09:54AM, Monday 17 September 2018
The Government’s Help to Buy equity loan scheme has been declared an ‘unmitigated success’ for enabling more than 170,000 households to purchase a home.
The Home Builders Federation (HBF) said 81% of those assisted had been first-time buyers, while the scheme had led to a 74% jump in housing supply since it was launched in 2013.
The report estimated that 246,000 individuals have got onto the property ladder thanks to the scheme.
HBF says that the report, released as the Government considers the scheme’s future beyond 2021, shows how Help to Buy has achieved all the targets specified at launch – to increase home ownership, increase housing supply and generate economic activity.
Stewart Baseley, HBF executive chairman, said: “It is quite clear that the Help to Buy scheme has been an unmitigated success and has delivered handsomely on all its objectives.
“It has enabled hundreds of thousands of people to realise their dream of owning a home, the vast majority of whom are first-time buyers on average incomes. It has led to an unprecedented increase in housebuilding activity, created tens of thousands of jobs and boosted local economies the length and breadth of the country.”
However, some commentators argue that Help to Buy has actually made homeownership more expensive, pointing out the scheme has been used by better-off households trading up the property ladder.
The scheme, which enables people to buy a new-build home with just a 5% deposit, with the Government contributing an interest-free equity loan of 20%, rising to 40% in London, for the first five years, has undoubtedly helped many first-time buyers get on the property ladder.
But one out of five people who use the scheme are not first-time buyers, suggesting more than 32,000 people have used it to buy a bigger home.
Critics claim that by offering buyers an interest-free loan, the Government has boosted housing demand at a time when it would normally slow due to stretched affordability, enabling property values to continue to rise.
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