Research by Mortgage Advice Bureau found more than a third (38%) of would-be buyers had no knowledge of the government’s flagship mortgage guarantee scheme while 42% did not know of the Help to Buy equity loan scheme which has been active since April 2013.
Consumers are also confused over who is eligible for the scheme with 17% believing only first-time buyers can take part while a further 17% have refrained from applying as they believe they won’t be eligible.
The study also highlighted misunderstandings about which lenders took part in the Help to Buy scheme. Halifax and NatWest were the brands most commonly associated with the scheme but 8% of borrowers thought the Co-operative Bank took part despite offering no Help to Buy products, more than actual participants Royal Bank of Scotland, Aldermore and Virgin Money.
Brian Murphy, head of lending at Mortgage Advice Bureau, said: “Lenders are steadily warming to the Help to Buy mortgage guarantee scheme, with both high street brands and ‘challenger’ banks announcing their participation over the past few months.
“More choice is undoubtedly a positive for anyone looking to buy property. But while consumer demand for mortgages is high and plenty are keen for financial assistance, many are in danger of missing out and are being let down by a lack of knowledge of the available options.
“Common misconceptions such as the belief that Help to Buy is only for first-time buyers could hold others back from securing a mortgage to move house and potentially free up more properties for those looking to join the ladder. Qualified advice can ensure you don’t get lost in the detail or miss out on the chance to take full advantage of the scheme, especially as the product range increases throughout 2014.”
