Average price of homes in ‘affordable’ housing schemes reaches £190,000

25 July 2015

80% of Help to Buy mortgages taken out by first-time buyers, compared to 46% across the whole market

The average price paid for properties purchased under the various affordable housing schemes in Britain is £189,7861, according to latest research from the Halifax. This is just 4% (£7,750) lower than the £197,535 average for house purchases2.

Regionally, the highest average price paid by purchasers using affordable housing schemes is in London (£323,148) while the lowest is in the North (£147,437). Nevertheless, the average value of a London property sold in a scheme is 33% lower than the average London regional price (£482,579)2.

Helping first-time buyers onto the ladder

First-time buyers remain the biggest beneficiaries of Help to Buy housing schemes; accounting for 80% of purchases over the last year.This is significantly higher than the 46%3 of all mortgage financed home purchases made by first-time buyers over the same period.

In the last year, improving economic conditions and Government schemes such as Help to Buy saw the highest number of first-time buyers purchase their first home for seven years. The latest official figures reveal that Help to Buy equity loans and mortgage guarantee schemes and NewBuy have helped 99,6014 buyers acquire a home since the introduction of Help to Buy in the 2013 Budget.  Four out five (or 79,680) of these purchases were completed by first-time buyers.

The average price paid byfirst-time buyers(FTBs) using the schemes is now £150,3611; this is 10% (£16,732) lower than the average price paid by FTBs (£167,093) for all housing2. FTBs in London see the largest benefits from buying through affordable housing schemes, with an average price that is just over a third lower (36%) than the average price paid by FTBs in the capital generally2 (£236,733 vs. £367,961).

Craig McKinlay, Mortgages Director at Halifax, commented:

“Many of the affordable home ownership schemes available have been designed specifically to help first-time buyers get on the ladder and support construction of new build homes.

“The latest official figures show this has been successful, as Help to Buy and Help to Buy NewBuy schemes have helped close to 80,000 first-time buyers on to the housing ladder since Help to Buy’s introduction in 2013. As the economy continues to recover and mortgage interest rates remain at very low levels. We expect to see continued growth in first-time buyers during the second half of the year.”


Affordable housing borrower profile

Halifax has looked at the profiles of borrowers buying a home under affordable housing schemes to find what typical scheme users are like:


17%5 of all ‘affordable’ housing transactions in the 12 months to May 2015 were in Scotland followed by the South East (15%) and the North West (10%). By comparison, a fifth (20%) of all housing transactions2 were concentrated in the South East, around one in eight (12%) were in Scotland and 10% were in London.


The average gross annual income of a home buyer purchasing through an affordable housing scheme is £31,88656, which is 5% lower than the average earnings for all those in full time employment (£33,4754)7. Regionally, the average income of buyers under these schemes varies from £50,254 in London to £29,031 in North West.


Affordable housing schemes have particularly helped younger buyers, with over a third (37%) of all affordable home buyers in the age band 20 to 29, compared with just 25%2 of all housing transactions.