Help to Buy will now be extended helping people to buy any property under the value of £600,000, rather than just new builds.
The announcement was made last week when Chancellor George Osborne met with mortgage lenders and house builders to update on progress prior to the January launch of the Help to Buy scheme.
The Chancellor said: "Our goal is very simple. We want to help people who aspire to buy their own home, who can afford to do so but for whom the mortgage market is not working."
The report was welcomed by Council of Mortgage Lenders who have been advising the government on a range of operational issues relating to the scheme.
The CML has emphasised that, to be successful, the Help to Buy mortgage guarantee scheme needs to:
– be straightforward for lenders to implement and administer (particularly given the short timescale available within which systems changes need to be made)
– have clear success criteria, and a clear exit strategy – the three-year nature of the scheme is subject to review by the Financial Policy Committee; lenders do not expect to see the scheme become permanent or semi-permanent by default
– be accompanied by an equivalent government focus on the supply of new housing (not just the supply of credit), to avoid the unwelcome effects that stimulating demand without also increasing supply would create.
CML, director general, Paul Smee said: "The mortgage market is open for business, and it is clear that government support has helped to create more favourable market conditions for home-buyers.
“Lenders, whether they choose to participate in the guarantee scheme or stay outside, will continue to do their utmost to meet households’ needs for mortgages, but always in a way that is responsible."
Eddie Goldsmith, Chairman of the Conveyancing Association stressed the importance of consumers taking part in the scheme choosing their conveyancer wisely.
He said: “Help To Buy is an expansion of a Government initiative to provide loans to help people on to the property ladder, and this adds an extra layer of complexity to the conveyancing process.
“While the number of people applying for Help to Buy increases, there are limited numbers of conveyancers who have experience of the additional paperwork involved.
“Already, 4,000 buyers have used the scheme and many have had to change their conveyancer half way through because their initial choice lacked sufficient knowledge and training.
“Lack of expertise in this new area can lead to delays which could mean the buyer loses their purchase, so our advice to new buyers is to choose your conveyancer carefully and don’t settle for anything less than an expert.”
What do you think about the extension? Do you feel like conveyancers are up to speed on the requirements of the scheme?
