Specialist lenders can also offer Help to Buy

In the eyes of many industry commentators and members of the opposition, the Help to Buy scheme sits somewhere between being the Governments greatest achievement within the housing market, and a potential reason why many house builders and the new build sector could crumble like a house of cards in the future.

I’m focusing on the more dramatic end of the opinion spectrum here and with the end of the scheme inching ever closer, I expect it to generate even more views and headlines before it is gradually phased out.

The latest figures from the Ministry of Housing, Communities and Local Government showed that:

•     - Over the period since the launch of the Help to Buy: Equity Loan scheme (1 April 2013 to 31 December 2018), 210,964 properties were bought with an equity loan.

•     - The total value of these equity loans was £11.71 billion, with the value of the properties sold under the scheme totalling £54.48 billion.

•     - Most of the home purchases in the Help to Buy: Equity Loan scheme were made by first-time buyers, accounting for 171,053 (81 per cent) of total purchases.

•     - The mean purchase price of a property bought under the scheme was £258,223, with buyers using a mean equity loan of £55,498.

These figures highlight how invaluable this initiative has been for many home buyers since its introduction, and how the take-up is unlikely to slow-down anytime soon.

Help to Buy has benefitted from an increased profile in recent times and this has helped more FTBs recognise its attributes – which is a good thing - although it’s prudent to point out that it should not be considered an all in-compassing solution. And, on the flip side, despite this rise in lending prominence there are still pockets within the market where it can prove valuable for a certain type of borrower which often goes overlooked.

I believe this type of product is seen by most borrowers, as being one which sits squarely in the domain of mainstream or high-street lenders. Meaning the role of specialist lenders can often go ignored, which is a shame. There are specialist lenders who can provide Help to Buy solutions for borrowers with an adverse credit history, IVA’s or even bankruptcy issues, and this is an important part of the scheme which we tend to hear very little noise around (T&Cs obviously apply!).

The specialists might not be applicable for everyone, and still form a small proportion of the overall lending figures, but they should be playing a bigger role in supporting more credit impaired borrowers get a foot on the property ladder for the first time or even back onto it after falling off.

Lending to those over 70yrs old is not a new thing for AToM!

Rates continue to tumble as the cost of funds remains low and lenders fight to attract your custom. During the last seven days, we have witnessed Halifax reduce some rates by up to 0.30% and Coventry Building Society reduce some of theirs by 0.20%.  Other lenders have reviewed their criteria.  For example, Kensington Mortgages will now consider 100% of a customers annual bonus when it comes to working out affordability (most lenders will only look at 50% of non guaranteed income).  New  lender, Bluestone Mortgages, have reviewed their criteria and will now accept contract workers who only have three months remaining on their contract (normally six months).  In the main, lenders are making positive changes to increase their market share.  Even if you have something you think is 'out of the ordinary' or 'impossible', do explore your options as there might be a lender out there who will assist.
 This does not exclude age either!  Many think that you cannot have a mortgage over the age of 70.  And, on the high street, this may still remain true in some cases as these lenders generally allow a mortgage term to last until the applicants retirement age.  This used to be 65, officially it's now 67, but the reality is it can be much later.  Most lenders increased their maximum age at the end of mortgage maturity to age 70.  However, we all know that people are working a lot longer now and repayment of such a large amount of money may not be possible in these restrictive conditions.  So the option is to raise further finance to repay the original loan or sell the property.  Thankfully, the first option is less onerous as it used to be.  Many non household named lenders will look at lending to customers to a lot later in life, assuming the customers can prove their continued ability to pay.   This can take the maturity age up to age 80, 85 or even 90 and above.  If the customer has a good and regular amount of income, a high level of equity in the property and can satisfy the lenders affordability requirements, then some lenders will be happy to lend.  Seek specialist advice from someone who offers a range of lenders from the 'whole of market', not just a restricted panel or the high street.