Help to Buy 2 off to a strong start
The Help to Buy mortgage guarantee scheme has got off to a strong start with more than 2,000 applications made during its first month.
Royal Bank of Scotland and Halifax - the first two banks to join the scheme - have received 2,384 applications for the scheme so far, which would account for £365 million in mortgage lending if all are approved.
RBS added that five customers across the RBS/NatWest group have already completed their purchase and are moving into their new home.
Households have asked to borrow around £155,000 for houses worth about £163,000, according to the Department for Communities and Local Government (CLG), which is below the UK average price of £247,000.
It added that a two-year fixed rate 95% LTV mortgage for the average house under Help to Buy is £2,557 cheaper a year, compared to the equivalent mortgage from 2007.
Average monthly repayments are around £900 and applicants have a household income of around £45,000, meaning a Help to Buy mortgage represents 24% of a borrower's gross income.
CLG also said the majority of applicants are first-time buyers and many are in their early thirties.
RBS added that it has received "a high number" of applications from teachers and engineers.
CLG said more than three quarters of applications came from outside London and the South East, with RBS stating most customers wanting to take advantage of the scheme live in the North West, South East and Scotland.
Prime Minister David Cameron said: "Four weeks in and it's clear that Help to Buy is already delivering… But the best thing about Help to Buy isn't the statistics – it's who is really benefiting. Most Help to Buy applicants are first-time buyers, young and have a roughly average household income. This is all about helping hardworking people get on the first rung of the property ladder – and helping them get on in life."