A recent investigation has found that the Help to Buy scheme is not in fact helping everyone, with many UK homes priced out of the scheme, particularly in London, according to BBC. The scheme was set up last year to help young people onto the property ladder, with the government saying that the cap ensures that the scheme is intended for first time buyers. It was introduced to allow first time buyers to put their deposit into a tax-free savings account and get a 25% bonus, up to a maximum of £3,000 when they buy their home. The price of a house under the scheme cannot exceed £450,000 in London, or £250,000 everywhere else in England. However, the Help to Buy ISA only gives savers a £3,000 bonus on their deposit if the price of the house is below the cap. In addition, starter homes exceed the price cap in many areas across England. Shelter, the housing charity, has been quoted as saying that it only helped a few and the government needs to focus on building more homes.
Average asking prices exceed the cap in 65% of the areas in London, 67% in the South East, 61% in the South and 53% in the East. In London, an average two bedroom flat exceeds the cap in two thirds of boroughs, while one bedroom flats exceed the cap in a third of boroughs. Only 10% of three bedroom homes in London fall below the cap. Outside of London, a two bedroom starter home exceeded the cap in 28% of the UK.
Therefore, in terms of monthly outgoings and despite the average Londoner outlaying nearly 30% of their monthly income on rent, renting is often still a less expensive option than the Help to Buy scheme. In London and the South East especially, where the property prices are highest, renting tends to be cheaper than the monthly mortgage payments.
If you are about to start searching for a home in London, please contact us on 020 7351 6100 and we would be delighted to show you any listings which may suit your requirements.