The government’s new Help to Buy scheme has encouraged many new buyers to step into the property market. Rising house demand in the UK could be a direct result of the flagship programme, as many now look to get onto the property ladder for the first time.
However, a recent survey has revealed that many new buyers do not actually understand what Help to Buy offers them.
The research, commissioned by the Building Societies Association (BSA), showed that 43 per cent of respondents were confused over the scheme’s benefits.
A further 31 per cent of buyers stated that they did not understand the difference between a registered Help to Buy mortgage provider and a one that was not taking part in the scheme.
Results from the survey also highlighted a number of misconceptions over what Help to Buy actually offered first time buyers and movers.
One in four believed that by using the scheme they had a better chance of obtaining approval for a Help to Buy mortgage programme.
Some consumers thought that through using the scheme they would, in fact, be able to borrow more. Others believed their mortgage payments would be lower as a result of Help to Buy.
Help to Buy looks to encourage mortgage lenders to provide first time buyers with loans which require lower deposits.
“It is essential that providers offering loans under the scheme leave applicants in no doubt about the terms of their mortgage loan,” said Paul Broadhead, BSA head of mortgage policy.
He went onto say: “I am particularly concerned that a reasonable minority of active first time buyers believe that they can borrow more than normal and that they are in some way protected yet neither assumption is true.”
These findings could suggest that more information should be provided to those looking to use the Help to Buy scheme.
Despite the influx of new buyer in the market, areas such as London are still seeing a rise in people who are looking to rent, which is good news for those looking to purchase landlord insurance.