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Consumers left confused about Help to Buy

Consumers left confused about Help to Buy

Category: Mortgages

Updated: 21/08/2017
First Published: 05/11/2013

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

According to research by the Building Societies Association (BSA) there's a large amount of confusion surrounding the Government's Help to Buy scheme, particularly the mortgage guarantee element, which has left 43% of active first time buyers and home movers confused about the potential benefits.

Almost a third (or 31%) of prospective home buyers don't know whether there's a difference between a 95% mortgage offered by a lender signed up to the scheme and the same value mortgage from a lender which hasn't, and a lot of consumers assume there'll be more benefits than there actually are.

Eighteen percent of first time buyers (FTBs) and 17% of home movers think they can borrow more through this scheme than with a so-called standard 95% mortgage, whilst 12% believe their mortgage repayments will be lower. One in ten FTBs and 5% of home movers believe they'll be protected by the scheme if they can't keep up their monthly payments whilst 12% think they'll be protected if their house price falls, and 24% of FTBs (and 22% of home movers) think that they're more likely to be approved for a Help to Buy mortgage than a standard one.

In fact, none of these assumptions are true.

The Help to Buy scheme was designed to improve availability of high LTV mortgages by encouraging lenders to offer loans to borrowers with small deposits, thereby increasing consumer confidence and helping get more people on the housing ladder. There's no extra protection, homebuyers can't borrow more than normal and it doesn't mean it'll be easier to get a mortgage either – the same lending rules apply whether a lender is enrolled in Help to Buy or not, and in fact borrowers could well be subject to stricter requirements under the scheme.

The confusion has led industry experts to urge providers to thoroughly explain the scheme to applicants so there won't be any misunderstandings, with the need to explain the lack of protection being particularly important to ensure there won't be a shock later down the line.

Sylvia Waycot, editor of, said: "It is vitally important that the correct message gets through to potential home buyers as to what the scheme will actually do for them, and this can't be left to the last minute or when an application is being completed.

"The industry needs to work together to market the real benefits of Help to Buy because there are many, and after years of drought in the mortgage market the last thing we need is for confusion to wipe out potential recovery."

What Next?

Find out more about:

Help to Buy: Mortgage Guarantee

Help to Buy: Equity Loan

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