The government is being urged to reintroduce its Help to Buy scheme, amid soaring rents, rising rates and the cost-of-living crisis.
Paul Sams, partner and head of property at Law firm Dutton Gregory wants to see the scheme reintroduced, and said without it, a “whole generation of young people” were being denied access to opportunities to get on the property ladder.
Many first-time buyers were having to put their dreams of owning a home on hold, which was increasing pressure on the rental market, according to Sams.
He said: “The Help to Buy scheme was extremely beneficial to first-time buyers, housebuilders, and the overall health of the property market.
“As it was self-funding, it should never have been scrapped. With interest rates now at their highest level for 15 years, it should be reintroduced as soon as possible.
“First-time buyers are finding it much harder now, so there is a danger of a generation of young people being denied accessible home buying opportunities. Meanwhile, the demand for rental properties far outweighs supply. Prior to a decade of Help to Buy, there was Home Buy Direct and First Buy, so how is it right that there is no longer a government initiative to make home ownership a possibility for those without a substantial deposit?”
Sams said housebuilders could also offer their own private alternatives, citing Fairview Homes’ Save to Buy scheme and Proportunity as an example. Similar initiatives have been offered by St Modwen Homes and Kettel Homes, among others.
Sams added the government’s current First Homes initiative allowed first-time buyers who met Local Authority criteria to secure a home for 30 to 50% less than market value but there were few of these homes available.
“As there is currently no sign of widespread first time buyer assistance on the horizon, the only way forward is for more housebuilders to introduce their own private schemes in order to convert those in the rental trap to new homeowners,” he said.
“With a general election on the horizon, I do believe the government will introduce a scheme similar to the previous Help to Buy within the next 12 months, but it’s needed now. Housing developers are lobbying for its resurrection, but will they step up with their own initiative in the meantime?”
Help to Buy launched in 2013 and the scheme closed to new applicants in England last year. The final deadline to complete a purchase passed earlier this year.
Some 383,903 properties were bought using the scheme between April 1 2013 and December 31 2022. It allowed first time buyers to borrow an equity loan to cover up to 20% of their property purchase price, or 40% for properties in London.
Rishi Sunak’s proposal to relaunch Help to Buy will not fix housing crisis
Clearly this person has not had to go to value first time sellers properties that are worth 10% less than they paid for them a year previously. The new homes help to buy scheme benefited the house builders more than anyone else. First time buyers overpaid for their properties. Having been involved with developers at valuation stage of their site, they would almost invariably add 10% on if they were going to be selling on the help to buy scheme. I’m sure where 40% help to buy deposits were available, they were adding on substantially more. There are far better ways to help purchases than just line the pocket of housebuilders.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Spot on EAMD172
It boiled down to a scam scheme for the builders to benefit from.
Best way to help FTB’s is to gift them an amount of money to boost their deposit, perhaps £10k? Once only and have freedom of the whole market, not just certain builders who insist on their brokers or just new builds.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
JMHO – but better if they take the time to save the deposit – would prevent them buying properties to soon and having to sell sooner than expected because they realise they don’t actually like each other much. (talking about couples and reasonable deposit amounts).
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
The original scheme, where it was open to be used on a purchase of any property, as long as you filled certain criteria such as being on the waiting list for a Council house was much more beneficial. You got the 25% deposit, then when you sold you either paid back 25% of the sale price, or what you borrowed. I used it and it worked really well. It kept the market moving as it didn’t mean it was only on empty properties, therefore cutting most FTB out of the actual market.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I agree with all points, but this article demonstrates how little people understand the workings of the house market. Politicians in particular treat it differently to every other market.
However any economist would tell you that adding demand (gifted deposits to people who otherwise could not buy) in an already overheated market is just going to push prices up, making it harder for first time buyers to purchase. The complete opposite of what they wanted to achieve long term with the policy!!
Madness
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register