With the first wave of Help to Buy equity loan borrowers aware that their 5 year deals are close to coming to an end, the realisation that they will have to put a new mortgage in place, as well as starting to pay back their equity loan is a very real one.
Though there are a number of lenders still offering Help to Buy mortgages, it is the gap in those offering remortgages which is causing the concern for those who have utilised the scheme.
The Help to Buy scheme was first announced by the government in 2013 as a means to assist people struggling to save for a deposit for either their first home, or to move up the property ladder if they had a limited amount of equity.
One 77 Managing Director Alastair McKee recently commented:
“I think it’s safe to say that Help to Buy has been a huge success, it’s allowed thousands of people to get onto the property ladder who would otherwise have been priced out of the market due to deposit demands on new builds.
We are now five years on and those people who got on board at the start are probably looking at how much equity they’ve gained and are feeling rather smug.
Help to Buy has a few downsides, I personally feel it should only have been offered to first-time buyers and the limit outside of London should have been lower than the £600k limit.
We’ve seen buyers use the scheme to bypass one rung of the property ladder, which they’d not be able to do if it was for the sole use of first-time buyers.
The only other downside is that in my view the whole deck of cards that is the UK housing economy is now built on Help to Buy so it’s going to be difficult to wean people off it without the cards collapsing.
The problems that we see time and time again is that the Homes England is in complete turmoil regarding the valuation processing and timings.
This turns a simple transaction into months and months of waiting and chasing.
The other bit of logic I find hard to fathom is that there are still lenders that will lend on a Help to Buy purchase, but won’t accept a Help to Buy remortgage or allow them to raise money to buy it out or will restrict the LTV.
Some lenders are better than others, but in my view, none of the big players in the industry have been innovative enough in this area.”
If you have a Help to Buy mortgage and are looking to remortgage do not hesitate to contact us today. We are experts in assisting Help to Buy customers and as always, are services are completely fee free.