You are here: Home - Mortgages - First Time Buyer - News -

Nearly 2,000 Help to Buy customers in arrears

0
Written by: Shekina Tuahene
13/02/2020
Some 1,983 Help to Buy customers, 5.8% who are due to pay interest fees on equity loans, were behind in payments as of November 2019, the government has confirmed.

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.

Ongoing problem

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Homes England said this was because Target had incomplete or out of date contact details for the buyers.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.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Six little-known shares to tap into the sustainable investing theme

Sustainable investing has come to the fore as investors hunt for profits from companies producing products to help the environment....

Close