View more on these topics

Brokers call for Govt clarity on Help to Buy 2

Brokers want more clarity from the Government on how the second phase of Help to Buy will operate following the news the scheme is being brought in three months earlier than planned. 

The first part of Help to Buy, a shared equity scheme for new build homes, was introduced in April. The second part, a £130bn mortgage indemnity scheme for new and existing homes worth up to £600,000 was due to come into force in January. 

Under the second phase, borrowers put down a deposit of between five and 15 percent, and the Government will guarantee up to 15 per cent of the purchase price in return for a fee from the lender.

The Government has now announced lenders will be able to begin writing loans through Help to Buy 2 from this week, although guarantees will not be available until January. Lloyds Banking Group and Royal Bank of Scotland have already signed up.

Lenders have to hold roughly six times more capital for loans at 90 per cent loan-to-value or over than they do on loans under 60 per cent LTV.

The Bank of England’s financial policy committee will have the power to monitor Help to Buy and, if there are signs a house price bubble is emerging, recommend changes to the scheme such as lowering the £600,000 limit or increasing the cost of the guarantee.

John Charcol senior technical manager Ray Boulger says: “This is all skin without substance, nothing much is going to happen until the lenders actually produce some products. It is odd for lenders to commit to this before fully knowing what the capital relief or the fees will be.”

London & Country associate director of communications David Hollingworth says: “Lenders can write business now, but everyone is wondering what products they will be writing that business on. We are waiting for more detail.”

Recommended

Apfa pushes FCA for regulatory dividends

Apfa has called on the FCA to introduce a regulatory dividend for advisers.  The trade body has written to FCA chief executive Martin Wheatley outlining a series of steps the regulator should take to improve the business environment for advisers. Apfa argues that, given the increased professionalism under the RDR, advisers require less supervision and […]

Business-Corporate-Commuters-People-700x450.jpg

ONS reveals 400,000 drop in pension scheme membership

The number of people paying into a workplace pension scheme dropped 400,000 last year, from 8.2 million in 2011 to 7.8 million in 2012, as the Government’s automatic enrolment reforms were rolled out for the UK’s largest employers. Auto-enrolment began in October last year, requiring all employers to offer a workplace pension to their employees. […]

George-Osborne-Serious-500x320.jpg

Conservative ministers hit back at Help to Buy 2 critics

Conservative ministers have launched a robust defence of the second part of the Help to Buy scheme by claiming it is crucial to boosting home ownership and the building sector. In his speech to the Party’s conference in Manchester today, Chancellor George Osborne dismissed critics and insisted the housing market is still struggling outside of […]

Clydesdale-Bank-700x450.jpg

FCA fines Clydesdale Bank £8.9m over mortgage failures

The FCA has fined Clydesdale Bank £8.9m over failing to treat its mortgage customers fairly after miscalculating repayments on 42,500 mortgages. Clydesdale, owned by National Australia Bank, has agreed to compensate borrowers who underpaid on their mortgages as a result of the errors and is writing to other affected customers. The bank says where its […]

Naming a reward programme

Six tips to get your reward programme name right

by Debra Corey, group reward director  Choosing a name isn’t easy. Whether it’s for your new puppy, a bundle of joy or your reward programme, a name determines a first impression – and often a lasting memory. When it comes to your reward programme, the name will determine how your employees feel about it even before […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment