If you’re a first-time buyer looking to get on the housing ladder, you may be worrying about what will happen when the Government’s Help to Buy Mortgage Guarantee Scheme comes to an end in December 2016.
Our advice at Felicity J Lord estate agents is you don’t need to panic, there are plenty of other mortgage options available to help you buy your dream home.
When the scheme was first introduced in Autumn 2013, it was a lot more difficult for people to obtain finance from mortgage lenders and mortgage rates were much higher. The scheme meant you could buy your own home with as little as a 5% deposit and the Government would act as guarantor for the remaining 95%.
But now mortgage lenders offer plenty of similar schemes with 90 to 95 per cent mortgages, alongside record low mortgage rates not seen in 45 years, which has resulted in applications for Help to Buy decreasing dramatically.
We have plenty of praise for the scheme; after all, it helped 86,000 people get their keys to the door; but it hasn’t always been plain sailing as it was hard for many prospective buyers to get accepted and it caused delays where property chains were involved.
We’d rather see the Government put their efforts into updating our antiquated planning laws and increasing the supply of new housing so that demand stops outstripping supply, which is what keeps house prices so high.
We’d also like to see the amount of Stamp Duty reduced, which is an additional tax burden on buyers and prevents many people from moving up or down the housing ladder.
The scrapping of the Mortgage Guarantee Scheme is unlikely to affect other Help to Buy schemes, which include equity loans to buy newly-built homes, as well as the Help to Buy Isa savings scheme which is aimed at those saving for a deposit.
If you do want to apply for the Help to Buy Mortgage Guarantee Scheme, there’s still time to get the backing you need before Christmas; however, our advice at Felicity J Lord estate agents is you don’t need to rush. An impartial mortgage broker can help find the right option for you.