Speaking at an event hosted by Barratt London, Neil Jefferson, the chief executive of the Home Builders Federation (HBF), said the trade association had designed a revised version of the government-backed equity loan scheme ready to be rolled out should it get the green light from the housing minister.
It would include a financial contribution from developers and could sit under the government’s existing Freedom to Buy banner, which currently only includes the 95% mortgage guarantee scheme.
He said: “Under that banner, you could actually launch a new product [that] learns from the past.
“I think lenders have done great things in terms of increasing what’s on offer to first-time buyers through [income] multiples and affordability.
“But people don’t know about it until they go and see their broker. Whereas, a national scheme [that] is supported by government creates a draw, which people would be attracted to.”
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Hopes of a return
Help to Buy was launched in April 2013 and the last completions came through the pipeline in May 2023. Over that time, 387,000 homes were bought, according to government figures, with first-time buyers accounting for 83% of purchases.
A straw poll at the event revealed a third of the senior housing professionals in the room expected Help to Buy to be brought back in some form within this Parliament, while one of those said they expected it to be this year.
But a delayed publication of the government’s review of Help to Buy was not helping the discussion, added Jefferson.
He said: “We had expected to see the government’s Help to Buy evaluation published last year and this could have helped dispel the myths about the scheme.
“Among those myths is the claim that Help to Buy led to new-build house price inflation, which is simply not borne out by any data.”
He added: “I think it would have been good if that report had been published before now. It may have created more confidence in the minds of politicians to actually support the successor to Help to Buy.”
Jefferson wants the housebuilding and mortgage industry to be more vocal about its views on a renewed government-backed equity loan scheme.
“It’s quite important [that] the likes of UK Finance, as well as individual lenders, find their voice with regards to their position on a replacement scheme for Help to Buy and concerns about that. So that when the moment does come, it’s not just housebuilders that are calling for it, it’s the wider industry as well,” he said.
UK Finance said it was aware that the HBF has advocated for the return of Help to Buy and would be speaking to members in the coming weeks about their views.
Public-private collaboration
Barratt London’s regional managing director Craig Carson agreed that one of the changes to any new scheme brought forward should be the way it is funded.
“Reinstating a government-backed demand-side incentive, similar to the Help to Buy model that buyers broadly understood, would provide credible and accessible support for first-time buyers across the country.
“Any new scheme should build on the simplicity and recognisability of the previous programme and incorporate public-private collaboration, including developer contributions. Embedding a sliding scale of private investment would help bring smaller builders back into the market – ensuring a broader range of homes are delivered that meet the needs of first-time buyers, particularly in London,” he added.
‘Live’ discussions
The Chancellor would not confirm or deny whether she would authorise the return of Help to Buy, stating during an interview with The i Paper that Labour was focused on reforming the planning rules and making housing more affordable by bringing down interest rates.
Since Labour came into power, 309,600 homes of the one-and-a-half million targeted delivery have been built.
Pennycook told FT.com that the target could still be met and that it was finishing “the bulk of the supply-side measures”, and would next focus on ensuring building volumes increased.
He also said discussions were underway around ways to stimulate demand.
Sarah Tucker, founder and chief executive of The Mortgage Mum and member of the government’s new media unit, said: “From what I’m hearing [in government], the conversation around its return is very much live, but it’s likely to look different. If it does come back, I expect we’ll see tighter eligibility criteria, more regional targeting, and potentially greater involvement from developers in sharing the financial risk.”
Scrap the regional caps
Helen Pierson, director of Mortgage Advice Bureau (MAB) New Homes, said if Help to Buy returns – she gives it a 50:50 chance – criteria should be focused on needs and not wants.
“We need to avoid the ‘bigger, better, sooner’ mentality,” she said.
She noted that regional price caps did not work in many parts of the country – their broadness failing to recognise huge variations in price even across one county.
She said the result was that in the final version of Help to Buy, many sites did not have a single property that qualified for the equity loan scheme and some builders struggled to market properties under the cap.
“An affordability assessment, similar to that applied to shared ownership, might be a fairer, more tailored and workable solution,” she added.
A government spokesperson said: “Help to Buy was introduced and closed under the previous government, and an independent evaluation of the scheme is ongoing.
“We have no plans to introduce a new Help to Buy scheme.”
