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Land & New Homes

Government Help to Buy spending passes £10 billion milestone

Figures reveal staggering level of money spent by HM Treasury on the housing market stimulus package.

Nigel Lewis

Just 24 hours after Persimmon revealed half of its homes were funded by Helped to Buy, HM Treasury has revealed that nearly 500,000 homes have been purchased via the scheme since it started in 2013 and that £10.7 billion has been spent on equity loans for the scheme by the government.

Yesterday on Radio 4’s Today programme commentator Henry Pryor described Help to Buy as the ‘crack cocaine’ of the building industry and that when it finished in 2023 it may be a hard cold turkey for builders.

The scheme is due to be wound down from 2021 when it will apply only to first time buyers and feature regional price caps.

HM Treasury’s latest figures reveal that 494,108 Help to Buy purchases have now been completed of which nearly 200,000 came via the Equity Loan element. Some 93% of the scheme’s purchases have been outside London and the vast majority of were for first time buyers.

The second most popular part of the scheme is the Help to Buy: ISA. Some 1.4 million people have taken one out and they are most popular in the North West and Yorkshire & the Humber. And nearly 200,000 of the Help to Buy completions have been made via this route, the figures reveal.

“As the scheme is wound down, this presents an opportunity for policy makers to focus their attention elsewhere,” says Joseph Daniels (left), founder of modular housebuilder Project Etopia.

“The country needs to get the balance right between new building and demand-side measures like Help To Buy, which simply improve the financial position of prospective buyers.

“If prices are being inflated, that would make the climb facing first-time buyers an even steeper one with much of this cash ending up in the pockets of developers.”

 

February 27, 2019

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