Help to Buy is gathering momentum. This morning both RBS and Halifax reported strong uptake of its second phase, which was launched a month ago. 2,384 applications have been put in, totalling £365m of new mortgage lending.
On average, households have asked to borrow around £155,000 for houses worth about £163,000. The UK average house price is £247,000. More than three quarters of the applicants are first-time buyers, and many are in their earlier thirties. Prime minister David Cameron said that Help to Buy is "already delivering" - "put another way, 75 families every single day have been put on the path to owning their dream home."
Housebuilder Redrow reported a 52 per cent leap in private reservations over the first 19 weeks of the year, with Help to Buy reservations representing 35 per cent of the total. The average price of private reservations, said the group, is up 11 per cent from last year at £271,000.
Cameron continued: "Owning a home is about more than 4 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 monthly repayments of around £900, with annual household incomes of around £45,000. So a Help to Buy mortgage represents 24 per cent of borrowers' gross income. Compared to the equivalent mortgage from 2007, a two-year fixed rate 95 per cent mortgage for the average house under Help to Buy is £2,557 cheaper per year, said the government today.
Shopping centre developer Hammerson has also said today that total leases signed in the past quarter (July to November) are 82 per cent higher than last year. Chief executive David Atkins said the company is seeing "ongoing signs of recovery… particularly the UK, where improving retailer confidence is generating increased demand."