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19/09/2019

MPs hit out at Help to Buy for failure to tackle pressing priorities

Words: Huw Morris

The government’s flagship Help to Buy scheme has not tackled pressing problems in the wider planning system and housing sector, according to an influential committee of MPs.

The Public Accounts Committee criticised Help to Buy for not making homes more affordable for society in general, as the Ministry of Housing, Communities and Local Government (MCHLG) acknowledges that the scheme has only benefited those who were already in a position to buy a home.

The policy did increase the supply of new homes by 14 per cent and boosted the housebuilding sector after the 2008 crash, said the committee. Around 1,600 small and medium-sized developers have used the scheme to date and the policy has been “more successful than previous schemes with similar aims”.

By December 2018, the scheme had supported 211,000 households to buy properties through loans totalling £11.7 billion. Some 37 per cent of buyers said they could not have bought a property at all without the support of the scheme. However, this implies that around three-fifths of buyers did not need the support of the scheme, said the committee.

And about 20 per cent of people who used the scheme were not first-time buyers. From 2021, the housing department will restrict the scheme to first-time buyers, and is introducing lower regional price caps.

Members accused the department of having no integrated and coherent plan for achieving its pledge to deliver 300,000 new homes a year from the mid-2020s. The increase in housebuilding generated by the Help to Buy is one of the ways in which the government aims to increase the supply of new homes, but it is unable to quantify how much the scheme would contribute to the 300,000 target.

The committee noted that the department is winding down the scheme from 2021, but has not estimated the expected drop in housing supply when the scheme ends in 2023, nor does it have a clear plan for offsetting this drop. Members “remain unconvinced” that its many housing initiatives are fully aligned with one another to form a cohesive strategy for achieving the 300,000 target.

The scheme does not address issues with the wider planning system or other housing problems in housing, such as the provision of affordable homes and rising levels of homelessness, added the committee.

“Help to Buy has certainly increased the supply of new homes and boosted the bottom line of housebuilders,” said committee chair Meg Hillier. “But it has also tied up a large sum of money, nearly £22 billion in cash terms by the time it concludes, making the value of what has been achieved uncertain.

“While many people have been helped to buy properties who would have not otherwise been able to, an even larger group of buyers did not need its financial support.”

Image credit | Shutterstock 

 

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