After six years of cheap loans for homebuyers, Help to Buy is being wound down. How will housebuilders cope with the change?
“Nothing lasts longer than a temporary government programme,” as Ronald Reagan once said – and Help to Buy could be seen as a textbook example.
The UK government housebuilding support programme was originally launched in 2013, when concerns were widespread that the post-financial crash UK was about to plunge into the second descent of a double-dip recession.
Under the scheme, homebuyers receive from the government an equity loan, equivalent to 20% of the value of the property they are buying. The loan is interest-free for five years, and all homebuyers have to stump up is a 5% deposit.
The scheme was only meant to run until the end of 2016 but was given a last-minute stay of execution by the chancellor, Philip Hammond. Then last year Help to Buy won another lease of life when Hammond extended the scheme to 2023, albeit with a few tweaks.
Here, Housing Today examines how reliant housing supply has become on Help to Buy, the likely impact of the soon-to-be introduced restrictions and whether the housebuilding industry can be weaned off its subsidy fix.
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