Young homeowners are being forced on to sky-high mortgage rates and their house sales held up because of an administrative meltdown at a company hired to run the Government’s Help to Buy scheme.
Borrowers are waiting more than four months for crucial documents they need to sell or remortgage their homes, a Money Mail investigation can reveal.
A major customer service logjam has been building up ever since the government agency in charge of the programme quietly transferred its administration from third-party technology company Target to rival Lenvi on June 19.
Rate has doubled: Sophie Charrington and her fiance Luca Ricci
Help to Buy, introduced by the then chancellor George Osborne in 2013, offered buyers of new-build homes a loan worth 20 per cent of the property price.
It allowed first-time buyers to purchase a property with a deposit of as little as 5 per cent of its value. The Government then provides a further 20 per cent equity loan, or up to 40 per cent in London. The loan is interest-free and lasts for five years.
More than 387,000 properties were bought with an equity loan between 2013 and 2023, with loans worth a combined £24.7billion.
To remortgage, most homeowners need a form called a ‘deed of postponement’. To sell or pay off the loan, they need a formal ‘redemption letter’.
Money Mail readers say they have faced long call wait times trying to get through to the right person at Lenvi. And — when they do — many complain of dismissive staff, feeble excuses and incorrect information.
Furious homeowners have taken to social media to complain, claiming they have spent up to eight hours a day on hold. In one extreme case, Lenvi chief executive Richard Carter had to intervene personally on Twitter after one person said they would be driven to suicide if their case wasn’t resolved.
When Money Mail tried to get through to Lenvi’s Help to Buy customer service line on Monday morning, an automated message said all agents were busy and there may be a very long wait.
After 55 minutes, the automated message said: ‘Unfortunately, for reasons beyond our control, your call will be ended after an hour.’
Our call was answered after 58 minutes on hold and a staff member admitted that there was a big backlog ever since third-party company Lenvi won the contract to administer the scheme.
Many have been cut off after an hour several times a day, in a desperate attempt to get through.
Richard Charrington was delighted when his daughter Sophie, a teacher, managed to get on the property ladder two years ago at age 28, thanks to the scheme.
However, Sophie, who took out a two-year fixed-rate mortgage on her three-bedroom detached house in Suffolk with her fiance Luca, has seen her mortgage repayments double because the couple has been unable to get hold of an important form.
They need a ‘deed of postponement’ to remortgage and lock in a new fixed rate with their lender, Kensington Mortgages. Without this, homeowners are being unfairly pushed on to sky-high mortgage rates.
‘Despite paying £115 and requesting this crucial document in April, it never arrived,’ says Richard, a business development manager. ‘They sent it in good time and didn’t have to remortgage until July 3.’
Until they receive the form, their lender has put them on a 9.25 pc standard variable rate, doubling their monthly repayments to a simply unaffordable £2,000.
‘It is total incompetence. I thought Help to Buy was a fantastic scheme at the start, but clearly it’s a fiasco,’ says Richard.
Sophie says: ‘We are getting married soon and this is extremely stressful. Every time we speak to a different person we get a different excuse. We were told it had been posted. Then that it had never been sent because our bank’s name wasn’t on our application. We reissued it but haven’t heard anything.’
Following Money Mail’s involvement, Homes England confirmed that it has now posted the deed.
A spokesman at Kensington Mortgages says: ‘We are urgently looking into Sophie’s case and will contact her shortly.
‘Where borrowers are impacted by delays we would urge them to contact us and we will look at what support we can offer.’
Those selling their homes are also caught up in the delays. Many risk their house sale falling through because they have been unable to get a ‘redemption letter’.
This form costs £200 and is needed to repay the Help to Buy equity loan. It confirms that the homeowner can repay their equity loan, the percentage of equity loan they took out and how much repayments will be.
However, some warn their house valuations are expiring because it is taking more than three months for the redemption letter to be sent through.
Emma Bedford is all too familiar with this. The 34-year-old took out a buy-to-let equity loan in 2018 to buy her one-bedroom apartment in Croydon but has been forced to pay hundreds of pounds extra to revalue her home.
Emma, whose name has been changed, wants to repay her loan and needed a redemption deed in order to do so. She started the process on March 21 and after much back and forth was told on May 31 by Target that her application had been successful.
However, when the letter failed to arrive, she spent more than 25 hours on the phone. It was only after tweeting Mr Carter, the chief executive, that she got a response.
She says: ‘They said my loan had been passed to Lenvi but they didn’t have any of my documents. All the work I did was wasted because my valuation is now out of date.’
Her five-year mortgage will end on July 31, after which her interest rate could shoot up from 1.9 per cent to 8.49 per cent if she goes on to a variable rate. This would add £700 a month to her mortgage.
A spokesman at Lenvi says that the company inherited a ‘significant number of complex cases’.
‘We have experienced four times the average volume of enquiries, as many customers trying to beat interest rate rises.’
The group has extended its working hours and is ‘gradually seeing a reduction in enquiries’.
A Homes England spokesman says: ‘We are aware customers are experiencing delays and sincerely apologise to those impacted.’
