More than 2,000 people have put in offers on homes under the Help to Buy scheme, totalling £365 million of new mortgage lending.
The department of Communities and Local Government (CLG) said the applications are backed by a decision in principle by RBS and Lloyds, the first two participating banks, for 95% mortgages. Ten of the 2,384 applications have already completed.
The CLG said the figures demonstrate that the Government-backed Help to Buy scheme is supporting responsible lending. On average households have asked to borrow around £155,000 for houses worth about £163,000, which is below the UK average price of £247,000.
More than three-quarters of the applicants are first-time buyers and many in their early thirties. The Government says this demonstrates that Help to Buy is helping hardworking people realise their home-owning aspirations.
The Prime Minister David Cameron said: “Four weeks in and it’s clear that Help to Buy is already delivering. In just one month, over 2,000 people have been accepted for a Help to Buy mortgage. Or put another way, 75 families every single day have been put on the path to owning their dream home.
“But the best thing about Help to Buy isn’t the statistics – it’s who is really benefiting. Most Help to Buy applicants are first-time buyers, young and have a roughly average household income. This is all about helping hardworking people get on the first rung of the property ladder – and helping them get on in life.
“Owning a home is about more than four walls to sleep at night. It’s about independence, self-reliance, moving on and moving up. Above all, it’s about aspiration. Help to Buy is helping people realise the dream of home ownership – and it’s a key part of my plan for Britain.”
Applicants will face average monthly repayments of around £900 and have an annual household income of around £45,000. This means a Help to Buy mortgage represents 24% of borrowers’ gross income, which compares to the historical Council of Mortgage Lenders’ average figure of 24% across the UK.
A two-year fixed rate 95% mortgage for the average house under Help to Buy is also £2,557 cheaper per year, compared to the equivalent mortgage from 2007.
Almost 65% of the UK mortgage market has now signed up to Help to Buy and more mortgage products from HSBC, Barclays, Santander, Virgin Money and Aldermore will be released in the coming months.