We Buy UK Houses

Help-to-buy delays leave borrowers unable to sell or remortgage and paying more

A scheme that was meant to be the first step on the housing ladder has now turned into a nightmare for some.

Since Homes England switched contractors, borrowers have been struggling to obtain vital documents
Hilary Osborne

Hilary Osborne Mon 18 Sep 2023 10.28 BST

Juan Peña is “feeling a bit hopeless” after months of dealing with Homes England, the government body that ran the help-to-buy loan scheme. The doctor used one of the loans to purchase a flat with his friend, whom he is now trying to buy out. Although he started the process in April, when there was four months on his mortgage deal left, a series of delays have resulted in time running out and him being switched to a much higher rate.

“It has gone up to 8.49% and payments are now taking up all of my salary,” he says. “I’m drawing on savings that I have worked to build up.”

Peña is one of more than 380,000 people who bought a property using help to buy before the scheme closed last October. They are secured against the property, are interest-free for the first five years, and must be paid off when the property is sold.

Borrowers are allowed to remortgage, but to do so they need to get paperwork telling their new lender that it has priority over the government if the home is ever repossessed. Now a behind-the-scenes change in the scheme’s administrator has caused huge delays in getting hold of that vital paperwork.

While the agency in charge remains Homes England, in June the back-office administration for the loans was switched from a firm called Target to another company, Lenvi. Borrowers were not told about the switch – they still call a number for Homes England – and, if things had gone smoothly, they might have remained unaware that it had happened.

But things have not gone smoothly. Borrowers are finding they are paying extra on their mortgages, stuck in homes they no longer want to live in, and feeling stressed and hopeless.

Advert for the help to buy scheme with the headline ‘Help to buy your dream home’

The promise of a dream home is turning into something else for people who are trying to refinance or sell.

The promise of a dream home is turning into something else for people who are trying to refinance or sell.

Earlier in the summer, as the problems first emerged, Homes England said no paperwork had been lost and that it was putting on extra call centre staff. However, in August, about a week after his old rate expired, Peña’s solicitor received an email asking him to resubmit everything from his application form to his payslips.

“Due to the transition from Target some of the documents have not been correctly transferred to customer accounts as we have experienced a data migration issue,” the email explained.

Another borrower, who does not want to be named because he does not want his chain to collapse, says in August he was asked to resubmit a form he had sent five months earlier.

He has been trying to pay off his help-to-buy loan since March, and despite transferring the money in June, is still waiting for it to be signed off. In the meantime, he is worried the sale of his flat will be threatened. “I am panicked and scared,” he says. “We have found our dream house and we will be gutted if it falls through. And I don’t want to let the chain down.”

Anna Jones* says dealing with the scheme has been “a nightmare”. She and her ex-partner own a flat in London together that they bought using help to buy. When they split earlier this year, they decided that he would buy her out, which meant they needed paperwork to take her off the loan and let him borrow the extra money he needed.

She first contacted Homes England in May. “It said it would take four to six weeks,” she says. “I put in an offer on a flat and expected it all to go through.” Instead, four months later, she is still living with her former partner, despite regular calls to chase up the paperwork.

“Every time you ring you have to talk them through the same thing – there’s no case management,” she says. “Every person you speak to seems to think the process is slightly different.” She says she hears the hold music in her sleep, and her solicitor has lost patience with the process.

It feels Kafkaesque. First of all you wait forever, then you get through to someone and they put you on hold
Juan Peña, homebuyer

During a call last week she was told the deeds had been sent for sealing, but vital paperwork had been missed out so they had to be sent again – and that this would add another six to eight weeks to the process. She worried her mortgage offer would run out and her purchase would fall through.

Last week, after the Observer contacted Homes England with details of her case, the deeds were sent back and the end is in sight.

She says: “No one at Lenvi, or within Home England, seems to care or grasp the detriment they are causing to people’s lives. The homebuying process is stressful enough, but this is catastrophic.”

Neither Homes England nor Lenvi would respond to individual cases.

Homes England says customers with a completion date, or mortgage offer due to expire in the next seven days, should call customer service and those most in need will be prioritised. It adds that anyone who wants to make a complaint can do so online.

“We apologise to customers who have experienced long response times during a period of very high demand,” it says. “We are working closely with our supplier to resolve this, and have introduced extra staff, extended working hours and new technology, all of which are taking effect – our average call wait time is now approximately seven minutes. We continue to monitor this closely.”

Lenvi says current mortgage market conditions and interest-rate rises had led to an increase in customer demand for the help-to-buy service: “We experienced four times the average volume of incoming inquiries when we took over the administration in June, during which time all customer information was successfully transferred. We have since extended our working hours and increased staff levels. All staff are extensively trained due to the complex nature of customer inquiries.

“While we inherited a significant number of complex cases, this backlog has reduced significantly, and we are seeing a continued reduction in call volumes. We remain on track to complete significantly more cases.”

Peña is still trying to get his remortgage sorted out, and his mental health is suffering as time goes on. “It really feels Kafkaesque,” he says. “First of all you are waiting for ever, then you get through to someone and then they put you on hold while they are getting acquainted with what’s going on. Then they give you different information. I am no closer to getting this sorted than I was in April.”

* Name has been changed

Content retrieved from: https://www.theguardian.com/money/2023/sep/18/help-to-buy-delays-leave-sellers-and-remortgagors-stuck-and-paying-more.

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