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The government’s unravelling Help to Buy scheme has proved better at putting money in developers’ pockets than getting first time buyers on the housing ladder, a charity has claimed.
According to Shelter, the tarnished scheme also appears to be more beneficial for higher earners rather than those on average incomes – the ones one would think are most in need of assistance.
Polly Neate, Shelter’s chief executive, slammed the scheme thusly: ‘Help to Buy is often touted by the government as a major success, when in truth it’s a major failure. It’s a policy that boosts the bank balances of big developers but has nothing to offer the average renter.’
Shelter’s analysis shows that only 4,142 households with incomes of £30,000 or less used Help to Buy in the last year - fewer than 0.2% of England’s private renting households in that income bracket.
Though the English Housing Survey puts the average private renting household at a gross annual income of £27,000, the average first-time buyer accessing Help to Buy has gross earnings of at least £50,000!
Meanwhile, Shelter says the scheme has been a goldmine for the country’s three largest housebuilders, with analysis of their annual reports showing Help to Buy has helped boost Persimmon, Barratt and Taylor Wimpey pre-tax profits. In fact, Barratt’s profits have rocketed 325% since Help to Buy’s 2013 introduction, Shelter says.
Shelter said: ‘The problem with the latest changes to Help to Buy is they’ll take already expensive homes and offer to spread out the costs over a longer period, which perversely ends up with the buyer paying more. Given there are millions of people who can barely afford to keep any kind of roof over their head, this piecemeal approach is never going to solve the housing emergency.
‘At the crux of this crisis is the desperate shortage of genuinely affordable social homes. In fact, three million more social homes are needed in the coming years. This is where the new government should be taking decisive action, and where the greatest opportunity to help trapped renters lies.’