Help to buy lending

Amazon007

Hi. My son is trying to buy a flat as a single earner on a 60/40 equity share in the help to buy scheme. The issue is that even though he earns £35k per annum the lenders are only offering approximately £85k on the basis that in six years time he will have to pay the interest on the governments share. My wife and I are helping fund a £40k deposit against the £180k equity value. Does anyone know
1) why the lenders are taking this stance as they don't seem to protect themselves against future interest rate rises?
2) any alternatives to this situation otherwise it becomes impossible to buy in to property in the Greater London area?

Thanks

kingstreet

Lenders factor the future interest cost of the equity loan into mortgage affordability. This is typically 3% or 4% of the loan.

I'd still expect a maximum mortgage of more that £85k on that income if it's all basic salary. Are there ground rent & service charges to take into account? Any credit or other outgoing, such as season ticket loan?

Lender affordability calculations stress-test at higher rates as well.

Thrugelmir

Polite way of declining the application. For commercial reasons unrelated to your son's application or circumstances. They've no interest in underwriting the business at the current time.

Lenders aren't like supermarkets selling baked beans. Not all about volume sales.