New calls emerge to revive Help to Buy

Renewed calls to resurrect the Help to Buy Equity Loan Scheme have been made to the Government.

Help to Buy ran from 2013 to 2022 and allowed buyers to purchase a new-build home with a 5% deposit alongside a Government-backed loan.

Homes England data shows that the Treasury made a return of £1.24billion on the Help to Buy scheme loans, £218million last year alone.

Help to Buy supported a third of a million first-time buyer households into home ownership.”

It comes as Home Builders Federation (HBF) data showed the number of home building sites getting planning permission fell to a new low in the first quarter of this year with just 1,220 sites for private housing granted planning approval across England, the lowest since the dataset began in 2006.

The HBF blamed this on high mortgage rates and a lack of state support.

Help needed

Neil Jefferson (pictured), Chief Executive at the Home Builders Federation, says: “The lack of Government support amidst a dearth of affordable mortgage lending is suppressing effective demand for new homes, preventing young people from getting on the housing ladder and thwarting attempts to increase the supply of new private and affordable housing.

“Help to Buy supported a third of a million first-time buyer households into home ownership, helped double housing supply, creating hundreds of thousands of jobs, and has delivered a £1.25billion return for taxpayers on repaid equity loans.

“If Government wants to see housing supply increase it has to tackle the dual constraints of a lack of viability due to the overly burdensome level of taxation and policy costs levied on development, and the suppressed level of demand that is preventing investment in new sites.

“Publishing the government’s evaluation of Help to Buy, which was completed earlier this year, would help to set the record straight on the performance of Help to Buy and may assist in paving the way for a new support scheme for first-time buyers.”

Developers such as Bellway have also called for a deposit support scheme for first-time buyers to boost demand.

Not everyone agrees though.

Charlie Lamdin, founder of BestAgent, says: “Calls to bring back Help to Buy are dangerously short-sighted. They ignore its long-term impact on house prices and affordability and the millions of aspiring buyers it left behind.

“Housebuilders calling for another Help to Buy scheme is understandable, but we need to distinguish between stimulating demand and making housing more affordable. Giving buyers more money to spend in a supply-constrained market risks allowing sellers to charge more, not drive affordability.”

If the Government genuinely wants to improve affordability, Lamdin suggests it should gradually reduce high lending multiples and longer mortgage terms, which have increased buyers’ purchasing power and helped sustain higher prices.

He adds: “Simply building more homes will not automatically make them cheaper if access to debt continues to expand.”

Change also seems unlikely. Former Chancellor Rachel Reeves ruled out resurrecting the Help to Buy scheme earlier this year, although it is unclear what her replacement John Healey’s policy will be.