Got a Lancaster or Morecambe story? Contact us.
Cameron hails Help to Buy a success
12:39am Monday 11th November 2013 in © Press Association 2014
Figures showing average-income first-time buyers make up the bulk of 2,000-plus people taking up a government-backed mortgage scheme are proof the policy is working, David Cameron said.
The Prime Minister said initial figures showed Help to Buy - which critics say risks fuelling a new house price bubble - was helping the "hardworking people" it was aimed at.
He is hosting a reception at 10 Downing Street for some of those accepted for a total of £365 million of home loans in the first month of the controversial three-year offer in an effort to highlight its benefits.
Under the latest phase, rushed forward three months as part of a Conservative response to the rising cost of living, people can buy properties worth up to £600,000 with a deposit of only 5%.
NatWest owner Royal Bank of Scotland said it has taken 1,075 applications for loans - including from 75 teachers and 83 engineers - to buy properties with an average value of £167,565.
Almost three-quarters of customers were looking to buy their first home.and the majority were couples applying with a joint salary of under £50,000 and borrowing around £159,000.
Halifax, which is part of Lloyds Banking Group, has received 1,309 applications, of which more than 80% were from people outside London and the South East and first-time buyers.
The average price of a property it was lending towards was £160,157, with the first four weeks of the scheme generating applications to the value of £194 million.
So far, just a handful of lenders have launched products under the latest phase, led by the UK's state-backed banks.
But others, such as Santander and Barclays, have announced they intend to participate.
Liberal Democrat Business Secretary Vince Cable and the boss of state-backed lender Lloyds however have been among those raising the alarm about over-inflating prices.
The chairman of the Council of Mortgage Lenders has warned the market risks becoming "addicted" to the flagship scheme unless a clear exit strategy is set out.
And Commons treasury select committee chairman Andrew Tyrie last week called on the Bank of England to shed more light on what powers it has to stop a house price bubble.
Number 10 said the average £900 monthly repayment represented 24% of borrowers' gross income - in line with the Council of Mortgage Lenders' historical average for the UK.
And fewer than a quarter were for homes in London and the South East, where house prices have rocketed.
Speaking ahead of the reception, Mr Cameron said: "Four weeks in and it's clear that Help to Buy is already delivering.
"In just one month, over 2,000 people have been accepted for a Help to Buy mortgage. Or put another way, 75 families every single day have been put on the path to owning their dream home.
"But the best thing about Help to Buy isn't the statistics - it's who is really benefiting. Most Help to Buy applicants are first time buyers, young and have a roughly average household income.
"This is all about helping hardworking people get on the first rung of the property ladder - and helping them get on in life.
"Owning a home is about more than four walls to sleep at night. It's about independence, self-reliance, moving on and moving up. Above all, it's about aspiration.
"Help to Buy is helping people realise the dream of home ownership - and it's a key part of my plan for Britain."
Mr Tyrie has written to Bank Governor Mark Carney asking him to clarify exactly what the Bank's role will be in overseeing the new phase of the scheme.
He said there were apparent contradictions in what has been said by ministers, with some suggestions that it would be advisory-only and others implying that it could go as far as blocking the scheme.
There have been only 10 completed home buys under the new phase of the scheme so far.
Halifax said its first happened on October 30 when a first-time buyer from Dartford, Kent, bought a two bedroom flat for £153,500 with a 5.5% deposit.
Mortgage director Stephen Noakes said: "We're now one month into the scheme and we've seen a really strong start.
"We're receiving a high level of interest but, more importantly, this is translating into full mortgage applications where borrowers across the country are now well on the way to buying their homes.
"The applications show that through the scheme we're lending to borrowers who can afford a mortgage but, until now, have not had the necessary deposit."
Among those expected to attend the Number 10 event are newlyweds Bethany and Josh Riley from Darwen, Lancashire, who said it was "a dream come true" to be in their new home by Christmas.
Others are 24-year-old computer engineer Aaron Ward from York, nanny Stacey Judge and welder Ryan Parks, both also 24, from Maidstone, 30-year-old Southampton estate agent Sharon O'Donnell, Holly Sykes, a civil servant from Weston-super-Mare, first-time buyer Louise Cox, 26, a police officer from Bedford, Ian Pidgley a 22-year-old marine electrician from Southampton and Edinburgh siblings Haley and Struan Preston, the first RBS customers to complete on a purchase.
Shadow chief secretary to the Treasury C hris Leslie said: "If the Government was serious about helping first-time buyers they would also be bringing forward investment to build more affordable homes.
"Rising demand for housing must be matched with rising supply, but under this government housebuilding is at its lowest level since the 1920s.
"You can't deal with the cost-of-living crisis without building more homes. Unless the Government acts now to ensure more affordable homes are built then soaring prices risk making it even harder and costlier for people aspiring to buy their first home.
"And the Bank of England should immediately review the details of the scheme, rather than wait a year.
"For example, why has George Osborne decided that a policy which should be about helping first-time buyers will allow taxpayer-backed mortgages for homes worth up to £600,000?"