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Reviving Help to Buy: Assessing the Pros and Cons

The potential revival of the Help to Buy scheme by Prime Minister Rishi Sunak has sparked a mixed response from various quarters. Initially launched in 2013 by George Osborne as a means to stimulate high loan-to-value lending and aid the UK’s post-financial crisis recovery, the scheme successfully encouraged lenders to offer mortgages with just a 5% deposit. Help to Buy functioned by incorporating an interest-free portion of 20% (or 40% in London) for five years.

While the scheme achieved its intended purpose, it has also faced criticism for contributing to soaring house prices. Paul Cheshire, a former planning adviser to the government and emeritus professor at the London School of Economics and Political Science, expressed concerns over the potential revival, describing it as an “insane idea” that could burden young people with unaffordable homes.

Approximately 350,000 individuals benefited from the Help to Buy scheme, enabling them to purchase their first homes. However, it is believed that the scheme may have inadvertently allowed developers to inflate prices for new builds, creating affordability challenges for many prospective buyers.

David Smith, head of property litigation at JMW Solicitors, acknowledged that Help to Buy had provided some assistance to those seeking to enter the housing market but highlighted the significant number of individuals who were left without support.

Although the Help to Buy scheme only recently concluded, its potential relaunch remains uncertain due to the mixed reaction it has generated. The government faces the task of weighing the scheme’s previous successes against the concerns and criticisms of experts and industry professionals.

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