Resurrect Help to Buy before the 2024 General Election, reports Dutton Gregory Solicitors
Dutton Gregory Solicitors are urging the government to resurrect Help to Buy before the 2024 General Election.
Property conveyancers across the UK are working towards the 29th September final date for Help to Buy Agents to handover all paperwork connected with the scheme to Homes England. With housebuilding currently high on the political agenda, national law firm Dutton Gregory urges both major political parties to support the resurrection of Help to Buy during the autumn party conferences.
The Bank of England’s next interest rate decision is set for 21st September. While mortgage lenders are keen to lend and have reduced their rates from the summer peak, the hopes of a reduction from the current 5.25% base rate may be scuppered by the recent inflationary hikes in petrol and diesel. The continued cost-of-living crisis, significant planning delays, and the slowdown in the property market will result in the current government missing its own housebuilding target by a significant margin.
Unprecedented pressure on the rental market is being created as swathes of buy-to-let landlords exit the market, while few new landlords are entering it. Many would-be first time buyers are having to put their dreams of home ownership on hold, creating further demand for rented homes, where it is not uncommon for over 20 applicants per available property. Dutton Gregory Solicitors is calling for the reintroduction of the government’s Help to Buy initiative to stimulate the first rung of the market.
Government key worker loans could work in a similar way and demonstrate meaningful support to public sector workers. Housebuilders could also offer their own private alternatives, such as Proportunity, Fairview Homes’ Save to Buy scheme, and similar initiatives by St. Modwen Homes and Kettel Homes. Prior to the introduction of Help to Buy in 2013, Barratt, Bovis Homes and many others also had their own versions, open to help first time buyers with low deposits to purchase a new home.
Paul Sams
Paul Sams, Partner, and Head of Property at Dutton Gregory Solicitors, said:
“The Help to Buy scheme was extremely beneficial to first time buyers, housebuilders, and the overall health of the property market.
“As it was self-funding, it should never have been scrapped.
“The 29th September final handover deadline for Help to Buy Agents will conclude the decade-long initiative, which has had a widespread impact on the economy and the opportunities available to all those wishing to get on the property ladder.
“With interest rates at their highest level for 15 years, Help to Buy should be reintroduced as soon as possible.
“The autumn party conferences present a high-profile opportunity for some vote-winning initiatives to be announced – 12 months ahead of when the 2024 General Election is anticipated.
“At present, there is a real danger of a generation of young people being denied accessible home buying opportunities.
“Meanwhile, the demand for rental properties far outweighs supply.
“Prior to a decade of Help to Buy, there was Home Buy Direct and First Buy, so how is it right that there is no longer a government initiative to make home ownership a possibility for those without a substantial deposit?
“The government’s First Homes initiative enables first time buyers that meet Local Authority criteria to secure a home for 30% – 50% less than its market value, but there are so few of these homes available.
“Unless there is a new prospect of a widespread first time buyer assistance on the horizon, the only way forward is for more housebuilders to introduce their own private schemes in order to convert those in the rental trap to new homeowners.
“I do hope both the Conservatives and Labour will table a scheme similar to the previous Help to Buy within the next 12 months, but it is needed now.
“Housing developers have been lobbying for its resurrection – should they step up with their own initiative in the meantime when housing is such a national issue?
“Should it be for the developers to decide this, or the political leaders of this country.”
Help to Buy closed to new applicants in England last year, with the final deadline to complete a purchase having now passed. The most recent iteration of Help to Buy enabled first time buyers to borrow an equity loan to cover up to 20% (or in London 40%) of their property purchase price.
The latest government statistics showed that 383,903 properties were bought using the scheme between 1 April 2013 and 31 December 2022. While there is a mortgage guarantee scheme and opportunity for a Lifetime ISA, there is currently no scheme backed by the government which offers the same accessibility and inclusivity that Help to Buy once did.
Hampshire-headquartered Dutton Gregory Solicitors is a full-service national legal firm for private and corporate clients. The multi-award-winning practice has offices in Bournemouth, Chandler’s Ford, Poole, Liverpool, London, Winchester, and Woking.
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