Saturday, 31 December 2016

Help To 'Buy Mortgage Guarantee Scheme' Finally Comes To An End


A major scheme to give people a helping hand onto or up the housing ladder closes on Saturday.

The UK-wide Help to Buy mortgage guarantee scheme opened in October 2013, to help people with deposits as low as 5% to purchase a property.

Recent Government figures covering the period up to the end of September show that more than 95,000 mortgages have been completed with the support of the scheme, which enabled lenders to purchase a guarantee on mortgage loans to protect them against losses.

In September, the Government confirmed that the scheme would finish as planned at the end of 2016.

It said it was no longer needed as confidence had returned to the market, with more lenders offering low-deposit mortgages. The scheme will close to new loans at the end of business on Saturday.

Critics of the scheme argued it helped to push up house prices. But there were also signs that it stimulated competition between lenders, prompting a fresh wave of low-deposit deals onto the market, many of which were not part of the Help to Buy scheme.

According to financial information website Moneyfacts, there were around 50 mortgages available on the market for people with a 5% deposit saved in October 2013. Now, there are more than 250 such deals available.

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Charlotte Nelson, a finance expert at, said: "First-time buyers, regardless of if they used the scheme or not, have a lot to thank it for, as prior to the scheme borrowers would have struggled to find a deal that was not 'locals only' or did not require a parent or guardian to guarantee the loan.

"And even if they did manage to find a suitable deal, the cost of the repayments would have been high."

Schemes which continue to run under the Help to Buy banner include Help to Buy Isas, which help people saving for their first home to build a deposit faster, with a top-up from the Government.



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