Calls to scrap Help To Buy will be putting extra pressure on first time buyers saving for a deposit to get their first food on the property ladder. Although the scheme is guaranteed until 2021, critics say it does as much harm as good by pushing up the price of homes because it helps to increase demand with its lower deposit element
But the average deposit without Help To Buy now stands at £33,127 nationally – and £114,952 in London – according to this summer’s Halifax First-Time Buyer Review.
Properties aimed at first-time buyers have increased in price by an average 21 per cent over the past 10 years says the Halifax report, jumping from £172,659 in 2008 to £208,741.
In London there’s been a 48 per cent price hike over those 10 years, to £419,608.
There is plenty of advice on how to save for deposits, with site sales Property Group (site-sales.co.uk) director Craig Osborne suggesting setting savings targets each month.
“Creating spreadsheets or monitoring your spending with one of the arrays of saving apps can help you track your expenses and identify areas where you can make some efficient cost cuttings,” he says.
He also suggests using free online resources to obtain a copy of your credit score so you can monitor it, making sure all credit card repayments are made on time and all debts paid off at least six months before applying for a mortgage.
Looking out for mortgage deals and homes in up-and-coming areas are among his other tips but inevitably he stresses the importance of understanding government schemes and using them.
“Shared Ownership, Help To Buy and localised council versions of these schemes can make all the difference when it comes to taking that first step on the property ladder,” he says, suggesting looking at the government’s shared Ownership website helptobuy.gov.uk.
With Help To Buy, the Government lends buyers up to 20 per cent of the cost of their new home so first-time buyers and those moving up the property ladder can buy with just a five per cent cash deposit and mortgage on only 75 per cent of the property value.
Teacher Isabelle lilley-Moncrieff says she has this to thank for being able to move into her first home at the age of 27.
“I did have a Help to Buy Isa set up so I have some savings and some help from my parents. But while I feel extremely lucky to have had some help, if it was not for the Help To Buy scheme there’s no way I would have been able to buy a property.”
Her two-bedroom at at De Montfort Place, in the heart of Bedford, cost £249,000 and is part of a development of houses and apartments close to the county town’s railway station.
A second phase is now for sale from £192,500 for a one-bedroom at (01582 742165; storey-homes.co.uk).