" Builders and developers who have benefited considerably from the Scheme now need to do more, especially when considering a non-State backed solution to the supply shortage."
You might argue that, with the debate over the Brexit negotiations dominating proceedings, there would be little space for any meaningful policy presentations but we must not forget that a number of commentators believe a General Election could be on the cards (again) very soon and therefore these forthcoming conferences could be pivotal. The state of the main political parties leading into any such election would be another matter entirely, especially if there has been ‘uproar’ over the Brexit deal on the table.
In light of this, it has been a little bemusing to see the recent focus on the future of the Help to Buy scheme, especially when the Westminster rumour mill appeared to be suggesting its days were numbered. Reading those initial reports, and knowing how much of a success it is considered by both the Conservative Party and indeed housing developers, I couldn’t quite believe that it would be jettisoned and so it has proven.
Indeed, the recent announcement that it is likely to be extended until 2023, two years past its previous end date meaning it would have been active for a decade, was much more in keeping with my take on the political cache it affords this Government.
Clearly, there are some criticisms which could have dented the Scheme’s credibility and there are some suggestions it will be tweaked much more in favour of first-time buyers with a certain level of household income, but overall when it comes to how it has helped tackle some of the housing supply problem, it must still be thought of as a major success.
Other criticisms are perhaps easier to shrug off – has the Help to Buy scheme overly-inflated house prices? I would think not – indeed house prices appear to be only very marginally creeping up according to recent indices. Has it allowed too many ‘richer homeowners’ to trade up? Not really - 6,717 households with a six-figure income have used the scheme out of 170,000, while it’s thought 32,000 have traded up. However, what are they trading up from? Starter homes? Second-hand homes that could then be bought by first-timers? We need a fluid market where trading up is a constant otherwise that supply-side gap gets even bigger. In my view Help to Buy should be available for second-steppers and the like.
Has it merely boosted the share price of developers/house builders? Of course, but the Government put all its eggs in the baskets of the bigger developers, because (with some notable exceptions) that appeared to be the only game in town.
However, there is also a strong argument to suggest that the builders and developers who have benefited considerably from the Scheme now need to do more, especially when considering a non-State backed solution to the supply shortage. To my mind, they should not simply be waiting around for the Scheme to be perpetually extended, or become a permanent part of the market, but they need to put something back in.
Could they put more into the communities where these major developments have been built? I appreciate that this should have been part of the Help to Buy planning proposal – and some might say DCLG/MHCLG have missed a trick here – but there needs to be more tangible benefits seen from these developments, plus (as mentioned) a focus on deriving solutions of their own, especially if in the future it is desired that the taxpayer should no longer be subsidising such builds. Their shareholders have done very well out of Help to Buy but this can’t be perceived as a bottomless well that they can keep returning to.
What also makes this period interesting of course is that the first generation of Help to Buy purchasers are now reaching that five-year mark when they have to pay interest on their Help to Buy loans, plus – and this has been an issue for some time – there is always market chatter around whether we have a strong enough Help to Buy remortgage market for those who would like to change their product but still have that loan in place. Perhaps there needs to be more Government intervention here in order to encourage lenders in this part of the market?
In that regard, Help to Buy shouldn’t just be reviewed on its upfront successes, it has to maintain its credibility and its ability to allow homeowners who took part in the scheme to continue getting access to the loans they need.
Overall, however, I think few would have anticipated a scheme that has been a central plank of the Government’s housing strategy, and which has resulted in so many related offshoots, to have been dumped especially when it has undoubtedly delivered. Its extension to 2023 appears assured and you wouldn’t bet against the life of the scheme being extended further into the future, regardless of which party is in Government.
