Help to Buy scheme ‘set to be scrapped by ministers over fears it gives too many handouts to middle class’
The Government is reportedly planning to replace Help to Buy after the current programme expires in 2021
THE Government is preparing to kill off its flagship Help to Buy scheme over fears it only helps the rich, it was reported today.
The programme gives cheap loans to first-time buyers hoping to get on the housing ladder and is supposed to ensure they’re not put off by the cost of a deposit.
But stats have shown that much of the money available has gone to wealthy house-hunters - and critics claim the scheme has driven up already sky-high property prices.
Now ministers are planning to replace it with a new system after the current arrangement expires in 2021, .
The Government may introduce a temporary extension to avoid massive disruption for developers, the paper said.
But the new regime would put more emphasis on helping out the lower-paid, rather than giving handouts to the middle classes.
Official figures released earlier this year showed that the average household benefiting from Help to Buy earns £55,000.
And some of those using the scheme are drawing salaries of as much as £100,000, the Government admitted.
Critics have accused Help to Buy of helping to push up house prices, because it boosts demand for housing without doing anything to increase supply.
Matt Kilcoyne from the Adam Smith Institute think-tank told The Sun: "Help to Buy has been no help to the vast majority.
“Scrapping the scheme is a good step toward a housing market that works for everyone. The well-off shouldn't get a hand out from government that pushes up the price of houses in already expensive markets.”
He called for ministers to take more radical steps to reduce the cost of housing - such as relaxing planning laws and even scrapping the Green Belt.
But developers today warned the Government that scrapping Help to Buy could prove devastating for the construction sector and housing market generally.
David O'Leary of the Home Builders Federation told the Sunday Telegraph: "As well as supporting hundreds of thousands of first-time buyers on to the housing ladder, Help to Buy has driven unprecedented growth in housing supply since 2013. Builders continue to invest in new land and labour to build more.
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"Without the scheme in some form, the Government's ambition to deliver 300,000 new homes per year will be even tougher to achieve."
A Government spokesman said: "The vast majority of those using our Help to Buy equity loan scheme are first-time buyers, as we help a new generation of people own a home of their own.
"More than half of households using it earn less than £50,000, so we are also helping those on lower and middle incomes get on the property ladder."
Shadow Housing Secretary John Healey called for a change to the status quo, saying: "As it stands, the scheme is poorly targeted and poor value for taxpayers' money. Help to Buy should be overhauled and tightly targeted on first-time buyers with ordinary incomes, as Labour has long-argued."
What other help is out there for first-time buyers?
GETTING on the property ladder can feel like a grim task, and the potential abolition of help-to-buy loans may make it even harder but there are other schemes out there to help first-time buyers get on the property ladder.
Help to Buy Isa - It's a tax-free savings account where for every £200 you save, the government will add an extra £50. But there's a maximum limit of £3,000 which is paid to your solicitor when you move.
Lifetime Isa - Another government scheme that gives anyone aged 18 to 39 the chance to save tax-free and get a bonus of up to £32,000 towards your first home. You can save up to £4,000 a year and the government will add 25 per cent on top.
Shared ownership - Co-owning with a housing association means you can buy a part of the property and pay rent on the remaining amount. You can buy anything from 25 to 75 per cent of the property but you're restricted to specific ones.
"First dibs" in London - London Mayor Sadiq Khan is working on a scheme that will restrict sales of all new-build homes in the capital up to £350,000 to UK buyers for three months before any overseas marketing can take place.
Starter Home Initiative - A government scheme that will see 200,000 new-build homes in England to be sold to first-time buyers with a 20 per cent discount by 2020. To receive updates on the progress of these homes you can register your interest .
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