Will Demise Of Help To Buy 2 Squeeze Out FTBs?

First-time buyers are the lifeblood of the mortgage market but could lenders be about to restrict their circulation? A recent 16 per cent fall in the availability of 95 per cent LTV mortgages, coupled with the upcoming end to the Government’s Help to Buy 2 scheme, has led to fears about the long-term health of the sector. Figures released jointly by Moneyfacts and AmTrust International, Mortgage and Special Risks show a decline in the number of 95 per cent LTV products in the market between March and August, from 270 to 225. However, the number of available products remains significantly higher than the 195 in August 2015. So should we be worried about this drop? Read more on the Mortgage Strategy website.

Help to Buy 2 Makes It Cheaper To Buy Than To Rent

Paying back a Help to Buy mortgage is cheaper than renting, saving as much as £180 a year, according to Mortgage Advice Bureau (MAB). The average price of a property bought under the mortgage guarantee version of Help to Buy was £153,447 in March, the firm said. MAB claims that based on a 95% loan on the average Help to Buy 2 property price, the typical monthly mortgage repayment for a borrower in their first year would be £753 (or £9,036 annually). In comparison, the average rent across England and Wales now stands at £768 per month. This means that Help to Buy 2 applicants could save £180 annually by paying for a Help to Buy 2 mortgage instead of renting – as well as paying off debt on their own home rather than for a rented property. Read more on the Housing Excellence website.

Help-To-Buy Scheme Needs Replacement Before It Ends

Failure to replace the help-to-buy mortgage guarantee scheme when it comes to an end next year will choke off competition and push the first-time buyer market back into decline, lenders have warned. The Intermediary Mortgage Lenders Association (IMLA), which represents firms that market their products through brokers and advisers, said 65% of its members believed competition would fall unless a permanent indemnity scheme was brought in to replace Help-to-Buy 2.  Read more on the Guardian website.

Help to Buy 2 Opens Homeownership to Those on Lower Incomes

The Government’s Help to Buy mortgage guarantee scheme (HTB2) is opening up the market to lower earners, compared to the mainstream housing market, according the brokerage firm Mortgage Advice Bureau (MAB). In the final three months of 2014, the average salary of people using the scheme dipped 11% from £31,270 to £27,957. By contrast, MAB said, the average salary of borrowers in the wider buying market increased “marginally” from £39,834 in September to £39,983 in December. This has meant that the average HTB2 homebuyer’s primary salary in December was £12,000 lower than the purchase market average. Read more on the Housing Excellence website.