The controversial Help To Buy mortgage support scheme is enabling 75 families to buy a home every day, David Cameron will say today.
The first figures on Help To Buy, in which taxpayers are expected to underwrite the mortgages of hundreds of thousands of homebuyers, suggest it is more popular than predicted.
A month after its launch, 2,384 people have put in offers on homes under the scheme, totalling £365million in new mortgage lending.
The Prime Minister will insist there is clear evidence that it is supporting responsible lending, rather than encouraging people to overextend themselves. On average, households have asked to borrow £155,000 for houses worth £163,000. The average home is valued at £247,000.
More than three in four applicants are first-time buyers, with many in their early thirties.
Despite fears of a house prices boom, Chancellor George Osborne is thought to be planning to do more to use state guarantees to increase the number of mortgages on offer.
He says the lack of 95 per cent loan-to-value mortgages is a ‘social problem’.
Help To Buy offers loans for new-build homes worth up to £600,000 with a deposit of just 5 per cent.
Experts predict the scheme will increase the number of home sales and may push prices up - but it has been criticised by some, including Business Secretary Vince Cable, for creating the threat of a housing bubble.
But the Chancellor said the idea of a boom was absurd, given that house prices are still a quarter below their peak in most parts of Britain and mortgage availability was running at just over half pre-crisis levels.
Mr Cameron will say: ‘Help To Buy is already delivering.
‘But the best thing isn’t the statistics – it’s who is really benefiting. Most applicants are first-time buyers, young and have a roughly average household income. This is all about helping hard-working people get on in life.’
Applicants have an average household income of around £45,000 and face average monthly repayments of £900.
A two-year, fixed-rate 95 per cent mortgage for the average home under Help To Buy is also £2,557 cheaper per year than in 2007.