Survey Finds First Time Buyers Being Left Confused By The "Help to Buy" Scheme

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11th November 2013 12:18 - Housing

A new study carried out by the Building Societies Association (BSA) has been revealed that two fifths (43%) of first time buyers and other home movers are confused about the benefits that the government’s flagship ‘Help to Buy’ mortgage scheme will give them.  The same survey revealed that a third (31%) of people looking to buy or move home don’t know the differences between a 95% mortgage offered by a lender who has signed up to the scheme and a 95% mortgage from a lender who hasn’t.

The results from the study show even more confusion surrounding how much money home movers and first time buyers think they can borrow. A fifth (18%) of first time buyers believe that they can borrow more through the scheme than with a standard 95% - seventeen per cent of home movers also believe the same.

Furthermore, it has been revealed that a tenth (12%) of both first time buyers and home movers think their monthly repayments will be lower as a result of taking a ‘Help to Buy’ mortgage. One in ten first time buyers believe the scheme protects them if they cannot keep up with their monthly payments with five per cent of home movers thinking the same.

The research also shows confusion surrounding the guarantees the scheme offers with a tenth (12%) of first time buyers believing that the scheme protects them if their house prices falls, five per cent of home owners also believe this to be the case.

However, none of these assumptions are correct; the ‘Help to Buy’ scheme is designed to encourage more lenders to lend to borrowers with small deposits, thereby increasing consumer confidence and helping get more people on the housing ladder.

Paul Broadhead, Head Of Mortgage Policy At BSA, said:

It’s unsurprising that some consumers are finding the Help to Buy Mortgage Guarantee Scheme difficult to get their heads round. The situation has been complicated by the launch of two very different schemes both called Help to Buy. It is essential that providers offering loans under the scheme leave applicants in no doubt about the terms of their mortgage loan.”

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