The programme gives cheap loans to those hoping to get on the housing ladder and is supposed to ensure they’re not put off by the cost of a deposit.
Help To Buy equity loans provide cash to homebuyers which enables them to own a property with a deposit of just 5 per cent.
Critics have said the scheme only helps the rich after it was revealed that much of the money available has gone to wealthy house-hunters with average salaries of £55,000.
The Government has now extended the programme for another two years – but this time, its equity loans will only be available to first-time buyers to stop rich housebuyers taking advantage of the scheme.
In efforts to better help first-time buyers struggling to get on the property ladder, the Government said it will also introduce new regional price caps on the value of a property you can buy using a Help to Buy loan.
These will range from £600,000 in London to £186,100 in the north east.
But the Government will scrap the scheme completely in 2023, Hammond announced in today's Budget.
Critics described the policy as "welfare for the upper middle classes" and called for it to be radically changed or even scrapped.
In London the average wage of Help To Buy claimants is now £72,000 – around three times the national average salary.
What other help is out there for first-time buyers?
Help to Buy Isa – It's a tax-free savings account where for every £200 you save, the government will add an extra £50. But there's a maximum limit of £3,000 which is paid to your solicitor when you move.
Lifetime Isa – Another government scheme that gives anyone aged 18 to 39 the chance to save tax-free and get a bonus of up to £32,000 towards your first home. You can save up to £4,000 a year and the government will add 25 per cent on top.
Shared ownership – Co-owning with a housing association means you can buy a part of the property and pay rent on the remaining amount. You can buy anything from 25 to 75 per cent of the property but you're restricted to specific ones.
"First dibs" in London – London Mayor Sadiq Khan is working on a scheme that will restrict sales of all new-build homes in the capital up to £350,000 to UK buyers for three months before any overseas marketing can take place.
Starter Home Initiative – A government scheme that will see 200,000 new-build homes in England to be sold to first-time buyers with a 20 per cent discount by 2020. To receive updates on the progress of these homes you can register your interest here.
Daniel Hegarty, CEO and founder of digital mortgage broker Habito, said: "Originally proposed as a ‘solve-all scheme’ that was going to fix the housing crisis for the younger generation, to date [Help to Buy] has been a mixed success at best.
"Despite the scheme helping many would-be homeowners get on the ladder and contributing to the building of more new homes, those using Help to Buy have been found to be paying almost 10 per cent more on average for their homes than those who don’t.
"Housebuilders have been accused of using the higher budgets of Help to Buy purchasers to justify higher property prices.
"Originally designed to help those in less fortunate financial positions, the scheme hasn’t quite worked as intended, with over a third of households using it found to be earning over £50,000 and data showing it has been used by movers to upsize.
"The new restrictions making it for first-time buyers only with regional price caps should provide a more targeted benefit to those who need it most."
Some of those using the scheme are drawing salaries of as much as £100,000, the Government admitted.
Critics have accused Help to Buy of helping to push up house prices, because it boosts demand for housing without doing anything to increase supply.
By March 2021, the government expects to have invested around £22billion in the Help to Buy scheme and claims to have helped 360,000 households buy a home.
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