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Has it been of benefit?

By Shannon Lynch - 09 January 2018

The Government’s Help to Buy scheme has been a huge success with nearly a quarter of a million individuals, couples and families taking it up, around 80% being first time buyers.  

And it’s not just first time buyers who benefit. It is also available to existing homeowners, making a real difference to people needing to move to a bigger home because maybe they now have a young family.

Chancellor Philip Hammond was under pressure to give a longer term commitment to Help to Buy in his Autumn Statement especially as there was some lobbying for the scheme to be dropped.

Fortunately nothing came of that but although a year ago the Government announced an extension of the initiative up to 2021 it has always said it could close earlier ‘if all of the funding is taken up before’.

So with due deference to The Clash, Help to Buy, should it stay or should it go?

Help to Buy was a flagship policy of the Cameron/Osborne regime and In 2016 Hammond ended the Help to Buy mortgage guarantee just leaving the equity loan scheme in place.

There have been over 120,000 of these equity loans, giving buyers a loan of up to 20% towards their deposit on a new home, since the start in 2014.

Beresfords Director, Terry Holmes, says “With housing affordability being a real issue and deposits being the biggest barrier to those wanting to get a foot onto the housing ladder, Help to Buy has proved to be really valuable.

“We are all concerned about how younger people in particular can afford their own home. The ‘Bank of Mum and Dad’ has helped but only for those whose parents are affluent enough. Those that aren’t had little hope until Help to Buy came along and the fact that 4 out of 5 of those people were first time buyers shows that it has done the most good where it was most needed.”

It’s certainly proved popular at Hazelwood Park, a new development of fourteen 2/3 bedroom homes near Epping being marketed by Beresfords, where 50% of the buyers have used Help to Buy.

“We shouldn’t underestimate the importance of Help to Buy” added Terry Holmes. “We strongly advise our builder clients, regardless of their size, to register for Help to Buy at the earliest stage they can.

“Fortunately we’re very used to setting this up for our developers in conjunction with our mortgage side Flagstone, so we’re more than happy to meet with builders and advise on Help To Buy and the best mix on a site.”

Critics have suggested that the increased demand created has pushed prices up because the supply of new build has remained static but of course the Chancellor announced ambitious plans for 300,000 new homes in the Autumn Budget to tackle the chronic undersupply.

There’s no doubt that for a lot of the people that have taken up Help to Buy, it has meant the difference between owning their own home or being in a rented property and having little chance of saving for a deposit after the rent has been paid each month.

This was the case for our purchasers at our development Hazelwood Park. Harry along with this girlfriend, Kirsty and their daughter were renting their previous property with the plan to save for a deposit and purchase their perfect family home. However, it become clear that this would be difficult as the deposit for the properties they were interested in was just out of reach. Luckily with the Help to Buy scheme they have gained the extra funds needed to make their dream home a reality.  

Harry explains “The reason we chose the Help to Buy process was to ensure we would secure our dream property as we didn’t have the funds via our deposit on top of what our mortgage lenders would provide us with. The process was quite finicky as if there were any details which were slightly incorrect we would need to resubmit and await a further 3 working days for a response. However, that being said once the forms were completed in the correct manner they were quick to approve and release the relevant funds. Without the Help to Buy Scheme we would never of been able to get our house without years and years of saving for that large deposit which is now required.”

Stay or go was of course the Brexit question, but when it comes to Help To Buy, from us it’s definitely stay as we know it is a great tool for those looking for their dream home which may appear just slightly out of reach.

If you would like further information on how the Help to Buy scheme could be of use to you, contact your local Beresfords branch.