Help to Buy?

BobQ

The Conservatives flagship policy to help people afford to buy houses through Equity Loans has been investigated by the National Audit Office ......

https://www.nao.org.uk/report/help-to-buy-equity-loan-scheme-progress-review/

The scheme has loaned £11 billions to 211,000 people who had difficulty raising the loan value on their homes.

Yet 31% of buyers say they never really needed help from the scheme to buy their home

The report concludes that
"Some 4% of the 211,000 buyers who had used the scheme by December 2018 had household incomes over £100,000. The proportion has increased each year, from 3% in 2013 to 5% in 2018. Over the whole scheme, 10% of buyers had household incomes over £80,000 (or over £90,000 in London),"

and that:
"The scheme has supported five of the six largest developers in England to increase the overall number of properties they sell year on year, thereby contributing to increases in their annual profits. Five of the six developers in England that build most properties account for over half of all loans through the scheme. "

So is this scheme designed to help their friends in the development industry (who probably make significant contributions to the party) and disproportionately help higher income people buy houses?

AG47

HTB stands for help to bubble

triathlon

AG47 wrote: »

HTB stands for help to bubble

So cynical about everything.

or

Maybe it just helps young couple start their happy lives in their hopefully their first of a string of homes.

BobQ

triathlon wrote: »

Maybe it just helps young couple start their happy lives in their hopefully their first of a string of homes.

Maybe it does and there is nothing wrong with that. But why is helping those earning £100K+ a year?

Zero_Sum

When you could buy a house worth upto £600k this was always going to happen

Shouldve been capped at £125k for outside of London & £250k for London.
That way it keeps it to entry level properties.

Thrugelmir

BobQ wrote: »

Maybe it does and there is nothing wrong with that. But why is helping those earning £100K+ a year?

Hopefully there'll be some tweaking of the scheme.

The NAO report also says the scheme is going to produce a positive return for the taxpayer at the current time.

BobQ

Thrugelmir wrote: »

Hopefully there'll be some tweaking of the scheme.

The NAO report also says the scheme is going to produce a positive return for the taxpayer at the current time.

Even Government should be able to loan money and make a small profit out of it.

Graham_Devon

A report however many years on states what many of us were stating when the scheme was first announced.

It didn't take much insight to conclude the reports findings several years ago.

AG47

HTB 3 is going to be 50% interest free for 7 years

James1968

They were discussing this on the local radio this week. The major developers are, apparently, over-pricing homes being sold under HTB by up to 20%, so increasing the burden on the home buyer in the future.

Not sure how happy a home owner who purchased under HTB would be when they try to sell in 5years time only to find their house hasn't increased much in value.

Masomnia

James1968 wrote: »

They were discussing this on the local radio this week. The major developers are, apparently, over-pricing homes being sold under HTB by up to 20%, so increasing the burden on the home buyer in the future.

Not sure how happy a home owner who purchased under HTB would be when they try to sell in 5years time only to find their house hasn't increased much in value.

It seems to be basic economics that if the government starts subsidising one particular asset class, ie new build homes, it will push up prices in that sector.

Interestingly a friend of mine recently got a valuation to pay off the 20% equity loan of his as it got to 5 years of ownership and he said that while the value had gone up a bit it was only a small amount, which after 5 years he was disappointed with. There's a 'new build premium' anyway, but HtB does seem to be compounding it.