Help to Buy
The Help to Buy scheme, set up to make it easier to get on the housing ladder, but now it is proving difficult for some people involved in the scheme to sell or re-mortgage their property.
The house buying, selling and re-mortgage process requires a lot of very important pieces, falling into place.
But, as many are discovering, fail to get your building blocks in exactly the right place at the right time, and all of your plans could come crashing down.
The Help to Buy scheme was set up in 2013 to assist mainly first-time buyers onto the housing ladder by providing a 5 year interest free loan for the deposit on the property.
Homes England is the government department that runs it.
School teacher Sophie has been part of the Help to Buy scheme since 2021.
Sophie told us “It was quite difficult for us to get the deposit together and get all the money that we needed. So, we were grateful for the Help to Buy scheme. We are now trying to re-mortgage.”
“We needed a document called the deed of postponement.” said Sophie.
This document was critical to ensuring she was able to take out a new mortgage at a competitive rate. But it wasn’t forthcoming.
“It got to the third of July when we were due to re mortgage, and we still didn't have this piece of paper, so our mortgage rate has nearly doubled.” Sophie told Watchdog.
Homes England handed the administration of the scheme to a company called Target, but as of June 16th 2023 another company Lenvi has been in charge.
But getting through to Lenvi for an update on her missing documents has left Sophie feeling even more frustrated.
Sophie told Watchdog: “The hardest part was for them to tell us it will be six weeks. We have no control over this. We just want some answers.”
The whole situation was recently debated in Parliament with Tory MP Richard Fuller in July 2023 saying that the transfer from Target to Lenvi had been handled extremely poorly. He said:
“Re-mortgaging can be a time-sensitive matter. So can the leader advise me what steps I can do to raise the importance of this matter with the relevant department.”
John took out a Help to Buy loan in 2017 and this year wanted to pay it back in full so he could sell his house. He requested paperwork for this to happen.
John told us: “I need to pay off my loan…it should be a very straight forward process."
"So, the document we were waiting for was called a Redemption Statement, which is basically how much money you owe. We were told we would have a redemption figure within 7 days.” Said John.
“So, from the…may to the end of June, we had nothing, It's like you’re just on the phone for hours and hours… It's just ridiculous.” Said John.
John’s house documents finally arrived in July, but by then his first buyer had pulled out. With a second buyer now waiting to complete John needed further paperwork from Lenvi which also hasn’t arrived!
He told us “We could lose the buyer.”
“until you exchange contracts, you're not legally obliged to buy this property.” John said.
Mortgage specialist Nicola McKenzie has been monitoring the situation and commented that she expected Lenvi to administer the scheme more efficiently than it is. Additionally she stated:
“I would expect to see Homes England working closely with Lenvi to rectify this situation as soon as possible. Because it's just completely unfair on borrowers where they're seeing even higher mortgage payments.”
In response, a Homes England Spokesperson said:
“We are pleased that both customers you reference in this piece had their cases resolved earlier this summer. We would like to sincerely apologise to them and others who were impacted by a very high level of demand in July and early August.
“Our average call time is now approximately seven minutes and continues to fall. Additional staff and new technology means our service has substantially improved, helping to ensure customers are not experiencing the issues reported in your film. We continue to monitor this closely and will take further action if needed.”
Richard Carter, CEO, Lenvi said:
“We took over the administration of the Help to Buy scheme on 19th June 2023, and upon switchover, inherited a significant number of complex cases in progress. Current mortgage market conditions and interest-rate rises led to an increase in customer demand for the Help to Buy Service, and we experienced four times the average volume of incoming enquiries.
“As we continue to prioritise customers in order of completion date, not all incoming enquiries are quick to resolve. Complex cases can also involve issues like valuation reviews, which take time to process. As a result of the increase in demand, the volume of house transactions and requests for ATCs and redemption statements are significantly higher than projected, which require feedback from external parties including conveyancers.
“We are working closely with Homes England to ensure all customers are supported, having extended our working hours and increased staff levels to further support this increase in demand. We are working though the complex backlog of cases, and remain on track to complete significantly more cases than Help to Buy have experienced previously, since we have been managing the service.”
A Target Group Spokesperson said:
“We are committed to ensuring the best possible outcomes for customers and clients, so we are disappointed to hear that some people have been adversely affected by delays to their mortgage redemptions.
“In October 2021 another administration servicer was appointed by Homes England to handle those enquiries. Since this new appointment we have been engaged in a process with Homes England to ensure a smooth transition of customer data and ongoing customer enquiries.
“Regretfully, this transfer of service may have contributed to delays in a small number of cases. As of the 16th June 2023 Target is no longer the point of contact for Homes England customers.
“During our seven years working with Homes England we managed over 250,000 customers, all of whom we have strived to deliver an excellent service to.
“We are disappointed that the cases you have highlighted didn’t share that experience and will ensure we review in detail what has happened at our end of that process so we can improve things moving forward.”
