Taylor Wimpey's website was misleading prospective new home buyers into thinking that they "own 100%" of their new home when they buy using the government's 'Help to Buy' scheme.
The website stated:
"With Help to Buy you only need a 5% deposit. You take out an equity loan which is interest free for five years so you only need a 75% mortgage, but you own 100% of your new home."Obviously the 20% Equity Loan proportion of the new home is owned by the Government and buyers will not benefit from any increase in the property value of this part of the loan.
Brand-newhomes.co.uk reported this to the Trading Standards Office and the website has since been updated and the page removed.
But they are still at it!
This page states: "The Help to Buy interest free equity loan is exclusively available on new build properties." This would imply the equity loan is free.
But stating the Equity loan as "interest free" is incorrect.
It is only interest free for the first five years, after that a charge or fee of 1.75% per year this rises with RPI inflation plus 1% each year is charged on the equity loan. For example, the fee would rise from 1.75% to 2.21% in just five years with an increase each year of 5% RPI plus 1%. A fee payment of £700 on an equity loan for £40,000 in year six, would rise to £884 in year ten. Hardy FREE Taylor Wimpey!
Taylor Wimpey's
useful Help to Buy Information pdf download does not contain these misleading statements. It does give useful examples of both how the fees charged rise in the years ahead and the effect that rising house prices will have as the value of the equity loan also increases.
It also highlights that
"Applicants who make fraudulent claims for Help to Buy assistance will be liable to criminal prosecution." Pity this does extend to those selling new homes!
