Help to Buy review triggers fears for early end
The Department for Communities and Local Government (DCLG) has launched a review of the Help to Buy scheme which will be undertaken by the London School of Economics.
Reports that the review could mean an early end to the government’s help for first time buyers sent house builders’ shares tumbling first thing this morning.
This resulted in the DCLG issuing a further statement to allay the fears, noting that the policy was reviewed regularly, with the last one being in 2015.
“To infer from this that the Help to Buy Equity Loan scheme will be cancelled is simply incorrect,” the DCLG told Property Week.
House builders’ shares have since stabilised but are still trading between 1% and 3% down on the day.
The building and mortgage industry has been seeking clarity from the government about the fate of Help to Buy for several months.
With no confirmation that the scheme will be extended, many within the industry believe it may be ended in 2021.
Speaking in May, Barratt Homes head of mortgage lender relations Adrian MacDiarmid said the business was already planning developments for 2021 with the expectation the scheme would end.
“Land we are buying now we won’t be building units on until 2021 – so we’re taking decisions now based on the lack of availability of Help to Buy,” he said.
The policy has had a significant effect on the housing market and it would likely be noticed if and when it concludes.
Craig Hall, new build manager at Legal and General Mortgage Club, said: “With about 35-40% of new build sales through the help to buy scheme, it is important for buyers, builders and lenders to know soon if the government is going to extend the scheme past 2021.”