Nearly 2,000 Help to Buy customers in arrears
This was in response to a written question John Healey, shadow secretary of state for housing, put to the Ministry of Housing Communities and Local Government.
Housing minister Esther McVey said the total interest fee of arrears amounted to £189,000 at the end of November 2019, representing 2.7% of the total amounts charged to customers’ accounts.
McVey attributed the arrears to administrative errors.
“The large majority of customers in arrears are only one or two payments behind and this debt very largely reflects short-term administrative issues with direct debit set-up at the start of the interest fee paying period,” she said.
The region with the most Help to Buy customers in arrears was the North West with 352, followed by 270 in the South East.
There were 241 in Yorkshire and Humber, 230 in the West Midlands, 221 in the East Midlands and 210 in the East of England.
The fewest arrears were found in the North East, where there were 174 and London with 103.
Help to Buy: Equity Loan scheme – progress review report by the National Audit Office (NAO) released in June 2019, found 739 households had fallen into arrears as of February 2019 which Homes England had again attributed to administrative issues.
At the time, this represented five per cent of those who had taken out a Help to Buy equity loan.
NAO’s report found that these homeowners had fallen behind with payments because the processes to collect interest were not set up when the loan was issued, and customers had not responded to contact from Target, the scheme’s loan administrator.
Homes England said this was because Target had incomplete or out of date contact details for the buyers.
At the time, arrears totalled £54,000, which was around four per cent of the £1.5m due.
Sister site, Mortgage Solutions has contacted Target for comment.