You are here: Home - Mortgages - First Time Buyer - News -

£10bn extension of Help to Buy ‘like throwing petrol onto a bonfire’

0
Written by: YourMoney.com
02/10/2017
Prime Minister Theresa May has been criticised after announcing an extension to the government’s Help to Buy scheme.

Speaking yesterday on the BBC’s Andrew Marr show, May said the government would make a further £10bn available to enable the Help to Buy scheme to get another 135,000 people onto the property ladder. The prime minister said details for the plan would be given in the Budget, on 22 November.

The Help to Buy scheme has encouraged more new homes to be built, but rates still remain well down on historic highs and are far below the numbers needed to meet demand.

Since the last set of results were published it has also emerged that builders are adding a Help to Buy premium to developments and according to estate agent research the higher value loans available in London are distorting the market.

However, housebuilders have been urging the government to extend the scheme to enable them to make plans for developments beginning in 2021.

‘Fenced in by NIMBYs’

Extending the scheme has drawn criticism from a number of areas.

Sam Bowman, executive director of the Adam Smith Institute, said: “Reviving Help to Buy is like throwing petrol onto a bonfire. The property market is totally dysfunctional because supply is so tightly constrained by planning rules, and adding more demand without improving the supply of houses is just going to raise house prices and make homes more unaffordable for people who don’t qualify for the Help to Buy subsidy.”

He added: “Only 2% of England is built on, but we’re fenced in by NIMBYs (not in my backyard) and planning laws that block development nearly anywhere.

“To improve the housing market you need to change the rules of the game, so that damaged parts of the green belt can be built on, so we can have more dense and efficient development of existing urban areas, and so that locals benefit from new developments near them. Reviving Help to Buy is an astonishingly ill-judged move that may prove economically and politically disastrous for the government.”

The Adam Smith Institute was not alone in criticising the move. Polly Neate, CEO of Shelter, said: “Extending Help to Buy is the wrong priority at a time when over a million renters are struggling with crippling housing costs. Help to Buy has barely helped the first-time buyers it is targeted at and has done nothing to help those worst affected by our broken housing market and those at risk of homelessness. Moreover, it has increased house prices and propped up a speculative development model in need of reform.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

YourMoney.com Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
2199093-airplane-generic
Stock of the week: Porvair

Graham Spooner, investment research analyst at The Share Centre, picks specialist filtration and environmental technology group Porvair as stock of...

Close