You are here: Home - Better Business - Business Skills -

Extend Help to Buy but make needed changes – Whitehouse

by: Phil Whitehouse, managing director, MCI Mortgage Club
  • 14/09/2018
  • 0
Extend Help to Buy but make needed changes – Whitehouse
There’s been plenty of debate recently about Help to Buy and whether it’s likely to be extended beyond 2021.


The mortgage guarantee element of the scheme, Help to Buy 2, has already come to an end and now the focus is on the equity loan scheme.

The scheme has obviously stimulated the market and has no doubt been invaluable to first-time buyers struggling to get on to the housing market.

Despite this, however, I think it may be time to review the scheme and make some much needed changes.


Housing market has changed

The housing market is a very different beast to what it was five years ago when the scheme was first introduced.

But, more than that, I think we need to look at the impact Help to Buy is having, and could have, on the market.

It’s clear that while home buyers have been able to get onto the property ladder as a result of Help to Buy, the real beneficiaries have been the house builders.

According to a report released last year by Morgan Stanley, developers profits have trebled since 2013, thanks in no small part to the increase in business as a result of Help to Buy.

Furthermore, there are concerns that house prices have increased because of the scheme.

Would we have seen values remain at a more attainable level if the government wasn’t boosting buyers’ buying power with an extra 20%?


Change tack

There’s no disputing that Help to Buy has been a huge success but I think we need to change tack now and, in particular, look at whether the London scheme limit of £600,000 is still required.

It’s also time to stop putting a plaster on the housing market wound and start treating it with more sustainable actions including building more homes and agreeing a universal standard for properties of alternative construction methods.

Continuing to let house prices escalate while allowing buyers to take on a loan to meet them can only happen for so long.

We need to look at addressing the issues in the market as a whole.

Indeed we are also to see the effect on borrowers when the government’s Help to Buy portion is to be repaid or interest becomes due on the loan.

The government has confirmed the scheme will not be ending earlier than 2021 as previously speculated – which is fair since many would be buyers may have it in their immediate plans to use Help to Buy – but has not said whether or not it will be extended.

My gut feeling is that it should for the time being, subject to some much needed changes.

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.


Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.


Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.


Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
  • RT @robjupp: Great day yesterday for donations to @MortSleepOut. With Gift Aid, we are now close to £17,000. It would be great to get to £2…

Read previous post:
Housing transactions hit two year high – Haart

Transactions across England and Wales jumped in August by 10% compared to the previous month and by 13.6% against the...