With property market prices increasing rapidly, it is becoming progressively difficult to purchase a house as a young first time buying. However, the Governments Help to Buy ISA gives first time buyers hope, with the opportunity to increase their savings by 25%.
The recent figures released by ONS, revealed which locations in the UK the scheme was most popular. With applications for first time buyers to apply for the scheme open till 2019, Sellhousefast.uk, took a sample of a number of these cities to analyse the statistics and ascertain just how many national homebuyers could afford a property even witht the ISA.
Results highlighted the difficulty of purchasing a property in today’s competitive housing market. Among the cities, the Help to Buy scheme proved most popular in locations such as: Bristol (405), Birmingham (594) and Leeds (850). The average house pricing in these cities, were significantly lower than the £250,000 Help to Buys ISA limit.
Contrastingly in Oxford, not less than 1% of those were able to take advantage of the scheme than those in Leeds, despite the median population being under the average age in England. Therefore, we may assume that there is likely to be a higher likelihood of a greater number of first time buyers.
Similarly, this is an occurring issue among other cities with the least ISA Bonuses Paid; in places such as Cambridge (11) and Winchester (29). The average house price of these cities are populated with those living more affluently, with prices of houses in Oxford averaging at £411,000. This could limit the availability of houses available to those looking to use the scheme. There is less choice of properties available in these areas, as the majority would exceed the limit of £250,000 allows you to buy at.
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Contrastingly, the results present us with another factor to consider. The average age of those living in towns such as Blackpool and Gloucester have a higher average age per town, so the demand for first time buyers would not be as high.
Of course, there are certain anomalies within the results presented, such as the low rate of Lincoln- despite the average population being moderately young, and house prices being low. This highlights the multitude of factors that has to be taken in when considering the levels of ISA Bonuses being paid.
However, it does seem that new rules to the scheme may need to be put into place in order for more first time buyers to take advantage of this in places where the average house is costing a lot more than £250,000. This has been actioned in London, where the limit of the Help to Buy ISA reaches £450,000; however again in London the average house price is well over, at £641,298.
Robby Du Toit at Sellhousefast.co.uk responded to this quoting: “It is a competitive housing market, and with house prices booming in the last few years, it has never been more difficult to be a first time buyer. Whilst the Help to Buy Scheme has enabled people in places such as Leeds and Birmingham, it is clear the government should reassess the scheme, to benefit everyone, before people can no longer apply in December 2019”.
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