Help to buy ‘does nothing’ for over-65s

Representatives from McCarthy and Stone have written to the Communities and Local Government department to complain that the help to buy scheme, which was announced in chancellor George Osborne’s Budget in March, excludes people over the age of 65.

The £3.5 billion scheme - which provides equity loans of up to 20 per cent of new build properties worth less than £600,000 to people with 5 per cent deposits - is technically open to anyone.

However, guidance documents published by the government stipulate that all purchasers under help to buy must apply for a mortgage.

McCarthy and Stone, which built around 1,370 retirement properties last year, says that because mortgage lenders will not give mortgages to older people due to the risk they may die before the debt is repaid, the scheme effectively excludes anyone who is not of working age.

The company warned that the scheme won’t help older people who either do not need to obtain a mortgage because they have built up equity in their home, or are unable to borrow because of their age, but can’t afford to buy a new, more appropriate home without support.

It argues the scheme should be amended to allow purchasers of retirement properties to apply for an equity loan without the need for a mortgage.

This, the company claims, would allow older people to downsize and reduce the impact on health and social care budgets, and also free up larger family housing.

‘Once again, retirement housing and older people have been excluded from a key government initiative,’ McCarthy and Stone’s letter to the CLG said.

Paul Teverson, head of public affairs and public relations at McCarthy and Stone, said the CLG is ‘not minded to amend the scheme’.

‘What the CLG has recommended is that we look at a government shared ownership scheme, but we’d have to become a registered provider to do that,’ he added. The company has no plans to do this, Mr Teverson said.

Other developers such as Taylor Wimpey and Barratt have reported a huge surge of interest in buying homes since the help to buy scheme was launched. Housing association Orbit, the largest help to buy agent, said it is recruiting extra staff to meet demand.

The CLG was unavailable for comment.