Help to Buy Potential Comeback

Prime Minister Rishi Sunak has put Help to Buy “back on the table”, according to reports over the weekend.

The Times said officials in both Downing Street and the Treasury are looking at proposals to help support first-time buyers.  The Help to Buy Equity Loan scheme ended on 31st March 2023. The scheme, originally launched by George Osborne in 2013, let people buy a new build home with a 5% deposit.  Users of the scheme could borrow an equity loan from the Government of up to 20% of the property’s value, or up to 40% if the property was in London.

This was interest-free for the first five years.  The Times reports that an extension was mooted before the spring Budget but was not taken forward amid fears that it would prove inflationary.

The Times quoted three Government sources as saying a new buyer’s support scheme was “back on the table” and could form part of the autumn statement. It has also been claimed it could be extended to cover older properties.  “We cannot go into the next election without an offer for first-time buyers,” one minister told The Times. “We all know that homeowners are more likely to vote Conservative and we cannot cede this ground to Labour.”

The move comes as Labour pledged to support for first-time buyers and revive targets to ensure that the private sector would build at least 300,000 homes a year.

Labour has said that should it win the next election it will launch a comprehensive mortgage guarantee scheme and give buyers first option on new homes in their area.

Mark Finch Director At Mortgage Pathways said “Although this is a great scheme for First Time Buyers and potentially Home Movers depending on how and If they do bring it back. There is a risk it could put fuel on the inflationary fire. We’ve already seen what can happen with Liz Truss when government policy does not align with Monetary Policy.  This may have to wait until we’ve tackled inflation then potentially a good move to bring it back for struggling home buyers.”