Cochrane explained that in certain areas Help to Buy was so dominating in the new build market it was artificially pushing up prices and added that it had changed the types of properties developers build.
Speaking at the Financial Services Expo, Cochrane noted it was difficult to see a cliff edge in 2021 when the existing funding stops, but that it may also be difficult to continue in its current form.
“I personally think we should look at how that becomes more of a targeted product and therefore that element of people who actually need it to get on the housing ladder, as opposed to using an opportunity that allows people to buy in higher up,” he said.
“It’s difficult to see it end, but it’s also difficult to see it continue and I think a more targeted approach is what the market needs.”
Is there demand for £600,000 properties?
Cochrane used two examples to highlight how the Help to Buy scheme had influenced the market.
First he raised the case of artificially increasing prices.
“A challenge we are seeing more with apartments in London, and this is coming through from the valuation sector, is you can see some developments where every flat or house up to £600,000 has been supported by Help to Buy,” he said.
“Now that means you know every customer has only put 5% into that property.
“So we were then asking is there an open market demand for property of £600,000 without Help to Buy? That’s a good question and I don’t know the answer,” he added.
Right type of houses
Second, Cochrane said the greater availability of funds meant builders were building bigger homes than the country perhaps needed.
“What [Help to Buy] has done is changed some of the dynamics. I said about building the right type of houses.
“If you’ve got a customer who’s able to access Help to Buy and therefore buy a nice family home, why wouldn’t you just build that family home, instead of some of the entry-level homes.
“So I think we need to look at how we get that balance right,” he added.