Help to Buy has taken a hit as Lloyd’s Banking Group has severely restricted the amount that people can borrow from them through the scheme.
People will now only be able to borrow £150,000 from Lloyd’s Bank and the Halifax whereas previously, the scheme was available for properties valued up to £600,000.
Approximately half of the loans taken out under Chancellor George Osborne’s flagship scheme have been offered through the state backed bank, but this is likely to change now that they have changed their lending criteria.
85% of applicants of the Help to Buy scheme are first time buyers, and it is these who will get hit the hardest as there is now less chance of them getting onto the property ladder.
However, the restriction only applies to the first phase of the scheme and the Help to Buy Mortgage Guarantee should still be available.
“We remain committed to supporting the affordable housing sector and new build market, recently extending our Help to Buy Mortgage Guarantee Scheme to allow applications for those with a 5 per cent deposit on new build properties,” said a spokesperson for the bank.
After recent regulations that have put restrictions on acquiring mortgages, and a report from the charity Shelter that has highlighted that almost two million young people in the UK can’t afford to move out of their parent’s house, this is further bad news for those trying to get onto the property market.