Value of government’s £22bn Help to Buy scheme ‘uncertain’
MPs have raised alarm bells over the government’s costly Help to Buy scheme, noting that more than half of those it helped did not need financial support, while warning it does not address structural problems in the housing market.
The scheme, which will cost an estimated £22bn – more than eight-times its original budget, has offered “uncertain” value, the report, by the influential Public Accounts Committee found.
Around three-fifths of those who bought a property using the scheme did not need the loan, the committee said.
And while the scheme has increased housing supply by an estimated 14 per cent, it does not address issues with the wider planning system, or other problems in housing, such as the provision of affordable housing and rising levels of homelessness. There is also no plan in place to prevent a fall in supply when the scheme ends in 2023.
The report, which has made a series of recommendations to be carried out before the end of the scheme, also warned the Department for Housing, Communities and Local Government is at risk of losing its investment in homes if house prices fall.
PAC chair and Labour MP Meg Hillier said the scheme had “increased the supply of new homes and boosted the bottom line of house builders” – but said longer-term problems remained.
“Help to Buy, as the Department acknowledged, only benefits those in a position to buy their own house in the first place,” she said. “It does not help make homes more affordable nor address other pressing housing problems in the sector such as the planning system or homelessness”.
“The scheme exposes both the government and consumers to significant financial risks were house prices or interest rates to change. Better consumer protection needs to be built into similar schemes in the future”.
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