MortgagesJun 2 2015

Broker predicts Help to Buy remortgaging trend

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Broker predicts Help to Buy remortgaging trend

More lenders are likely to enter the remortgage market for Help to Buy, a broker has predicted, stating that more people will be looking for deals as the first round of Help to Buy cases which took on two-year fixed rates begin to conclude.

Ray Boulger, senior technical manager at mortgage broker John Charcol, noted that the first Help to Buy cases on two-year deals will be nearing an end shortly, so many borrowers who took a two-year fix are likely to be looking for another deal.

“Now is the time one might expect other lenders to start offering a remortgage and/or product transfer option; I therefore suspect this will be a trend.”

In March, Leeds Building Society claimed to be the first lender in the market to accept remortgage applications from Help to Buy equity borrowers.

Last month, Teachers Building Society followed in Leeds Building Society’s footsteps by making Help to Buy mortgages available for remortgage as well as home purchase.

Halifax and Lloyds Bank also both offer remortgages to Help to Buy customers looking to switch, with a 2.04 per cent deal at 75 per cent loan-to-value. A spokesman for the group added that both Halifax and Lloyds also offer shared equity and shared ownership products.

“We announced a pause on remortgages last year because we were seeing an increase in market share; we re-entered this market on 3 March 2015.”

At the end of last week, Teachers also made its shared ownership mortgage available for remortgage as well as home purchase.

Martin Richardson, Leeds Building Society’s general manager for business development, told FTAdviser that following the government announcing it will widen the existing Right to Buy Scheme to cover shared ownership tenants, this could mean more lending to this sector.

“Shared ownership property offers an alternative affordable housing option to those consumers who desire to purchase their own home, but perhaps do not currently have sufficient earnings or deposit to purchase the whole property outright.

“As part of a well-functioning housing market, shared ownership provides a welcome facility to allow home ownership on a more affordable basis.”

However, Mr Boulger pointed out that shared ownership remortgages are still a very niche market, with the only other lender in the shared ownership remortgage market being Monmouthshire Building Society, but only in Wales.

peter.walker@ft.com