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December deadline for Help to Buy mortgage guarantee

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Date: 15/11/2016

December deadline for help to buy mortgage guarantee

Anyone looking to purchase their own home with the backing of the Government's Help to Buy mortgage guarantee is being urged to move fast.
 
Veronica Du’Quesnay, head of the conveyancing department at Redditch law firm Kerwoods, stressed the need to beat the scheme’s 31 December closure.
 
She said: “That is the date when no new mortgages will be accepted.
 
“It is a pity – more than 86,000 households have used the guarantee to buy a home since its launch in 2013.
 
“It has proved very popular but the Government feels it has served its purpose, in some ways it is a victim of its own success.”
 
The guarantee scheme was designed to help lenders offer five per cent deposit mortgages, with the Government taking on some of the risk were borrowers to default.
 
It had always been scheduled to finish at the end of this year, albeit some lenders had called for it to be extended.
 
The Chancellor, Philip Hammond, believes the market has become less reliant on the guarantee, with over 30 lenders offering mortgages worth 90-95 per cent of a property's value independently of the scheme.
 
Ms Du’Quesnay said: “It was introduced to help those with smaller deposits buy their own home, and is has proved highly effective.
 
“Five per cent deposit mortgages will still be available albeit they are expensive. It remains significantly beneficial to put down ten per cent because that is key to a much better interest rate deal.”
 
The scheme applies to any property worth less than £600,000, both new build and older homes.
 
Other high profile initiatives under the Help to Buy banner continue – the equity loan scheme for new-build properties and the Help to Buy ISA. The former is due to run until 2021 and the latter until 2019.