The best locations in England to purchase a first home using the Help to Buy Equity Loan scheme have been revealed, with Southern counties topping the charts for property choice.
MoveStreets, a property portal aimed at younger buyers which describes itself as the ‘Tinder for property’, analysed estate agents’ listings across the country to work out which locations had the most homes available with Help to Buy.
It came after communities secretary Michael Gove accused banks of being too ‘over-cautious’ when lending to first-time buyers, suggesting that they offered higher-risk mortgages to help more people on to the property ladder.
Location, location, location: Many first-time buyers choose to use the Government’s Help to Buy scheme to get on the ladder – but it may be easier in some places than others
He was speaking to MPs on the housing, communities and local government committee.
First-time buyers have the best chance of snagging a Help to Buy home in Suffolk, according to the research. There, 3.6 per cent of all properties on the market are eligible for the scheme.
Buyers in the South and East of England will have a bigger pool of homes to choose from than their Northern neighbours.
Buckinghamshire had the second-highest level of Help to Buy homes, accounting for 3.4 per cent of the market, followed by Cambridgeshire (3.3 per cent), Norfolk (3.3 per cent) and Bedfordshire (3.1 per cent).
Help to Buy is a Government scheme under which first-time buyers can borrow 20 per cent of the value of an eligible new-build home, interest-free for the first five years.
| County of England | Demand – HTB homes under offer or sold subject to contract |
% Homes eligible for Help to Buy |
|---|---|---|
| City of London | – | 0.0% |
| Isle of Wight | 66.7% | 0.5% |
| Norfolk | 61.2% | 3.3% |
| Wiltshire | 60.0% | 2.3% |
| Cheshire | 59.1% | 0.7% |
| Dorset | 58.3% | 1.9% |
| West Sussex | 56.0% | 2.7% |
| Bath and North East Somerset | 54.5% | 0.9% |
| City of Bristol | 51.9% | 3.0% |
| Rutland | 50.0% | 1.9% |
| Lincolnshire | 49.7% | 1.8% |
| Bedfordshire | 48.1% | 3.1% |
| Merseyside | 47.4% | 0.2% |
| Somerset | 42.2% | 2.8% |
| Hampshire | 42.1% | 1.4% |
| Devon | 42.1% | 1.2% |
| Kent | 40.4% | 1.5% |
| Cambridgeshire | 40.4% | 3.3% |
| East Sussex | 39.8% | 1.5% |
| Cornwall | 39.5% | 0.8% |
| Essex | 36.0% | 0.9% |
| Greater Manchester | 35.5% | 1.6% |
| Suffolk | 35.0% | 3.6% |
| Surrey | 32.7% | 3.0% |
| Shropshire | 32.2% | 2.3% |
| South Yorkshire | 28.7% | 1.6% |
| Buckinghamshire | 27.9% | 3.4% |
| Hertfordshire | 27.8% | 2.2% |
| Berkshire | 25.4% | 3.0% |
| Nottinghamshire | 24.5% | 1.7% |
| East Riding of Yorkshire | 23.9% | 2.5% |
| Derbyshire | 23.9% | 1.5% |
| Oxfordshire | 23.8% | 2.8% |
| Northamptonshire | 23.4% | 2.5% |
| Greater London | 22.8% | 2.4% |
| Gloucestershire | 21.3% | 1.7% |
| West Yorkshire | 21.1% | 0.4% |
| Staffordshire | 20.0% | 2.7% |
| Durham | 20.0% | 1.7% |
| Herefordshire | 20.0% | 0.8% |
| West Midlands (county) | 19.7% | 0.9% |
| Lancashire | 17.5% | 0.7% |
| Cumbria | 16.7% | 2.3% |
| Worcestershire | 14.3% | 0.4% |
| North Yorkshire | 13.1% | 1.4% |
| Tyne and Wear | 8.5% | 1.1% |
| Leicestershire | 8.3% | 0.6% |
| Warwickshire | 5.8% | 1.4% |
| Northumberland | 5.3% | 2.9% |
| England | 31.8% | 1.8% |
| Source: MoveStreets, Rightmove, Zoopla | ||
This helps them to pass the affordability checks that mortgage lenders carry out on buyers, as well as giving them access to cheaper mortgage rates.
Merseyside had the lowest proportion of properties under the scheme at just 0.2 per cent, according to MoveStreets.
This was followed by West Yorkshire and Worcestershire, which both had 0.4 per cent.
The Isle of Wight also scored low at 0.5 per cent, despite having the highest demand for Help to Buy Homes of any county.
MoveStreets calculated Help to Buy demand by looking at the proportion of Help to Buy homes on the market in that county that had already been sold subject to contract or placed under offer.
In the Isle of Wight, that applied to just over two thirds (66.7 per cent) of Help to Buy homes.
Buyers in Norfolk and Wiltshire were also snapping up Help to Buy homes at a rate of knots. In those counties, 61.2 per cent and 60 per cent of properties respectively had already been taken.
However, those seeking to buy in Northumberland and Warwickshire should have their pick of Help to Buy homes, as only 5.3 per cent and 5.8 per cent had already been reserved.
Overall, the average proportion of properties for sale with Help to Buy in any given area was 1.8 per cent.
This means that, of the half a million homes currently for sale across the nation, there are almost 10,000 offering the additional help of the Help to Buy equity loan scheme.
The data looked at properties listed on MoveStreets, as well as Rightmove and Zoopla.
Time running out for Help to Buy
First launched in 2013, Help to Buy continues to be very popular for those seeking their first step on the the housing ladder.
Recent Government figures show that 21,000 homes were bought with one of the Government-backed loans between October and December 2020, a rise of 40 per cent compared to the same period in 2019.
However, those seeking to buy a home using Help to Buy now only have a limited time to do so, as the scheme ends for good on 31 March 2023.
Buyers will need to have completed on their purchases by that date.
Nonetheless, there are alternatives that first-time buyers to consider.
A new initiative called Deposit Unlock is in the process of launching, backed by the Home Builders Federation, with the aim of helping buyers who struggle to get big mortgages on new-builds.
This sees housebuilders provide a financial safety net to encourage lenders to offer 5 per cent mortgages, and it is currently being offered by Nationwide and Newcastle Building Society.
When the scheme was conceived, few lenders were offering mortgages with 5 per cent deposits – but plenty have since launched their own products independently of the scheme.
In April, the Government launched a Mortgage Guarantee Scheme which works in a similar way – but with the Government insuring the mortgages instead of housebuilders. However, it is only applicable to pre-owned homes rather than new-builds.
There is also the Government’s First Homes scheme, which allows first-time buyers with incomes of £80,000 or less (£90,000 in London) to purchase properties at a discount of a third, and doesn’t involve any extra borrowing on top of their mortgage.
However, the criteria are strict. The maximum amount First Homes can be sold for is £250,000, or £420,000 in London.
Applicants will usually need to live, work or have another connection, such as family members, in the area where they want to buy their home.
There might also be extra rules depending on where they live, because local councils are allowed to apply additional rules. For example, they might lower the maximum household income, or give priority to key workers.
It might also be difficult to sell the property, as it must be sold to another eligible First Homes buyer.
