What is available as Help to Buy ends?

Lender urges brokers to offer alternatives to first-time homebuyers

What is available as Help to Buy ends?

As the government’s Help to Buy equity loan scheme closed to new applications, a mortgage lender executive called on the property industry to offer more options to prospective first-time homebuyers.

Help to Buy offered first-time homebuyers an equity loan that the purchaser then used to put towards securing a new build. It was designed to help first-time homebuyers enter the housing market and applications closed on Monday evening.

“We’ve already seen a growing number of buyers look beyond Help to Buy to boost their buying budget as the deadline loomed large,” said Ben Bailey, chief customer officer at specialist lender Even. “As lending conditions have tightened, we have seen enquiries rise by 57% in October alone.

“But as Help to Buy disappears from view, it will be imperative that the industry as a whole bands together to pick up the slack and expand the options available to those looking to escape Generation Rent.”

Bailey commented that, while imperfect, the scheme helped more than 360,000 people “break free from the shackles of the rent trap and begin to build property wealth.”

He added: “There were downsides – first timers were restricted to new-builds, often paying a premium for them. But it indisputably gave a leg up to thousands who wouldn’t otherwise have been able to buy their first home.

“Its removal caps a remarkably turbulent period for first-time buyers, with products being pulled left right and centre, and rocketing rates severely hampering affordability. All at a time of rising house prices and falling real incomes.”

Read more: The pros and cons of the help-to-buy scheme.

Bailey said that those looking to buy their first home should consider what options were available to them.

“The end of Help to Buy has seen innovation in the space, with several new options out there to help first-time buyers into their new home,” he commented. “Now more than ever, a good mortgage broker, who can advise on all the alternatives, is worth their weight in gold.”

Read more: Help to Buy scheme ending - What happens next?

Options for those who were unable to apply for Help to Buy included shared ownership, Deposit Unlock, and the government’s First Homes scheme.