Newly released data has indicated that the Help to Buy 2 Mortgage Guarantee (HtB2) scheme is helping people with smaller deposits get onto the property ladder.
Figures for November have been released by the National Mortgage Index and show that the average deposit paid by buyers using the second Help to Buy scheme was just £7,856, a record low for 2014, dropping lower than the previous record low seen in October of £8,441.
This is a good sign as it indicates people are using the scheme to purchase smaller, cheaper properties, which is precisely what the scheme was introduced to try and achieve.
There has been much controversy about the scheme, which some claim has been abused by people who could potentially afford larger deposits, instead of being used by those who could only become first time buyers if they had access to a greatly reduced deposit.
The average deposit paid in conjunction with HtB2 is now just 6%, one per cent above the minimum the scheme allows. This contrasts to a 30% average the rest of the market is paying at the moment.
Paralleling the drop in average deposit rates, there was also a drop in total average property value purchased. A monthly fall of 2% saw November have an average property worth £136,652 purchased through the HtB2 scheme.
Brian Murphy, head of lending at the Mortgage Advice Bureau, commented, “The Help to Buy Mortgage Guarantee scheme has consistently reached its target audience in 2014, attracting buyers with lower salaries who are looking to buy more affordable properties without putting down a hefty deposit,” and the future looks bright “With both parts of Help to Buy continuing into 2015, alongside the recently announced Starter Home scheme.”