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First-time buyers monopolise Help to Buy 2

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First-time buyers have accounted for 86% of all Help to Buy 2 mortgage applications so far.

According to Connells Mortgage Services, the higher loan-to-value deals guaranteed under the government scheme have mainly attracted first-time buyer interest, despite the fact that Help to Buy 2 is also available to homemovers and, in theory at least, to remortgagors (although not all participating lenders are offering their deals to remortgagors yet).

Connells Mortgage Services has reported that its total mortgage applications from first-time buyers jumped 39% in November 2013 compared to the same time last year.

The average Help to Buy 2 purchaser was 31, and the typical loan size just over £145,000. However, despite earlier indications of a regional spread, 70% of applications seen by Connells have come from the southern and central regions of the UK.

Just 16% of applicants are looking to buy properties in the North and 8% in the Midlands.

Group mortgage services director Adrian Scott said the figures show Help to Buy 2 is assisting first-time buyers:

“Our estate agency business has seen a lot more activity from buyers, especially with news of rising house prices but we are also now seeing applicants who are using Help to Buy and getting genuine benefit from it.

“We would now like to see more Help to Buy applications in the Midlands and the North of England to ensure as many people as possible can use the scheme.”

Connells saw applications from all types of buyers rise by roughly a third in November compared to the same month of 2012.

The number of prospective buyers registering their interest has also climbed 29% in 2013, and prospective viewings have jumped by a fifth.

Chadney Bulgin mortgage partner Jonathan Clark said his firm’s Help to Buy 2 applicants also tend to be first-time buyers in their early thirties, although the loan size tends to be larger in order to reflect the higher prices of the Home Counties.

He described the figures as positive:

“Help to Buy 2 has lowered the age of a first-time buyer.”

However, he said tough affordability tests meant even “squeaky clean” applicants were not necessarily approved:

“At the moment it has proved very hard to get approval for a Help to Buy mortgage at 95% loan-to-value, but hopefully it will get better when we have more lenders in the market and more competition.”

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