Sadiq Khan Seeks Support To Help For homeowners

London Homeowners Facing Financial Squeeze Due to Help to Buy Scheme

Introduction: London’s mayor has expressed concern over rising housing costs for the city’s homeowners, particularly those who utilized the Help to Buy scheme. According to a new analysis from City Hall, up to 4,500 London homeowners with Help to Buy loans are feeling the financial strain as higher mortgage interest rates and Help to Buy loan repayments converge when interest-free grace periods conclude.

Homeowner Struggles: The analysis indicates that many first-time buyers who purchased their homes through Help to Buy in 2017/18 may see their monthly payments increase significantly. This could translate to an extra £900 per month, comprising £638 in higher mortgage interest payments and £275 in additional Help to Buy payments to the government.

Call for Government Action: London Mayor Sadiq Khan has called on the government to consider extending the interest-free grace period to provide relief for struggling homeowners. He emphasized that many Londoners using Help to Buy are on low incomes and facing economic insecurity, making the situation even more challenging.

Government Response: In response, a spokesperson from the Department for Levelling Up, Housing and Communities stated that supporting homeowners is a government priority. They pointed out that options are available to assist Help to Buy customers facing financial hardship. The Help to Buy equity loan remains interest-free for the first five years, with a monthly interest fee of 1.75 percent of the loan payable thereafter, a rate lower than current mortgage products.

Additional Requests: This call for a freeze on Help to Buy loan repayments is just one of several requests from Mayor Khan concerning London’s mortgage crisis. He has previously urged the government to reverse cuts to support for mortgage interest and allow homeowners in significant difficulty to switch to affordable rented or shared equity housing to enable them to stay in their homes.

Conclusion: The financial strain facing London homeowners, especially those who used the Help to Buy scheme, is a growing concern for policymakers and city officials. Mayor Khan’s call for government support highlights the challenges many individuals are facing as they grapple with increased housing costs and economic uncertainty.

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