Life after Help to Buy

Simon Tipton
Intermediary Development Manager - Skipton Building Society

The Help to Buy (HTB) scheme is set to change from next year (bringing in exclusivity to first time buyers and the introduction of regional price caps) and end completely in 2023. So, what's next for the industry which has had government backed equity schemes in place for over 15 years?

The HTB scheme has supported home ownership for going on 250,000 transactions. And while there's no silver bullet answer to support home ownership and new builds, it's important for the industry to start planning ahead with alternative solutions.

Whatever the resolution, the government's challenging supply targets require it to be accessible to customers. Come 2023, there will be a £23 billion shortfall in lending when the scheme closes.

There's a number of potential solutions: Private shared equity, increased Shared Ownership, more options on family assist and later life lending, discounted purchase schemes, more options at 95% for new build... the list goes on.

With so many options, the value of the broker and their advice becomes more important than ever.

At Skipton, we're still very supportive of HTB, where we offer purchase (9+3 month offers) and remortgage products with 6 months offers. In 2019, we also launches Additional Borrowing for brokers on our online system to allow for 100% staircasing of existing HTB customers.

But we've also started to think ahead about alternative options. Last year, we launches 95% Shared Ownership, a clear section 106 lending criteria and Joint Borrows Sole Proprietor (information below) which are all key in supporting New Build now and after HTB has ended.

Joint Borrower, Sole Proprietor

In Q4 2019 Skipton Intermediaries launched their new Joint Borrower, Sole Proprietor proposition. Here's what you need to know:

  • No minimum income
  • Applicants do not have to be related
  • Can go up to 95% LTV (as per usual criteria)
  • Deposit can come from any of the applicants
  • Will accept up to 4 applicants and use all 4 incomes
  • No restrictions on the ratio of borrowers to proprietors
  • Mandatory for all non-proprietors to seek independent legal advice
  • Acceptable on Interest Only (non-proprietors residential cannot be repayment vehicle)
  • Residential lending only, no specialist lending (Help to Buy, Right to Buy, Shared Ownership etc).

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