It is thought by some in the industry that the Help to Buy scheme is likely to become a permanent fixture of the housing market.
Originally only meant to be a kick-starter to stimulate the housing economy and to get people buying, selling and building homes, the scheme has already been extended four years past its intended end to 2020.
The banks, however, are still reluctant to offer 95% loan to value mortgages. A senior executive of a leading house building firm is reported to have said that “the banks are still not interested in offering mortgages of more than 80% loan-to-value in new build homes and that leaves a big gap which only the government seems likely to fill any time soon.”
Nationwide has previously restricted access to Help to Buy, offering it only to first time buyers, indicating a possible separation from the scheme. However, it has recently decided to again open itself up to the market of house movers and allow them to use the scheme.
With such a reliance on the Help to Buy scheme throughout the country, it is hard to see a housing market that doesn’t rely on it, unless the banks are willing to risk more money and offer lower deposits, which currently seems to be fairly unlikely.