Mortgage Advice Bureau has reported that the early launch of the Help to Buy mortgage guarantee has seen it overtake Help to Buy equity loans in terms of public awareness.
It found that 37% of adults had heard of the equity loan scheme back in September, compared with 32% for the mortgage guarantee. Since then awareness of Help to Buy’s second phase has increased to 43% following its launch in October, while the level of recognition for the equity loan scheme has remained the same.
The awareness gap is even more pronounced among people looking to get a new mortgage in the next year, with the guarantee enjoying 52% awareness compared with 41% for equity loans.
Help to Buy equity loans are available exclusively for new build properties, while the guarantee supports mortgages of up to 95% on either new build or existing homes.
Andy Frankish, new homes director at Mortgage Advice Bureau (MAB), said: “The Help to Buy mortgage guarantee has enjoyed the lion’s share of attention in recent months, but let’s not forget the equity loan scheme has made a great first impression with arguably the biggest initial impact of any government housing scheme in recent memory. The arrival of the guarantee now means buyers have two government-assisted routes to help them secure a mortgage on a newly built home.
“Buying a new home with an equity loan is certainly a different proposition to a 95% mortgage and calls for specialist advice, which is why MAB refers all interested parties to its dedicated brokers who deal exclusively with new homes. What we have seen in its first six months is that the equity loan scheme has made new properties affordable to thousands of people at very competitive rates, giving homebuyers extra incentive to consider the benefits of ‘buying new’.
“The construction industry is primed for a return to growth thanks to Help to Buy, and what’s needed now is lenders’ continuing support for the new build sector up to 2016 and beyond. This will be vital to sustain the appeal of new builds, support the construction recovery and give Britain the new homes it needs to satisfy homeowning ambitions.”
