The Intermediary Mortgage Lenders Association has urged the government to provide clarity on how or whether the Help to Buy Equity Loan Scheme will continue after 2021.
The trade body recognised that the government may want to change the scope of the scheme but warned against a policy cliff-edge that would leave some first-time buyers unable to secure a mortgage.
Kate Davies (pictured), executive director at IMLA, said: “We are concerned that funding for Help to Buy is due to be withdrawn in 2021, and that there has as yet been no clear signal as to what, if anything, might replace it.
“Given its success – and its importance in boosting both home ownership and housing supply – we believe that some form of government support should continue.
“Lenders and borrowers place heavy reliance on the scheme, and a major step-change to arrangements would risk significant market disruption and potentially undermine the government’s ambitious targets for new housing supply.
“If changes to the scheme are being proposed, lenders will need appropriate notice in order to plan ahead and deliver positive outcomes – hence our wish to have clarity as soon as possible on the government’s intentions.
“We look forward to hearing the government’s plans and to working closely to continue the development of what has become a key element of housing policy.”
The general consensus from within the industry is the scheme, or something similar, will continue after 2021 owing to its success.
To date the scheme has resulted in almost 170,000 new homes being built and purchased in England, 81% of which were by first-time buyers.
Nearly half (43%) would not have been able to purchase their home without assistance.
In September, IMLA outlined all its concerns in a letter to the Chancellor, Philip Hammond.
The Intermediary Mortgage Lenders Association represents 43 UK banks, building societies and specialist lenders.