Help to Buy scheme ‘set to be scrapped by ministers over fears it gives too many handouts to middle class’

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.

"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."

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