Help to Buy extended to 2023 in Budget amid calls for reform

Help to Buy has been extended to 2023, Chancellor Philip Hammond confirming in his 2018 Budget speech that finance for the initiatives will be put in place. However, a new poll of finance brokers has called for Help to Buy to be restricted to first-time buyers.

United Trust Bank (UTB) surveyed 180 brokers and almost half (41 percent) say the scheme should be restricted to those who have never owned a property before.

The survey results revealed that almost a third (27 percent) say Help to Buy should be offered only to buyers with an annual household income of less than £75,000 in London and £60,000 in the rest of the UK.

Restrict scheme to 1st-time buyers

Help to Buy has been in operation since 2015. On Monday, during his Budget speech in the House of Commons, Mr Hammond confirmed the scheme, due to end in 2021, will be extended until 2023.

Help to Buy schemes include tax-free savings and shared ownership and they are on offer both to first-time buyers and to homeowners.

Other Budget announcements to help the housing market included expanding the Stamp Duty Land Tax relief for first-time buyers to include shared ownership properties worth up to £500,000 (backdated to the date of 2017 Budget) and extra cash for the Government’s £44 billion housing infrastructure fund.

Positive effect on housing market

Mr Hammond told MPs that 121,500 first-time buyers had used Help to Buy since its inception.

When quizzed by UTB, the brokers said 56 percent of Help to Buy schemes had had a positive impact on the UK residential property market with only 11 thinking it had largely been negative.

Noel Meredith, executive director at UTB, said: “HTB has assisted thousands of people who may otherwise have been unable to get on to the property ladder to buy their own home.

“It has also provided support to developers, many of them SMEs, by offering their prospective purchasers a tangible financial helping hand, and I have no doubt that HTB has boosted activity in the starter homes sector and encouraged house builders to develop more of the homes we need to overcome the UK’s housing shortage.

“Some of the suggestions for changes to the criteria make sense. Much of the criticism of HTB has come from the view that some of the people taking advantage of it are not the originally intended beneficiaries of the scheme.”