Help to Buy comes to an end

October 10, 2016 by Brendan O'Neill

Property Market

The Help to Buy mortgage guarantee scheme will soon be coming to an end, after helping 86,000 people to buy a home.

Philip Hammond, the new Chancellor, has scrapped the government backed scheme, saying that although Help to Buy has achieved its target, it is no longer required and will cease by the end of the year. The scheme was launched in 2013 and made it possible for people with a 5% deposit to buy a home. The government provided a guarantee for the remaining 15%, so that lenders would be more likely to lend the money to buy a property.

The government has stated that now that lenders are offering more products to those with a 5% or 10% deposit, the scheme is no longer required. In total, both elements of the scheme have assisted 185,000 people to buy their own home, which includes 150,000 first time buyers.

However, the part of the scheme which was aimed at those buying a new build property will continue until 2020. This provides first time buyers with an interest free loan over five years for amounts up to 20% of the property’s purchase price.

The head of projects at the Adam Smith Institute, Sam Dumitriu, said that he agrees with the Help to Buy scheme being scrapped, arguing that it has helped to make the shortage of housing problem worse, as demand increased thanks to the initiative.

Prior to buying a property, it is advisable to seek advice from a CeMAP qualified mortgage adviser, who can help to locate any financial assistance available.