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Help to Buy closing for new applications

Journalist: Anna Sagar, Mortgage Solutions / Specialist Lending Solutions

ended 29. October 2022

Looking to speak to mortgage brokers about Help to Buy closing for new applications.

  1. Have you seen a drop off in applications leading up to this deadline? 
  2. Will there still be some people caught out by the deadline? 
  3. What will take over from Help to Buy/what would you recommend in its place?
  4. What is the legacy of Help to Buy?

4 responses from the Newspage community

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Editor
Riz Malik
Independent Financial Adviser at R3 Wealth
One of the biggest beneficiaries of the help-to-buy scheme has been the housebuilders. Other than the measures taken during covid, I am not aware of any other sector that has received the same level of support.
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Imran Hussain
Director at Harmony Financial Services
The biggest winner for the help to buy equity loan scheme has been the government and house builders. Great idea but there will be many who will be caught short once they realise they have to pay back a % of the house value now, not what they originally borrowed. There will be some who are now caught out by the deadline, and while nothing will replace help to buy equity loans, there are some private companies looking and offering solutions. The positive now should be that new build properties are priced more accurately, not 20% higher due to help to buy. The legacy help to buy will leave will be a mixed one. It has helped many get onto the housing ladder but how many may not be able to ever afford to clear the equity loan without selling their home.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
Help-to-buy has been excellent in terms of helping people buy property, but it has its downsides, too. It has only helped people buy new build homes, which may not be right, or even available, for some people. It has certainly boosted house price growth, oddly helping some, whilst moving others further away from owning their own home at the same time. And it has created a huge debt issue moving forward. As the extra deposit given is in the form of an equity loan, so as the price of the house has risen (and let's remember we've had two years of record growth), so has the amount borrowed (and therefore owed back). Help-to-buy, in terms of the equity loan version, is the very definition of a double edged sword.
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Mark Robinson
Managing Director at Albion Forest Mortgages
I haven't seen a great deal of help to buy enquiries for a while, indicating that people are aware it is ending. The government has done very little to replace the help to buy scheme, announcing the first homes scheme during the pandemic, but then not really supporting it further. As the first homes scheme isn't widely available and doesn't appear to be changing to be more widely available, it is not really a viable replacement. What lenders have done is bring in the deposit unlock scheme, but unfortunately it does not really offer much that wasn't already on offer. Allowing people to buy a new build home with a 5% deposit, but that was happening already.