Help to Buy’s second stage has been more popular than the first.
The mortgage guarantee part of the housing scheme, introduced three months early in October 2013, was an immediate success according to CityWire Money. After three months, the numbers stood at 6,000 applications.
However, the equity loan part of the policy – launched in April 2013 – had just 5,375 borrowers signed up within the first six months. Nonetheless, numbers surged in the final quarter of the year, with 7,500 applying.
This slower start for the equity loan stage could be because it only applies to new-builds, whereas the mortgage guarantee allows aspirant first-time buyers to purchase any property.
Ray Boulger, from independent mortgage broker John Charcol, said buyers are now warming up to the first part of the policy, ignoring the new-build restriction and realising that the equity loan works out as a better deal financially than the mortgage guarantee.
He added that, even when the five-year interest-free period for the equity loan had finished, the interest was “still not going to cost you much”.