Average deposits for homes bought under the Help to Buy mortgage guarantee scheme, known as Help to Buy 2 (HTB2), fell to their lowest level of 2014 in November, according to analysis from Mortgage Advice Bureau (MAB).

Help to Buy 2 is the second phase of the government’s scheme which allows first-time buyers to purchase a property with just a 75% mortgage.
Data from MAB’s National Mortgage Index shows that the average deposit paid by a HTB2 applicant was just £7,856 in November: a record low for 2014 and 7% less than the previous low of £8,441 in October.
Compared to the typical deposit in the wider purchase market (£68,828), HTB2 applicants in November needed 89% less finance for their deposit.
With an average loan to value (LTV) of 94%, buyers using HTB2 used an average deposit of just 6% to make their purchase, compared with 30% across the whole of the market.
The drop in the average HTB2 deposits has occurred because applicants are increasingly targeting more affordable properties, the MAB says.
The average purchase price for a HTB2 property was £136,652 in November, well below the market average of £ £283,000 (Office for National Statistics).
HTB2 applicants were five years younger than the market average during November, aged 31 compared with 36 across all homebuyers.
Brian Murphy, head of lending at Mortgage Advice Bureau, commented: “The Help to Buy mortgage guarantee scheme has consistently reached its target audience in 2014, attracting buyers with lower salaries who are looking to buy more affordable properties without putting down a hefty deposit.”
“The fact that the average HTB2 deposit has now fallen to less than £8,000 will be welcome news for first-time buyers, who are facing property prices that are 12%* higher year-on-year despite the recent slowdown in house price growth.”
“With both parts of Help to Buy continuing into this year alongside the recently announced Starter Home scheme, the government has proven its dedication to providing first-time buyers with affordable routes onto the property ladder,” he added.
If you are looking to buy a property in Rugby, Coventry or Warwickshire and want some free advice on mortgages, Help to Buy, deposits or any other aspect of property finance then call Cadman Homes, a local family owned estate agents in Rugby, or pop into their Castle Street office in Rugby Town Centre, or 3 The Quadrant, Warwick Road, Coventry. They have a number of independnat mortgage and financial advisors that can help you get the best deal.

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