Terminated! Hard-nosed Hammond says ‘Hasta La Vista’ to Help-To-Buy Scheme

The UK government has announced the end of the help-to-buy mortgage guarantee scheme. Launched in late 2013, the scheme meant first time buyers only needed to raise 5% of the property value for a deposit, with a government guarantee on a further 15% to give mortgage lenders the incentive to loan larger amounts.

Chancellor Philip Hammond said he would terminate the scheme at the end of this year, claiming that lenders are now offering loans outside the scheme for 5% and 10% mortgages.

Reaction to the announcement has been mixed; city-based brokerage house AmTrust International saw the news as confident step towards a self-sustaining mortgage market and “a watershed moment in the post 2007-8 recovery of the first-time buyer market”.

The association of mortgage lenders was surveyed in March with the vast majority believing access to homeownership would suffer if the government chose to end the scheme.

Real estate experts have allegedly asked the Chancellor to replace help-to-buy with another financial incentive to ensure lenders remain eager to hand out mortgages to first-time-buyers.

Hammond said it was “important to note that the end of this particular scheme does not diminish in any way the government’s commitment to supporting those looking to get on the housing ladder”.

DMZ understands that like any new boss, the Prime Minister is hoping to make an instant impact in her new role, but we wonder whether pulling the rug under prospective first time buyers is a sound decision.

Extending the program would allow millennial’s who are currently locked out of the market the opportunity own a property, as well as encouraging homebuilders to construct new developments for this additional demand.

We can only hope that Mr. Hammond will be back with an alternative scheme to ensure first time buyers aren’t locked into a lifetime of renting.

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