The confirmed end of the government’s Help to Buy mortgage guarantee scheme is a ‘big signal’ that the market has picked up significantly since its introduction, a residential property law expert said today.
The mortgage guarantee scheme has been available since 2014 and was always due to come to an end this year and the government has now confirmed that the offer won’t be extended.
The scheme offered banks and building societies a government guarantee on mortgages of up to 95 per cent loan to value (LTV) on existing properties and as confidence returned there was less reliance on the scheme.
Other elements of Help to Buy, including the ISA and the equity loan scheme will remain available.
Over its lifetime the mortgage guarantee scheme has helped more than 80,000 households and Michael Foxford, partner at Birchall Blackburn Law said it has ‘helped to improve confidence’.
However, Michael said: “This element of the government’s Help to Buy offering did exactly what it set out to do and it has helped thousands. It gave the market a boost and it coming to an end isn’t anything to be concerned about, there’s nothing to suggest the market will take a nose dive as a result – it’s in the best position it has been for a long time.
“This initiative was part of a huge effort to help increase levels of home ownership and has really helped the market to get back to normal.
“That said, I’d be interested to see if anything else comes out in its place or what schemes more lenders might now come up with.”