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

State housing schemes ‘only help the wealthy’ – report

0
Written by:
03/07/2017
State-sponsored housing schemes tend to help wealthier buyers rather than lower income groups, a report by the Social Mobility Commission reveals.

Low Cost Home Ownership (LCHO) are common-place in many countries, but the report said their impact on social mobility was likely to be small. It found: “Although the median household income of working families is £507 a week (equivalent to around £30k gross annually), 80% of beneficiaries of LCHO schemes had incomes above £30k pa.”

The report showed that 48% of first-time buyers benefiting from Help to Buy Equity Loans paid over £200k for their home. It also cited a recent report commissioned for the Department for Communities and Local Government, which found that the average (mean) gross household income at the time of the Help to Buy Equity Loan purchase was £47,050, and the median income was £41,323. This is higher than the average.

It added: “This indicates that these schemes are not expanding the social mobility by opening up home ownership to new groups of lower income households. Rather they are being used by households who would most likely buy anyway.”

It said that shared ownership schemes were likely to be a more effective route to home ownership, and is taken up by households with income very near median income. The commission report also stated that specific targeting mechanisms could improve the impact of LCHO schemes on social mobility: These include targeting of financial subsidies on households with incomes up to 1.5 times median income, but at different levels for different regions; and providing much more advice and guidance to appropriate working households from groups or communities without a history of ownership.

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.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

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...

Money Tips of the Week

Read previous post:
UK economic growth downgraded

The indecisive General Election result will hit confidence and dampen GDP growth, according to consultancy group the Centre for Economics...

Close