheme, buyers are able to buy a new-build home with a deposit of just 5%, and can borrow up to 15% of the property's value from the government. The government then owns a stake in the property. | |
| Under the mortgage guarantee scheme, buyers can purchase any home up to the value of £600,000, and up to 15% of their loan is underwritten by the Treasury. | |
| As with the equity loan scheme, buyers need to put down a deposit of at least 5%. The English scheme began in April 2013, but the Scottish and Welsh schemes started later. | |
| Options | |
| Fears that the Help to Buy scheme has driven a surge in house prices has led to speculation that the Bank of England could seek to modify the scheme. | |
| One option for the Bank's Financial Policy Committee (FPC) is to recommend a change in the rules, so that only properties under the value of £300,000, for example, would qualify for the scheme. | |
| At the moment any property worth less than £600,000 is eligible. | |
| However, it is thought more likely that the FPC will recommend other measures to control the housing market - such as requiring lenders to hold more capital to protect themselves against risky loans - or limiting the amount they can lend in relation to a borrower's salary. | |
| Lloyds has already announced that it will lend no more than four-times salary on mortgages above £500,000. |