By Benson Daniel
The UK government’s Help to Buy scheme delivered what an official review has described as “very high value for money”, strengthening calls for a redesigned version of the programme to help more people purchase their first homes.
The scheme, introduced in 2013 under former Chancellor George Osborne, supported more than 300,000 first-time buyers and was responsible for one in seven additional new homes built in England, according to the evaluation.
Nearly half of those who used the programme said they would not have been able to buy a home without its support.
The review found that Help to Buy generated a net present social value of £25.1 billion, compared with a cost of about £3.6 billion. Much of the benefit came through increased land values associated with the additional housing activity.
The programme was designed to make home ownership more accessible by providing government-backed equity loans for new-build properties and later introducing a mortgage guarantee scheme aimed at reducing the deposit requirements faced by buyers.
Its popularity, however, was accompanied by criticism that the policy disproportionately benefited higher earners and contributed to rising house prices.
The latest review acknowledged that Help to Buy increased house prices by about two percentage points, potentially making it more difficult for some people who had not yet entered the housing market to afford a home.
Despite the criticism, the findings have renewed debate within government over whether a new and more targeted version of the programme could help address Britain’s housing affordability crisis.
Some Labour figures had been pushing for a revised scheme focused more heavily on people who would otherwise struggle to get onto the property ladder, particularly in areas where demand for new homes has weakened.
The proposal would potentially involve state-backed equity support for new-build properties while limiting assistance to households with greater affordability challenges.
However, the government has not announced plans to bring back the original Help to Buy programme.
Ministers have instead placed greater emphasis on increasing the supply of homes through planning reforms, social and affordable housing investment and other measures designed to encourage housebuilding.
The government has committed to delivering 1.5 million new homes during the current parliamentary term, although meeting that target remains a significant challenge.
The housing industry has continued to argue that government support is needed to unlock demand from potential buyers who cannot currently afford to purchase homes because of high mortgage costs and large deposit requirements.
The review is therefore likely to keep pressure on ministers to consider whether some form of buyer support should accompany efforts to increase housing supply.
For prospective first-time buyers, the central question remains whether future policy can make home ownership more accessible without pushing property prices higher.
The government’s decision on whether to revive or redesign Help to Buy could have significant implications for first-time buyers, housebuilders and the wider UK housing market.
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