Reports of the demise of Help to Buy have been misconstrued. It’s alive and well as Sharon Dale reports
In an era where many like their news “bite-size”, it’s not surprising that headlines announcing the “End of Help to Buy” have led to confusion.
Its death has been greatly exaggerated. Only one of the government-backed schemes on offer is to be dropped. The Help-to-Buy mortgage guarantee, which gives surety for lenders who offer high risk 95 per cent loans, will end on December 31.
The Help to Buy equity loan for newly-built homes, is alive and kicking. This sees the government lend up to 20 per cent of the cost, interest free for five years. So buyers only need a five per cent deposit and 75 per cent mortgage.
The Help to Buy ISA is also still available. It gives a generous 25 per cent boost to savings towards a deposit. For every £200 saved, the government adds a bonus of £50. The maximum bonus on savings is £3,000.
Both these schemes have been extended until 2020.
Housing and Planning Minister Gavin Barwell says: “Help to Buy is not coming to end. It was always the case that we were planning to bring the mortgage guarantee scheme to an end in 2016. We will continue to support people to get on the housing ladder through the Help to Buy ISA and the Help to Buy equity loan scheme.”
Steve McElroy, Sales Director of Miller Homes, is pleased to hear of the commitment to at least another four years of Help to Buy.
“The equity loan has been popular in Yorkshire and has played an important part in helping people realise their house buying dreams.
“It has given us another tool to help buyers and we remain committed to providing this initiative to unlock the housing market for those that need a helping hand. Since its inception we have had hundreds of buyers using it.”
He adds that the removal of the Help to Buy Mortgage Guarantee should have little impact on buyers.
Patsy Aicken, sales director for Redrow Homes in Yorkshire, agrees and says. “There were some reports that Help to Buy had closed altogether, which was not helpful.
“The equity loan scheme for new-builds has been hugely popular here in Yorkshire and we’ve helped very many people onto the housing ladder, including first-time buyers and families who were previously trapped in a home too small for their needs.”
The Help to Buy scheme was launched in April 2013 and nationally it has helped more than 185,000 people to achieve their dream of home-ownership. Of those, 150,000 have been first-time buyers and 95 per cent of the sales have been outside London.
Last year, around half of customers who bought a Redrow home in Yorkshire used Help to Buy. Among them were Paul and Lindsay Dixon, who bought their Abode style home at Horsforth Vale, near Leeds.
Paul, an operations manager for an energy firm, says: “Help to Buy will make things a little bit more comfortable for us in the first few years and takes the pressure off mortgage repayments.
“We didn’t realise it was available to us because we weren’t first-time buyers. It was the sales assistant at Redrow who explained that we could use it and it was a no brainer.”
Patsy Aicken adds: “Either it makes buying affordable or more affordable or it means people can invest in a better or bigger property than they had originally thought possible. We are seeing people use it to avoid the expense of a second move further down the line as their family grows or circumstances change.”
Teachers Tom Watson and his partner Natalie used the equity loan scheme to buy a three bedroom home on Miller Homes’ Privas Court development in Wetherby, where prices start from £270,000.
“Help to Buy is a fantastic way to help people like us get a foot on the property ladder in a great community and with a quality home,” said Tom. “It gave us that little extra help to be able to afford a home that we can enjoy for many years to come.”
*For in depth detail on the Help to Buy schemes visit the government’s own website, www.helptobuy.gov.uk/help-to-buy-isa/how-does-it-work/