Mortgage blog: More than 2,000 borrowers take up Help to Buy 2 in the first month
Posted 21 November 2013 by Keith Osborne
According to the Prime Minister, over 2,000 homebuyers have accessed the government's flagship ‘Help to Buy 2' mortgage scheme in the first month. With the scheme coming into operation three months early, David Cameron has reported that there has been a strong take-up for the scheme and its first-time buyers that are the main beneficiaries.
With many lenders still not signed up to the scheme the government hopes that the initiative will help many thousands of homebuyers in 2014.
The government rolled out the second stage of its Help to Buy initiative three months ahead of schedule in an attempt to help borrowers with a small deposit gain access to high loan-to-value mortgages. According to the Prime Minister, over 2,000 buyers used the scheme in October. In a statement, David Cameron said that most of the applicants for the government scheme were young, had a roughly average household income and were buying their first home.
"Owning a home is about more than four walls to sleep at night. It's about independence, self-reliance, moving on and moving up," Cameron said. "Above all, it's about aspiration. Help to Buy is helping people realise the dream of homeownership - and it's a key part of my plan for Britain."
A total of 2,384 applications had been received from the two participating banks, the government backed RBS and HBOS. RBS, which owns NatWest, said 73% of its 1,080 mortgages through the scheme were for first-time buyers. It reported that the average amount its customers wanted to borrow was £159,000 and the average price of the home they wanted to buy was £167,565.
Reuters reports that if all of the applications are finally approved, the bank will be lending £171.6m under the programme.
Halifax, owned by Lloyds Banking Group, said it had received 1,309 mortgage applications from homebuyers across the UK who have found a property to purchase. The bank reported that the applications were for mortgages worth a total of £194m.
"These are majority young first-time buyers who, without Help to Buy, wouldn't have been able to consider a mortgage or buy a home," said Lloyd Cochrane, head of mortgages at NatWest and RBS.
Keith Osborne, editor of Whathouse.co.uk said: "The government will be pleased by the take up of the scheme with over 2,000 applications in the first month alone. When more and more lenders sign up to Help to Buy and the choice of mortgage options increases I expect a substantial rise in demand for these products."
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