Those in the mortgage advice space are split on the announcement this week that the government is considering a return of Help to Buy, but many have said reintroducing it would be a good thing - so long as the government makes some tweaks.
Yesterday (May 1), The Times reported that Prime minister Rishi Sunak is exploring the idea of relaunching the Help to Buy scheme in a bid to secure a fifth term of Conservative rule.
According to the Times, officials in Downing Street first explored reintroducing the scheme in the run up to the Spring Budget, but put the idea on hold over fears that it would fuel further inflation.
The Help to Buy scheme was launched in 2013 and was available for new build properties, offering a government loan of up to 40 per cent of the home’s value.
The scheme closed to new entrants at the end of last year.
The Times has reported that if reintroduced, the government is considering expanding it beyond new build properties in order to avoid price inflation on new build flats.
Affordability hurdle
Responding to the news, the Association of Mortgage Intermediaries chief executive, Robert Sinclair said he was in favour of the move, given that there is a lack of other support available for first-time buyers.
“The First Homes scheme which has excellent ambition is struggling to gain traction with those it is designed to support. Accordingly, the new build sector is working hard to maintain the momentum it achieved as we came out of lockdown, but the lack of the simple and transparent support that Help to Buy provided is making it difficult to get first-time buyers over the deposit and affordability hurdles,” Sinclair said.
Sinclair noted that an alternative for first-time buyers is available in shared ownership schemes but he said in many cases this is “too complicated for most consumers to grasp and operate”.
“It is therefore logical for government to review and consider an intervention that has worked well,” Sinclair said.
He added: “However, they will need to ensure that any new structure provides the right support to consumers in a higher interest rate environment and not just line the pockets of our friends in the construction sector.
Election incoming
Others in the industry did not respond as positively and noted that its timing suggests it is a “move to buy votes”.
Mortgage broker Lewis Shaw, founder of Riverside Mortgages described it as “perhaps the worst idea the Tory government have had since the ‘mini’ Budget”.
He argued that the government should stay out of it and let it find its equilibrium.
“Moreover, this has nothing to do with helping people get homes; it’s a cynical move to buy votes, nothing more, nothing less and no one should be fooled by it," Shaw added.
Likewise, Samuel Mather-Holgate, an independent financial adviser at Mather and Murray Financial said: “Considering housing was totally overlooked in the budget in March, it's no surprise that the PM is having to listen to the cacophony of indignation from those in the property industry and those looking to get onto the ladder.”
