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UK public spending watchdog finds that 63% of scheme’s users could have afforded housing without government help
Thursday, June 13, 2019 – 10:23am
More than half of people who have used the government’s Help to Buy scheme since its introduction in 2013 have been relatively wealthy homeowners who could have purchased property without help from the state, a spending watchdog has found.
The pros and cons of Help to Buy: is it worth it?
The Help to Buy scheme was launched by then-Chancellor George Osborne in 2013 in a bid to “boost home ownership and housing supply by making it easier for people to get mortgages”, Politics Home reports.
The scheme has allowed buyers to put down a deposit of as little as 5% on new-build homes worth up to £600,000 and receive an equity loan from the government to cover 40% of the property’s value in London, or 20% elsewhere, the Financial Times reports. The remainder is covered by a traditional mortgage.
However, a report by National Audit Office (NAO) this week has revealed that just 37% of the 211,000 people who have so far benefited from Help to Buy would not have been able to afford a property without the support, with the remaining two thirds of recipients already wealthy enough to buy a home without state handouts. Of this group, around 4% had a household income of more than £100,000.
Gareth Davies, head of the NAO, said: “Help to buy has increased home ownership and housing supply, particularly for first-time buyers. However, a proportion of participants could have afforded to buy a home without the government’s help.”
To some, the news is confirmation that the Help to Buy scheme has been a failure. Shadow Housing Secretary John …read more
Source:: The Week – All news