The Home Purchase Assistance Scheme (HTB) was used to finance 8,913 home purchases in the last quarter of 2021, according to government figures, a decline of 41% annually.
Overall, since April 2013, HTB has been used to close the sale of 355,634 homes, with the total value of loans made reaching £22bn, the figures add.
The government also released details of the HTB Individual Savings Account (Isa) today, 11 May. Statistics show that 480,494 properties have been purchased using this savings vehicle, with a total of £714million paid out via 630,264 bonuses.
The average bonus gained from such an Isa is £1,132, according to the data, and the average age of a first time buyer (FTB) using an HTB Isa is 28, compared to the national average age of first buyers of 30 years.
Karen Noye, Mortgage Expert at Quilter, says: “While the schemes are well-intentioned, the numbers show how few FTBs are actually supported by them. House prices have risen significantly over the past two years, but the average value of an HTB purchase price remains at just £175,849 compared to an average FTB house price of £228,627 and an average national price. homes from £274,712.
And Hargraves Lansdown senior personal finance analyst Sarah Coles comments: ‘Soaring house prices over the past two years have made a mockery of HTB Isa limits.
“You can’t buy an average property using n HTB Isa, and you can barely buy the average house for an FTB. House prices have risen by a third since the introduction of this type of Isa in December 2015, but the limits have not moved at all. This means that for anyone approaching the limits of dieting, the Lifetime Isa may be more enjoyable.
“In London the difference is particularly stark, as the average house costs £80,000 more than the scheme’s £45,000 limit, but even elsewhere in the UK the average property costs nearly 10% more than the scheme limit of £250,000. This means that those relying on the government top-up to afford a property might end up buying and find they’re going over the limit – so they can’t get the bonus after all.
The criticisms don’t stop there. Shaw Financial Services founder Lewis Shaw adds: “When those chickens come home to roost, the leveling department will be flattened. With rising rates, stagnating incomes and many HTB loans coming due this year, and for the next two years, many borrowers may find that they are unable to remortgage and repay the government loan. .
“That will mean one of two things: either sell and move somewhere else, or get stuck paying interest on the HTB element until they can repay that debt.”
Shaw continues, “So many people have been tricked into using HTB. It has been a giant scam from the start and has been directly involved in driving property prices higher and faster than they ever needed.
“The only people who have really benefited from this are the developers and their shareholders by paying windfall dividends and the government which has relied on the property price boom they themselves engineered. Or maybe that I’m just too cynical.