Although the availability of high-LTV products is currently limited, this is partially a symptom of lender capacity to service demand from customers while still maintaining strong service levels, experts say.

The new Help to Buy: Equity Loan scheme will run from 1 April 2021 to 31 March 2023, but what impact will the changes have on the market? How beneficial will the new scheme be when there is still a lack of high-LTV products?

The main changes from the previous scheme are:

• Open to first-time buyers only
• Regional price caps instead of £600,000 maximum property value
• Changes to equity loan interest fee. From year six, interest fees start at 1.75 per cent and rise each year in April by the Consumer Prices Index plus 2 per cent (previously Retail Price Index plus 1 per cent).

Leeds Building Society director of products Matt Bartle points out the limited availability of high-LTV products is partially a symptom of lender capacity, and he believes the reduction in scope of HTB is an acknowledgement it is FTBs who are most in need of support.

He says: “Restricting the scheme to FTBs only, with a reduction in price caps, helps to focus it on arguably the original target users: people who truly need help accessing the first rung of the ladder, rather than homebuyers moving up the ladder or skipping the ‘traditional’ first step and buying a property based on future, rather than current, needs. It’s important to note that most users of HTB are FTBs (80 per cent).”

Alexander Hall director of lender relationships and new homes Greg Cunnington says: “We have seen a lot of demand for HTB in recent months, in particular from FTBs. So the new scheme continuation of HTB is great because it will continue to help the majority of these applicants.

“There is no doubt that the lack of high-LTV mortgage availability has been a factor here, as clients who have saved and put huge efforts into getting 5 per cent or 10 per cent deposits strive to get onto the property ladder.”

Accord Mortgages corporate account manager – proposition development Nicola Alvarez says: “The new HTB offering will continue to offer much needed support for FTBs but, for homemovers who are ineligible for the new scheme, advice will be needed more than ever.

“With only a limited number of lenders offering higher-LTV products, more innovative solutions need to be explored and, while they do exist, public awareness is low. Brokers have a great opportunity to demonstrate the value they can give by highlighting alternatives such as shared ownership, family assist mortgages, joint borrower/sole proprietor and gifted deposits, to name but a few.”

IMS Independent Mortgage Solutions chief executive Michelle Niziol says the change to HTB will affect new-build developers and homemovers.

He says: “The criticism has been that HTB serves to boost prices, so it was perhaps little surprise to see the new scheme withdrawn from homemovers to become the sole preserve of FTBs from next year.