The Help to Buy equity loan scheme should be extended by at least 12 months due to the crisis caused by Covid-19.
That is according to Kate Davies, executive director of the Intermediary Mortgage Lenders Association, who has made the case to the government in meetings and in a letter to the secretary of state.
The government has made plans to extend the scheme past the current end date of April 2021.
Davies said: “IMLA has been working closely with the Ministry of Housing, Communities and Local Government to share the perceptions and experiences of its lender members on the housing market.
“These regular meetings have included discussions around the future of the Help to Buy equity loan scheme, which we believe should be extended by at least 12 months beyond its currently proposed phase out in April 2021.
“IMLA has also written to the secretary of state this week seeking his support for an extension of the current scheme.”
Figures from the Home Builders Federation have suggested around 18,400 sales via Help to Buy could be at risk from such construction delays. Of those, an estimated 7,700 transactions totalling £2.4 billion will not be eligible for the new phase of the scheme starting in April, which as it stands it would be restricted to first-time buyers.
Davies added: “We understand that the scheme has not been without its critics. Many in the housing market pre-coronavirus crisis – including lenders – had generally agreed that the Help to Buy scheme had run its course and the time had come to develop alternatives. However, COVID-19 has caused severe disruption to the market.
“Any consideration of new schemes has been side-lined while firms have worked to protect existing customers.
“Pre-planned construction projects have also been significantly delayed – leaving customers who were relying on the Help to Buy scheme to purchase their new-build properties to feel as if this could be taken away by a somewhat arbitrary deadline.”
This post has originally been featured in Property Wire.