New first-time buyers are using the latest extension of the Help to Buy scheme to apply for larger homes, according to Connells Group Mortgage Services.
The agent said that almost nine in ten applications made in November using the new scheme were submitted by first-time buyers, who had applied to borrow an average of £145,000.
The scheme has encouraged lenders to provide 95% loan-to-value mortgages by offering them a guarantee worth up to 15% of the value of the property. The intention is to help buyers who would otherwise be unable to afford to raise the high deposits required to buy a home.
(Find out more about Help to Buy here.)
Its impact so far appears to have been concentrated towards the south of England, where seven in every ten applications have been made. Help to Buy has also been accused of contributing towards the latest surge in house price inflation.
But the scheme has allowed buyers to be more ambitious in their choice of property, said Connells Group Mortgage Services Director, Adrian Scott.
"Help to Buy is also having an impact in terms of allowing buyers to purchase a slightly bigger home than they might have done without the scheme," he said.
"If we consider the changing demographic of first-time buyers and the average age being 31, they may be looking for a slightly larger family home, so its great that Help to Buy can enable this type of purchase rather than having to take many small steps up the property ladder."
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Funding for Lending Axed
The Bank of England recently announced that support offered to the residential mortgage market by the Funding for Lending Scheme would be withdrawn in January 2014.
But Help to Buy is fundamental for a sustained recovery in the housing market, Mr Scott added.
"As the housing market continues to recover, nothing can be more important than helping prospective buyers with that first step into home ownership.
"This isn’t just good for them but the whole market as it has a ripple effect for home movers who wish to sell their homes and move on," he said.
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