The two-part Help to Buy scheme was announced 12 months ago in Chancellor George Osborne’s Budget and has been credited with a rise in consumer confidence by brokers and lenders, the survey found.
Exactly half of mortgage brokers and a similar amount of lender respondents (46%) expect the scheme will be axed before the end of its three year term. A greater proportion of those surveyed expected the scheme would be withdrawn early for remortgages, although most lenders are not offering this option at present anyway.
The research found more than two-thirds (69%) of lenders feel the scheme is artificially inflating house prices with 57% of mortgage advisers sharing this fear.
Brokers also have concerns over the pricing of the mortgage scheme with 51% fearing the pricing of the government-backed mortgages will cause the scheme’s downfall.
While the industry has doubts over the mortgage guarantee scheme reaching the end of its intended life lenders and brokers are more positive about the equity loan being extended beyond March 2016. A quarter of lenders (23%) and 18% of mortgage brokers expect the government to extend this scheme.
IMLA executive director Peter Williams said: “These findings throw the spotlight on crucial policy decisions that must be thought through to safeguard the recovery in mortgage lending and house building. The overall Help to Buy scheme has delivered a much needed boost over the last twelve months and we would certainly be looking at a more subdued supply situation without it.
“In particular, Help to Buy 2 has helped to reopen the higher LTV market after the downturn. This has done much to transform the hopes of first time buyers who can afford a mortgage but struggle to save an initial deposit. There are few clearer drivers for more homes to be built than aspiring buyers returning to the market.
“However, situations change and the industry is facing a considerable uplift in regulatory controls over the next two years. It will be essential to track how those bed in and what their consequences are for specific market segments. Armed with that understanding we can then be much clearer as to how and when we might best phase out the government schemes.”