Calls to bring back the Help to Buy scheme

The Help to Buy scheme has been heralded a great success by the Home Builders Federation (HBF) – and the organisation is now calling for it to be replaced with a similar system.

New figures from Homes England show that the exchequer has made a return of £1.24 billion on the Help to Buy scheme loans, £218m last year alone.

By the end of last year 213,0000 of the 387,000 equity loans had been fully repaid, more than 55 per cent.

The Payback for Good report by HBF breaks down all the numbers and highlights the huge benefits the scheme continues to deliver.

The Help to Buy scheme ran from 2013 up until its withdrawal under the previous government in 2022.

Over its lifetime, it helped over a third of a million people purchase a new-build home, the overwhelming majority of whom were first-time buyers.

Over the time it was operating, housing supply doubled, delivering desperately needed new homes, creating hundreds of thousands of jobs and generating investment in communities the length and breadth of the country.

The period since its withdrawal has been the first time in 60 years there has been no government support scheme in place for buyers.

Suppressed demand for new homes as a result of a lack of affordable mortgage lending, fears over rising interest rates and the economy more generally is now the biggest constraint on house building alongside site viability.

While the scheme has been criticised, it delivered handsomely on all its preset objectives in terms of increasing housing supply, helping those struggling to buy to do so and driving economic growth.

A government-commissioned evaluation of the scheme was completed earlier this year and presented to ministers, but has not yet been published.

It should provide some balance around some of the myths that have been peddled about the scheme including the false narrative around it being inflationary, says the organisation

The industry has been urging the government to publish the report.

HBF has also been calling on the government to introduce a replacement equity loan scheme and has provided suggestions around what one could look like, including being purely focused on first-time buyers and requiring a developer financial contribution to reduce the cost to the taxpayer.

Neil Jefferson, chief executive at the HBF said: “The lack of government support amid 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 £1.25 billion return for taxpayers on repaid equity loans.

“If the 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.”