Two of the UK’s biggest banks said that they have received over 2,000 loan applications in a month under the coalition government’s Help to Buy scheme.
Lenders Royal Bank of Scotland (RBS) and Halifax received a total of 2,384 loan applications between them, worth up to £365m ($583m) in mortgages. The Help to Buy scheme sees lenders offering mortgages with as little as a 5% deposit from borrowers, an additional 15% guaranteed by the UK government.
Prime Minister David Cameron said: "Four weeks in and its clear that Help to Buy is already delivering.
"Most Help to Buy applicants are first-time buyers, young and have a roughly average household income. This is all about helping hardworking people get on the first rung of the property ladder."
RBS, was quoted by Reuters as saying that the average amount its customers wanted to borrow was £159,000 and the average price of the home for purchase was £167,565. The bank also said it had already approved 169 mortgages of the 1,075 applications received.
Of the total mortgage applications received, 73% were from first-time buyers, claimed the company.
Meanwhile, RBS’s rival Lloyds Banking Group’s Halifax said it received 1,309 mortgage applications for properties worth an average of £160,157. More than 80% of applications that were received came from outside London, according to Halifax.
RBS, RBS-owned NatWest and Halifax are among the few banks who have taken up the extended scheme. HSBC and Barclays plan to offer Help to Buy mortgages in the future while second biggest British lender Nationwide is still undecided.
The first phase of the Help to Buy scheme, launched in April, saw the government offer to guarantee up to 15% of the deposit but only on new build homes and only for first time buyers. The extended scheme means anyone buying any type of home up to a value of £600,000 can now take up the government’s offer.