They suggest that, in order for the Chancellor’s new Mortgage Guarantee and Help to Buy shared equity initiatives to work, it is essential that both schemes are available through brokers. The Chancellor announced in the budget that he had consulted with lenders, but there is little sign that this was also broadened out to include mortgage advisers.
Help to Buy appears to be an expansion on the NewBuy scheme, extended to include all buyers wanting to buy a newly built home. This could give a much needed help to second steppers – however results of the NewBuy scheme have been disappointing, seemingly due to the fact that the scheme was rolled out through such limited distribution via a closed shop of a very small number of mortgage advisers that house builders approved.
Unfortunately, while the type of borrowers who can access the Help to Buy equity loan scheme has been broadened out, the distribution appears not to have been, as the Treasury website declares “Buyers will be able to access this through participating housebuilders and HomeBuy agents.”
Much more positive is the proposed Mortgage Guarantee scheme, however, based on the fact that Intermediaries accounted for more than 50% of lending in 2012, to be truly effective this also needs to be available through the intermediary community or else at least 50% of the borrowers who need it the most may find that it is not available to them.
Toni Smith, sales operations director at First Complete says:
“While all real measures to get people on the housing ladder are a good thing, we mustn’t lose sight of the fact that the key objective is to get the housing market moving; restricting the channels through which the new schemes are available means that they will automatically have a limited chance of success.
“The government will hopefully realise, from the limited success achieved by its NewBuy initiative, that the only way to make a scheme truly successful is to harness the help of those who know the market best - mortgage advisers.”
