On Saturday 26 September, the government announced the revival and reform of the ‘Help to Buy’ scheme, which is designed to help young people get on the housing ladder.
The government has stated that the scheme is expected to support a 2.5 per cent deposit for prospective first-time buyers purchasing a new-build property.
This will help to “tackle the deposit-barrier for first time buyers” and act as a “much needed stimulus to support the (housing) market.”
This policy expands on a previous scheme known as ‘FirstBuy,’ under then-chancellor George Osbourne in 2013, which offered a five per cent deposit and ran until 2023. An evaluation on the success of the scheme noted that it “was effective in supporting people into home ownership… but did not remove affordability barriers for first-time buyers.”
When unveiling the plans ahead of the Labour Party’s conference in Liverpool, Housing Secretary Angela Rayner claimed that the new scheme would “build on the lessons learned from previous schemes, while retaining the benefits.”
While most details will be clarified in the upcoming Autumn Budget, the immediate impact of the policy has seen a surge in the shares of home building companies on the stock market, such as Persimmon Plc, which is up 15 per cent since the policy was announced.
One young Labour Party member noted that while this policy will make access to deposits easier for young people, “it will not translate to cheaper price-tags for houses”, as seen through the fact that house prices have surged by approximately 64 per cent on average since 2013, thus extending mortgages, raising interest payments, and “harming the economy.”
Image by Tierra Mallorca on Unsplash
