The UK government’s ‘help to buy’ scheme was supposed to put home ownership within reach of millions of young people unable to afford huge deposits.
When former chancellor George Osborne unveiled the Conservatives’ flagship housing policy six years ago, he vowed to give a leg up to the “majority who cannot turn to their parents for a contribution.”
But a new report shows more than six in 10 buyers using the scheme could have got onto the property ladder without it.
Almost a third, or about 65,000 households, of those who had benefited from the generous loans by the end of last year could have even bought a property they particularly wanted.
The latest figures from the National Audit Office (NAO), which released the report on the scheme’s effectiveness, also showed nearly one in 20 buyers had a household income of more than £100,000.
Meg Hillier MP, chair of the influential public accounts committee, said: “The NAO’s report finds that many of the people benefiting from the Help to Buy scheme could have bought a property without the help of the scheme, and that the government’s investment is not without risk.
She said the government “must safeguard its investment of taxpayers’ money,” and “exercise caution in winding down the scheme if it is to minimise negative effects on the housing market.”
Gareth Davies, the head of the NAO, said: “The scheme has exposed the government to significant market risk if property values fall, as well as tying up a significant public financial capacity.”
“The government’s greatest challenge now is to wean the property market off the scheme with as little impact as possible on its ambition of creating 300,000 homes a year from the mid-2020s.”
The NAO recommended the government asses the impact of the scheme on the housing market, amid initial fears it could lead to overheating.
The NAO report found the scheme had increased home ownership and the housing supply.
Through the scheme, home buyers receive an equity loan of up to 40% of the market value of eligible new-build homes with no interest for five years.