Renters doubt long-term benefits of Help to Buy

Around a third of those renting are critical of the government’s Help to Buy scheme — and are concerned that it will leave them priced out of the property market.

This government-backed scheme is designed to help first-time buyers by offering interest-free five year equity loans for those buying new build properties – so reducing the amount needed for a deposit.

But a new YouGov survey – on behalf of the HomeOwners Alliance and BLP Insurance – found that while two thirds were broadly supportive of this initiative, there were a number of criticisms of the scheme. 

Many pointed out that it has caused property prices to rise, particularly in the new build sector, so benefitting property developers rather than prospective first-time buyers. Those surveyed also said that while this scheme was a good idea in theory, it  had failed to deliver in practice, due to continued supply issues in the housing market.  There were also criticisms that it forced people into leasehold properties.

The survey also found that a similar lack of enthusiasm for others schemes designed to help first time buyers. 

Around a third of those renting said they did not think shared ownership was a good idea. In total less than half of UK adults thought it was a viable and attractive alternative to renting. The scheme was criticised because it often involves rent, mortgage and “extortionate” leasehold payments.

The survey found a pessimistic view of the housing market as a whole, with the majority of those now renting in the UK, saying they did not think they would ever be able to afford their own home.  In addition the survey found that around a third of renters (35 per cent) reported to living in poor quality properties. 

Despite these views, Help to Buy has proved to be a popular scheme. According to government figures between 1 April 2013 (when the scheme was launched) to 30 June 2018, 183,947 properties have been bought using the HTB equity loan scheme, with first-time buyers making up 81 per cent of this.

HomeOwners Alliance chief executive Paula Higgins says: “HTB continues to be a popular scheme despite fundamental leasehold problems. Shared ownership has also lost some of its shine.”

BLP chief executive Kim Vernau says: “With no quick fix to the problems plaguing the housing market, a pragmatic approach that tackles issues from multiple directions is necessary. 

“As potential first-time buyers continue to struggle to gain access to homeownership, it’s vital that real progress is made towards improving rental conditions. The continued momentum of the Build to Rent sector is encouraging as it has a crucial role to play, with numerous advantages for tenants, from cheaper access and longer tenancies to far greater accountability on the part of the housing provider.

“At the same time, freeing up housing stock for young families by incentivising elderly people to downsize from larger family homes remains a persistent challenge. 

“The clear solution is to improve the quantity and quality of purposely built housing available to last-time buyers, which can also cater more appropriately to their needs later in life.”


Competition intensifies with 5,000 mortgage deals now available

Competition in the mortgage market has intensified over the past 12 months, with more than 5,000 products now available — an increase of almost 10 per cent on the previous year.  This has had a knock-on effect on pricing, with rates for both two- and five-year fixes falling, according to the latest data available from […]

Neptune Global Income: Is Japan the best dividend market in the world?

By George Boyd-Bowman, Fund Manager at Neptune The Neptune Global Income Fund seeks exposure to the very best – and often overlooked – income opportunities from across the world. Unconstrained by benchmarks, the fund currently has 24 per cent invested in Japan, differentiating the high conviction portfolio from many of its peers. Watch Neptune Fund […]


News and expert analysis straight to your inbox

Sign up