There is a lack of Help to Buy remortgage products

Michael Lloyd

November 19, 2018

There is a lack of options for people remortgaging with the Help to Buy equity loan scheme.

Moneyfacts data shows there are 301 Help to Buy mortgages available in England, Wales and Scotland from 21 mortgage providers.

However for remortgage there are just 85 products from eight lenders.

Craig Hall, head of broker relationships and propositions at Legal and General Mortgage Club, said: “More choice from lenders for Help to Buy remortgage options would be a positive move.

“Looking beyond 2023 the industry will need to work together to ensure first-time buyers and borrowers with Help to Buy loans remain supported. “

Dilpreet Bhagrath, mortgage expert at Trussle, agreed that more needs to be done.

She said: “Currently, there are not enough providers who offer Help to Buy remortgages, and for many of those that do, customers face strict restrictions.”

Ray Boulger, senior technical manager of John Charcol, blamed onerous admin requirements from The Homes and Communities agency, for the lack of providers.

He said when you want to remortgage a first charge Help to Buy loan while retaining the second charge, the agency requires another valuation and won’t accept one from the lenders.

He said: “There’s significantly less choice than in the purchase market and less choice in Scotland than England and Wales too because many lenders don’t lend there.

“I don’t understand why the government’s admin requirements have to be so difficult.

“If you want to remortgage and keep your second charge equity loan it will take significantly longer because of the time this agency takes to do the admin.

“It extends the timeframe and adds to the cost. It should be a tick box exercise for homebuyers keeping the same amount of second charge equity, while the extra admin would be acceptable if the borrower wants to borrow more.

“For straightforward cases of swapping one for another the government should make it much simpler and cheaper and that would see more lenders come to that market.

“That said most if not all have the choice of product transfers so the damage of not having much choice in market is mitigated by most lenders offering decent product transfer products.”

Greg Cunnington, director of lender relationships and new homes at Alexander Hall, offered his own interpretation of why more lenders don’t offer the product.

He said: “I think a lot of lenders are worried about reputational risks on the process.

“I don’t think they’re worried about going into Help to Buy remortgage, it’s all the other areas around it and having to do the cashback and legals.”

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