Help to Buy update
Mon 03 Oct 2016
Local buyers they have less than three months to take advantage of the Government’s Help to Buy mortgage guarantee after confirmation that the scheme will finish at the end of the year.
The Help to Buy mortgage guarantee scheme was designed to help first time buyers on the property ladder by encouraging lenders to offer more 95% loan to value mortgages. While homebuyers only need to raise a 5% deposit, the Government provides a guarantee on up to 15% to give mortgage lenders the incentive to loan larger amounts.
Crucially, the mortgage guarantee scheme is available on all properties, not just new-builds – and the Government says it has helped more than 86,000 households to move house. Other parts of Help to Buy, which includes the equity loan scheme available on new build properties and the Help to Buy ISA bank account, will continue.
Chris Green, director at Green & Co, said: “We welcomed Help to Buy when it was introduced and our Financial Services team has supported a number of buyers who have used it to get their first home in the local area over the last couple of years.
“There is no doubt that the mortgage guarantee scheme has increased the availability of 95% mortgages, and there is still time to take advantage. However, there is no suggestion that high loan to value mortgages will cease to exist when the scheme ends.
“In fact, the Government has said itself that it’s finishing because renewed confidence in the market means there are more private lenders offering 90% to 95% mortgages – which means it could be a great time to look at your options when it comes to buying.”