The government’s Help to Buy scheme could be axed amid fears it is benefiting wealthier households and pushing up house prices.
Ministers are set to launch a ‘fundamental review’ of the policy that could see it replaced by a scheme that better targets those struggling to get their foot on the property ladder.
It comes as recently published research revealed that one in five households on Help to Buy have used it to upgrade their home rather than purchase their first house.
Ministers are set to launch a ‘fundamental review’ of the policy that could see it replaced by a scheme that better targets those struggling to get their foot on the property ladder
It comes as the government faces mounting pressure from mortgage lenders and property developers to announce plans to finance the policy beyond 2021, when the current tranche of funding runs out.
However, the Daily Telegraph has revealed that ministers are weighing up a temporary extension to take it beyond 2022, though it could be a restricted version of the scheme.
It comes as critics last month claimed Help to Buy was failing to help people who needed it most.
Sam Dumitriu, Adam Smith Institute’s head of research, said: ‘The fundamental problem is a lack of supply, but Help to Buy does not address that.
It doesn’t make sense for taxpayers to be paying for something that is going to people who are well off.’
Housing analyst Anthony Breach, of the Centre for Cities, added: ‘We need to be releasing more land near train stations and areas where there is already infrastructure.’
It comes as recently published research revealed that one in five households on Help to Buy have used it to upgrade their home rather than purchase their first house
Professor Danny Dorling, an Oxford University housing expert, said: ‘When house prices fall, part of the reason will be Help to Buy artificially inflated their value.’
Almost 170,000 families have now taken advantage of Help to Buy since its launch in 2013. That has seen the Government provide more than £8.9billion of support, with the scheme extended to last until 2021 and an additional £10billion pledged.
The average cost of a home bought through the scheme outside London was about £250,000, with the average loan handed out worth £52,800.
Of the families who used the scheme, 136,700 were first-time buyers. A fifth of families using the scheme were not first-time buyers.