Would You like a feature Interview?
All Interviews are 100% FREE of Charge
Chancellor Rishi Sunak has vowed to launch a “new and improved” version of the “Help to Buy” equity loan scheme if his party wins the general election.
The scheme, which ran from 2013 to 2023, provided access to 95% mortgage financing through 20% government equity financing for new build properties.
Between 2021 and 2023, interest rates paid on equity loans in years 6 and above will increase by CPI inflation plus 2%.
The announcement sparked mixed reactions.
“Many across the industry have long called for the return of Help to Buy, and while opinions are divided on its legacy, its success in helping people get up the home-buying ladder is undeniable,” said John Phillips, chief executive officer of Spicerhart & Just Mortgages.
“Without a shared ownership scheme, for many this will be the only way to make their dream a reality, particularly in the current climate where house prices are obviously skyrocketing. If successful, we hope this will include second-hand properties, giving more choice to first-time home buyers.”
“We have all seen the impacts, both good and bad, of the stamp duty cut. Yes, the cut will stimulate demand and help house prices rise, but a permanent removal is the only way to avoid the kind of cliff edge deadlines we have seen in the past, which have crippled the whole industry and caused incredible stress and tension.”
Others seem more hostile.
“Ultimately, we need to have enough supply of sustainable new homes to keep up with growing demand,” Propertymark chief executive Nathan Emerson said.
Polly Neate, chief executive of Shelter, said: “Help to Buy has been proven to do more harm than good to our housing system – inflating house prices, only helping a small minority of people and ultimately taking away funding for building truly affordable homes.”
The party also set out a target of building 1.6 million homes over five years, but this is likely to ring hollow given that the party missed its housebuilding targets in the last parliament and that target was ultimately scrapped.
Similarly, the Conservative Party has pledged to abolish Section 21 evictions in its second manifesto.