Some 17,996 Help to Buy property purchases were made between 19th April 2021 and 31st March 2022, according to the latest Government statistics on the scheme.
The total value of mortgages supported by the scheme stood at £3.2bn with 85% of purchases being made by first-time buyers.
The South East, the North West and Scotland saw the highest levels of usage while London, the North East, Northern Ireland and Wales saw the lowest.
The mean value of a property bought using the scheme was £190,166, almost £90,000 below the national average.
Rosie Hooper, chartered financial planner at Quilter, said: “First-time buyers are continuing to face a whole host of issues, from ever-increasing house prices, inflation rapidly eating away at their deposits, and the rising cost of living disrupting their ability to save, all in conjunction with successive interest rate hikes.
“It is therefore somewhat surprising to see that the number of mortgages completed with the help of the government’s mortgage guarantee scheme remains relatively low, with just 17,996 mortgages completed between April 2021 and March 2022.
“The scheme, which should be acting as a lifeline for those struggling to get on the housing ladder, saw an uptick in popularity in the second half of its first year with 11,461 deals being completed in the six months of October to March 2022 compared to just 6,535 in the six months of April to September 2021.
“However, while the take up has been modest at best, this is partly as a result of lenders identifying the gap in the market prior to the government’s implementation of the scheme and therefore offering their own 95% mortgage products.
“For example, Nationwide offers a helping hand product, which boosts the borrowing power of first-time buyers and other lenders have similar products aimed at helping those looking to secure a deal in the high loan to value area. Additionally, the low take up may be as a result of the ‘Bank of Mum and Dad’ stepping in to boost first-time buyer deposits to enable them to take out lower LTV deals.
“The latest data shows 15% of all mortgages completed using the government scheme were not first-time buyers, showing the scheme is proving relatively popular among other borrowers. This may illustrate that it is not just first-time buyers who are struggling with the current housing costs and other financial pressures.
“Interest rates have continued to increase, and as people’s finances begin to look less stable against the cost-of-living crisis backdrop, lenders may begin to take more advantage of the scheme which would compensate participating mortgage lenders for a portion of net losses suffered in the event of a repossession. The guarantee applies to 80% of the purchase value of the guaranteed property covering 95% of these net losses.”
