Advisers shut out from Help to Buy over fraud risks


Mortgage brokers have expressed frustration at a clampdown by the Homes and Communities Agency which effectively cuts them out of the loop when advising clients on the Help to Buy equity loan scheme.

The Help to Buy equity loan scheme allows buyers of new build homes to put down a 5 per cent deposit, with the Government raising up to 20 per cent more.

The HCA says as a result of fraud and data protection risks, brokers should not be informed of the ongoing progress of a client’s application for an equity loan.

Similarly only the client, housebuilder and solicitor should be informed when application to proceed with the loan is granted.

Many brokers have been involved in the entire process since 2013, but it is understood this was the result of misinterpretation of the rules by some Help to Buy agents.

These agents are not directly employed by the HCA, but are appointed by the agency to administer applications.

An HCA spokesman says: “Our contract with the Help to Buy agents, which sets out the data protection security requirements has always been very clear. For data protection reasons, the ATP documents should only ever be issued to the buyer, the developer and the buyer’s solicitor.

“We send reminders every so often to reinforce what the obligations are as per the Help to Buy contract.”

But brokers have hit back and say the rule is damaging to consumers.

Sands mortgage and protection specialist Gary O’Neil says: “The new system will cause unnecessary delays and will ultimately be a bad experience for the consumer. With new build homes especially, you’re looking at a 28-day exchange, brokers possess the skills and qualifications to get through this process accurately and efficiently.

“Forcing consumers to go direct will cause delays which ultimately could result in customers losing out on their dream home.”

He adds under the existing regulations, HCA local representatives get help and support from brokers, but the new rules will see them bombarded by extra work.

John Charcol senior technical manager Ray Boulger says: “I can only assume they think there are some fraudulent brokers out there and those brokers should be reported to the FCA.

“But there are some fraudulent solicitors out there too. Even if they are doing this as the result of one or two bad apples, it is not the right solution. Those brokers should be reported to the FCA.”

Chadney Bulgin mortgage partner Jonathan Clark says: “When arranging Help to Buy mortgage applications on behalf of my clients in the past, most developers have been very happy for me to complete the ATP on their behalf.

“At this stage, none of the information is checked. So whilst it would be a simple matter for a broker to mis-represent the information, it’s hard to see why they would want to do this, as, of course, the application would then be thoroughly assessed by the lender”.

However, Mortgage Advice Bureau new homes relationship manager James Chidgey says the news is not as bad as it first seems, insisting that brokers can still be very much involved in the process.

Chidgey says: “I can completely understand the bewilderment and frustration brokers will have with this. Some of our members have written in asking about it. It is disappointing for brokers that this has been going on for three and a half years and suddenly it gets pulled.

“But all is not lost. The adviser is still in a position to assist the customer apply for the authority to proceed for the application for Help to Buy funds. And the broker will eventually get an email from the Help to Buy agent saying that the authority to proceed has been issued. So it’s perhaps not as bewildering as it first seems.”