FTBs using H2B 2 up to £180 better off than renting

First-time buyers using the Government’s Help to Buy mortgage guarantee scheme are spending an average of £180 less per year repaying their mortgage than if they were renting.

According to new data from Mortgage Advice Bureau, the average price of property bought using the scheme was £153,447 in March.

Data from Moneyfacts.co.uk shows that based on average Help to Buy 2 property price, the typical monthly mortgage repayment for a borrowers in their first year would be £753, or £9,036 annually.

In comparison, the average rent across England and Wales now stands at £768, according to research by Opinium Research, meaning Help to Buy 2 applicants could save £180 a year, on average.

Mortgage Advice Bureau head of lending Brian Murphy says: “Whatever policies we end up with after the election, our data shows that the mortgage guarantee scheme has worked: it has got first-time buyers onto the housing ladder and it has saved them money compared to renting.

“The scheme has also been a success in that it is being used by the people it was meant to help. When it launched, there was a concern that more affluent borrowers would take advantage of the scheme to purchase expensive homes. However, it’s clear that the scheme is being used by first-time buyers to purchase affordable properties well within their price range. 

“As a result, average Help to Buy mortgage repayments are broadly in line with renting, making homeownership look far more affordable. While the scheme is expected to operate until 2020, lenders need to ensure there isn’t a gaping hole in the market when the scheme comes to an end. Otherwise, borrowers with smaller deposits could find themselves locked out of home ownership.”