CML’s Smee calls for Help to Buy to be axed after 3 years

Council of Mortgage Lenders director general Paul Smee says he sees no justification in Help to Buy being extended beyond its planned end point in three years’ time.

Giving evidence to MPs at a Treasury select committee today, Smee called on the Government to reveal its exit strategy for Help to Buy and ensure the scheme does not run beyond 2017, when the mortgage guarantee element of the scheme comes to an end.

When asked how the Government might taper the scheme, Smee suggested it could gradually increase the scheme’s fees, lower the maximum LTV and decrease the maximum loan size. He added this would avoid a “cliff-edge” scenario when the scheme ends. 

Smee said: “The taper should be determined soon. I am not saying when it should start, but before three years so that the scheme can close after three years, which I believe is the intention. I don’t think the [presence of] the scheme can be justified beyond the three-year point.”

Last week, Mortgage Strategy reported that economists had called for Help to Buy to be watered down in order to cool the market, after new data revealed house prices had risen over 7 per cent in the three months to November.