Any Government review of the Help to Buy Scheme must avoid a "cliff-edge" ending of funding. The Intermediary Mortgage Lenders Association (IMLA) has issued a warning that without clarity over the future of the scheme, the housing market could be destabilised.
The IMLA represents 43 banks, building societies and specialist lenders, many of which provide the mortgages for first-time buyers and other homeowners who have used Help to Buy to fund their home purchase.
According to the IMLA, almost 170,000 new homes have been built because of the demand created by Help to Buy, with 81 percent of those new homes bought by first-time buyers. And it estimates that almost half of those first-time buyers (43 percent) could not have bought a home without Help to Buy finance.
The Government has confirmed funding for Help to Buy until 2021 at least, but the IMLA says any review of the current scope of the scheme that involves a policy cliff-edge would leave many first-time buyers unable to get a mortgage.
It says the scheme has allowed mortgage lenders to offer loans to younger borrowers who would not have been able to find finance to buy a home.
The IMLA wrote to Chancellor Philip Hammond in September to express its concerns about future funding.
Kate Davies, IMLA executive director, said: "We are concerned that funding for HTB is due to be withdrawn in 2021 and that there has as yet been no clear signal as to what, if anything, might replace it.
"Given its success - and its importance in boosting both home ownership and housing supply - we believe that some form of government support should continue.
"Lenders and borrowers place heavy reliance on the scheme, and a major step-change to arrangements would risk significant market disruption and potentially undermine the Government's ambitious targets for new housing supply.
"If changes to the scheme are being proposed, lenders will need appropriate notice in order to plan ahead and deliver positive outcomes - hence our wish to have clarity as soon as possible on the Government's intentions.
"We look forward to hearing the Government's plans and to working closely to continue the development of what has become a key element of housing policy."