Help to Buy mortgage guarantee ends

30 December 2016
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The Help to Buy Mortgage Guarantee scheme ends on 31 December 2016. Although it received a mixed reception overall, it’s estimated to have helped around 100,000 people since its inception.

Originally announced in the March 2013 Budget, the scheme allowed people with smaller deposits (5% of the value) to make a house purchase, as the government would guarantee repayment of the loan to the lender for up to a further 15%.

 

However, because so many banks and building societies now offer high loan-to-value mortgages which have a similar structure, it was decided to scrap this scheme.

The Help to Buy equity loan scheme, however, which allows you to borrow up to 20% (or 40% in London) of a property’s value from the government, is still running.

 

Shelter, the housing and homelessness charity, says that the Help to Buy schemes have added £8,250 to the average house prices since 2013. It states: “The fundamental problem with Help to Buy is that it tries to solve the problem of unaffordable house prices by making it easier for potential buyers to access a mortgage. As the amount of mortgages issued are a key driver of house prices, the schemes push up prices further.”

 

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