Popular Help to Buy scheme scraped by the government

185,000 UK home owners had benefitted from government Help to Buy schemes, which will now be scrapped by the end of 2016, writes property developer Richard Carr.

Prices

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How will scrapping the Help to Buy scheme effect first time buyers?

Despite the schemes proving popular amongst first time buyers, the initiatives haven’t helped solve the country’s growing housing crisis, which the new government led by Theresa May are keen to do.

According to one estate agent emoov.co.uk, the average house prices across half of the country’s 326 districts will exceed the Help to Buy threshold by March next year.

As a result, Chancellor Philip Hammond confirmed that the scheme will close to new mortgages on 31st December 2016.

Rent vs Ownership

Richard Carr believes it’s clear that the government are keen to promote build-to-let properties, which is an easier win that chasing increasing house prices.

Russell Quirk, the Founder and CEO of eMoov, told landlordnews.co.uk: “On the face of it, it might seem like bad news for would-be homeowners, however, the failure of the Help to Buy scheme has been pretty monumental in addressing the growing housing crisis.”

He continues: “Today’s announcement by Philip Hammond marks a significant change in the ideology of this new Prime Minister and her Government – an ideology that clearly does not share the Cameron/Osborne love affair with aspirational homeownership.

“This complete reversal could be seen as a real retrograde step and now leaves several hundred thousand would-be homebuyers that could benefit from the Help to Buy scheme, particularly those first time buyers, without the assisted first rung of the property ladder to step on.”

Reversal

The move is a sharp U-turn from the previous government who introduced and championed the many Help to Buy Schemes.

However, the government’s record a delivering new property hasn’t been overly successful and with the housing crisis getting worse by the month, a move to try and rectify it should be commended.

If the government does managed to balance out supply vs demand then house prices should drop, meaning that it’s easier for first time buyers to get onto the property ladder.