Help to Buy - Comment from Paul Winter
Paul Winter, Chief Executive, Ipswich Building Society, comments on David Cameron's "Help to Buy" statement and highlights research from the BSA* that demonstrates real confusion around the scheme:
"The 'Help to Buy Scheme' is a mechanic of the Government to make banks who had stopped lending because of their previous poor practices enter the higher loan to value space. Unlike many of the large lenders we've been offering 95% loan-to-value mortgages for years as part of our standard mortgage range without the need for a taxpayer-backed guarantee on borrower defaults. Last year over 13% of our total lending was to first time buyers through our standard 95% LTV mortgage, it seems that when it comes to doing anything to assist society or our economy banks need the taxpayer to take the strain whilst building societies just get on with it!"
"I would urge consumers to do their research and not make any assumptions that the scheme will protect their mortgage payments or make it easier for them to gain a mortgage. Speak to a mortgage broker and seek proper advice before making your decision."
*Independent consumer survey commissioned by the Building Societies Association (BSA) details that nearly half (43%) of first time buyers and home movers are confused about the benefits offered and nearly a third (31%) admitted they don't know whether there's a difference between a 95% mortgage from a lender who's signed up to the scheme and a lender who hasn't.