Help to Buy – should it stay or should it go?

16th November 2017

The Government's Help to Buy scheme has been a huge success with nearly a quarter of a million individuals, couples and families taking it up, around 80% being first time buyers.

And it's not just first time buyers who benefit. It is also available to existing homeowners, making a real difference to people needing to move to a bigger home because maybe they now have a young family.

Chancellor Philip Hammond was under pressure to give a longer-term commitment to Help to Buy in his Autumn Statement, especially as there was some lobbying for the scheme to be dropped.

Fortunately, nothing came of that and although a year ago the Government announced an extension of the initiative up to 2021 it has always said it could close earlier "if all of the funding is taken up before."

Help to Buy was a flagship policy of the Cameron/Osborne regime, and In 2016, Hammond ended the Help to Buy mortgage guarantee just, leaving the equity loan scheme in place.

Since their launch in 2014, over 120,000 equity loans have been given, giving buyers a loan of up to 20% towards their deposit on a new home.

Beresfords Director, Terry Holmes, says "With housing affordability being a real issue and deposits being the biggest barrier to those wanting to get a foot onto the housing ladder, Help to Buy has proved to be really valuable."

"We are all concerned about how younger people, in particular, can afford their own home. The 'Bank of Mum and Dad' has helped but only for those whose parents are affluent enough. Those that aren't had little hope until Help to Buy came along, and the fact that 4 out of 5 of those people were first-time buyers shows that it has done the most good where it was most needed."

It's certainly proved popular at Hazelwood Park, a new development of fourteen 2/3 bedrooms near Epping being marketed by Beresfords, where 50% of the buyers have used Help to Buy.

"We shouldn't underestimate the importance of Help to Buy added Terry Holmes. "We strongly advise our builder clients, regardless of their size, to register for Help to Buy at the earliest stage they can."

"Fortunately we're very used to setting this up for our developers in conjunction with our mortgage side Flagstone, so we're more than happy to meet with builders and advise on Help To Buy and the best mix on a site."

Critics have suggested that the increased demand created has pushed prices up because the supply of new build has remained static but of course the Chancellor announced ambitious plans for 300,000 new homes in the Autumn Budget to tackle the chronic undersupply.

There's no doubt that for many of the people who have taken up Help to Buy, it has meant the difference between owning their own home or living in a rented property and having little chance of saving for a deposit after the rent has been paid each month.

Stay or go was, of course, the Brexit question, but when it comes to Help To Buy from us, it's definitely stay!