Lenders struggling with Help to Buy
Help to Buy was launched on 1st April and provides an equity loan worth up to 20% of the value of a new build home on the condition that the purchaser puts down a 5% deposit from their own savings.
But so far only Halifax, Lloyds TSB and Barclays have offered products to cater for the government-assisted scheme.
Sue Anderson, head of member and external relations at the Council of Mortgage Lenders, said: “It is clearly a tight timescale but I am sure that a number of lenders are looking at the details of the scheme.”
The CML said that it may appear to the government that this product is very similar to FirstBuy but to a lender it isn’t.
Anderson said: “Lenders have a diligence process to go through and all the details of the scheme need to be known before they can complete their decision making process. We are helping lenders by making sure their questions are put to the relevant bodies such as the HCA and CLG and they receive answers.”
Nat West, which currently offers the FirstBuy product, has yet to put out an updated version of the product which caters for the new elements of the scheme.
A spokesman for NatWest Intermediary Solutions said: “We are currently reviewing the details of the new Help to Buy shared equity scheme, as we do with any new scheme like this, including how it differs from the FirstBuy scheme that we have supported and will make an announcement once this is complete.”
Andy Frankish, new homes director at Mortgage Advice Bureau, said he thought that the timescale for the shared equity launch was unrealistic but was glad that some lenders had made it to market in the short time they had available to them.
He said: “At least we have a live product that has got some great momentum and sparked a huge spike in activity.”
But he said he would be disappointed if more lenders did not join over time.
He added: “I’m already speaking to a number of lenders but there doesn’t seem to be much urgency around supporting the product, this is a three year product so I would hope we will end up with a broader panel than FirstBuy.”
A spokeswoman for Barclays agreed that the timing between the announcement and the launch was tight. But she added that when the full information was given about the scheme the lender could see it was broadly building upon the FirstBuy scheme that it already participated in.
She said: “We are accepting applications on our existing FirstBuy products which will be rebranded as ‘Help to Buy’ over the coming weeks.”
Nationwide are believed to be looking at a new version of its FirstBuy offering but were unavailable to comment on its progress.