There has been a fall in house prices for the month while demand for Help to Buy has increased by 21% over the year.

House prices reduced by -0.5% or -£2,265 for the month to August based on the Nationwide house price index and average property values are £214,745.

The fall in average house prices is good news for first time buyers as they would require a lower deposit or smaller mortgage to get on the property ladder.

Over the year house price growth has slowed from 2.5% to 2.0% and for the 12 months to March 2018 there have been 48,000 completed Help to Buy loans in England up 21% on the same period last year.

Of the Help to buy loans about 80% are accessed by first time buyers and 20% are home movers although account for 8% of total house purchase mortgages in England.

House price growth softens

There has been little change in the balance between housing demand and supply over the past twelve months with house price growth remaining in a narrow range of 2-3%.

Robert Gardner Nationwide chief economist said, subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on house price growth and market activity this year.

Looking ahead much will depend on the broader economic conditions such as the labour market and interest rates although borrowing costs are likely to remain low.

For remortgage buyers lower borrowing costs gives give them an opportunity to secure a competitive mortgage deal reducing their repayments costs.

Overall Nationwide expects house prices to edge ahead by just 1% during the whole of 2018.

These stable house prices preserves property values allowing the equity release mortgage buyer to access wealth for home and garden improvements, gift to a family member or friend or pay for care at home.

Help to Buy demand rises

Demand for the government’s Help to Buy scheme for equity loan is up 21% in the 12 months to March 2018 and available to both first time buyers and home movers.

There were 48,000 Help to Buy completions over this period and the share of first time buyers using the scheme remains at 13% of transactions.

The scheme accounts for 8% of total house purchase mortgages in England although the this is greater in the North at 10% and East Midlands at 9%.

It is difficult to determine if this activity adds to the total number of first time buyers, however, Help to Buy has been a key source of demand for new build homes with 37% of completions.

The scheme has been popular as it offers 20% of the property value as an interest free loan available on new build properties or 40% if you are in London.

You only to find a small 5% deposit and the remaining 75% is provided by a mortgage from a lender for properties valued up to £600,000.

Help to Buy is not available to switching remortgage buyers or buy-to-let investors as it supports new home ownership to people struggling to get on the property ladder.

Help to Buy is due to end in April 2021 although due to the need for increasing housing supply it is likely this type of scheme not come to a complete end after this date.

What are your next steps?

Speak to our LCM mortgage advisers if you are planning to move home, buying your first home, remortgaging your existing home to a new cost effective mortgage deal or are a buy-to-let investor.

Learn more by using the mortgage cost calculators, equity release mortgage calculator and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.

For equity release buyers our London City Mortgage brokers can recommend lifetime mortgages allowing you to receive cash from your property to consolidate debt or gift to a child or grandchild the deposit on their first home.