HTB hotspots revealed

HTB hotspots revealed

New analysis from Private Finance has revealed that Help to Buy borrowers in Wokingham have an average of £72,631 in equity once their loan is repaid and borrowers in Bristol have £60,232 - but which UK area came out on top?

Of all the ‘Help to Buy hotspots’ – the 51 local authorities where 100 or more Help to Buy equity loans have been completed each year since the scheme was introduced – borrowers in Greenwich have seen the value of their home rise the most since 2013 relative to the original equity loan amount borrowed.

Original adopters of the scheme will start to incur interest on their loans next year and borrowers must repay 20% of the property value at the time of selling (rather than the original loan).

Applying the same rate of house price growth to the original equity loan (to provide an estimated repayment figure) increases this from £27,082 to £43,666. However, extensive house price growth in this area means borrowers can repay their debt and still benefit from £92,192 in capital gains, notwithstanding further gains made via mortgage repayments.


However, not all Help to Buy borrowers have fared as well since joining the scheme in 2013. In Stockton-on-Tees, average first-time buyer house prices have risen from £102,409 in April 2013 to just £114,265, an increase of 12%. This is far less than the original equity loan which would now be worth £29,767. This leaves Help to Buy borrowers in this area with a repayment loan that is £17,911 more than their capital gains.

Other regions where house price growth has failed to cover the cost of the equity loan include County Durham (where repayment loans are £17,140 higher on average than capital gains), Rochdale (£11,503), Barnsley (£8,895) and Wolverhampton (£8,313). In total, borrowers in 19 Help to Buy hotspots have not seen enough house price growth to cover their equity loan.  

Seven of the top 10 areas where the average Help to Buy equity loan is larger than house prices growth between 2013-17 are situated in the North of England (and are all outside of the South), demonstrating a clear North/South divide in terms of prospects when selling a Help to Buy home.

Shaun Church, Director at Private Finance, commented: “The early adopters of the Help to Buy equity loan scheme will begin incurring interest on their equity loans next year, which may prompt some to consider moving on and repaying their equity loan. Across the regions, some stand to make significant gains thanks to rising house prices, which can cover the equity loan and leave more to invest in a new property purchase. However, others haven’t fared as well, with a slower rate of house price growth in the North meaning borrowers in this part of the country are at greater risk of their repayment loans outweighing their capital gains.

For those staying put, remortgaging a Help to Buy deal is more complicated than a standard remortgage. Product choice is still fairly limited, with many lenders not supporting remortgages for these types of loans. Many offers can only be secured via products exclusive to brokers. Expert advice is also crucial to ensure borrowers can balance the dual costs of repaying their mortgage and equity loan interest.”

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Tony Gimple
Tony Gimple 09 Dec 2017

Linking professionalism to limited company borrowing is a flawed concept. Despite S24 etc., limited companies are the most tax inefficient way of running a property business and leave borrowers seriously...

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

It's normal. If you plan to buy a house in one of the most beautiful spots in the country you should pay a high price.

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

I think that the situation will be the same at December.

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Scott Garnet
Scott Garnet 06 Nov 2017

If you have a patio or a porch it is important to make sure that any connecting doors are secured. Good advice for sliding glass doors is replacing the panels with storm resistant glass and getting heavier...

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richardrawlings
richardrawlings 01 Nov 2017

What has not been mentioned here is the effect of not only higher interest payments, but also that these payments are less likely to be offsettable as a business cost due to the scaling back of mortgage...

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Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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