Mortgages  

Advisers ‘need to be well versed’ in Help to Buy alternatives

Some brokers have also shared their concerns borrowers will not be able to pay off their Help to Buy loans against a backdrop of rising rates and a living cost crisis.

Other proposed reforms made by IPFA included:

  • An increase in the number of homes being built through the government’s affordable housing schemes;
  • New laws which would limit the proportion of shared ownership homes that can be ‘staircased’ up to 100 per cent ownership, to reduce the number which leave the scheme;
  • Advisers should raise awareness of ‘intergenerational mortgage’ products, currently offered by a small handful of firms such as Aviva-backed broker Tembo;
  • Financial Conduct Authority to address “issue of advice silos” making it difficult for one adviser to advise on both residential and equity release mortgages;
  • More lenders to offer split term mortgage which allow a borrower to save for their deposit after they’ve moved into their first home;
  • Explore the idea of ‘low-start’ mortgages which would combine capital and interest-only borrowing which would help buyers with affordability, reducing the portion on interest-only as the borrower’s earnings increase.

The founding members of IPFA include advisory firms Aberdein Considine, Acumen, CMME, EasyLife Alliance, Fairstone, Instant Mortgages, Mortgage Required, New Leaf and Private Finance.

The body has been set up, it said, to “shine a light” on the issues facing first-time buyers and propose solutions the industry, government and regulators can implement to solve them.

ruby.hinchliffe@ft.com