An official government review has concluded that the previous Help to Buy scheme, designed to assist first-time buyers, provided 'very high value for money.' The audit calculated that the program generated an estimated £25 billion in social value for the UK in the last financial year. These findings are bolstering arguments from senior government figures, including Housing Minister Matthew Pennycook, who are advocating for a new iteration of the scheme to be introduced by the Labour government. Pennycook and former Housing Secretary Steve Reed reportedly pushed for this, although former Chancellor Rachel Reeves prioritized boosting housing supply over reintroducing demand-side incentives.
The original Help to Buy scheme, active from April 2013 to March 2023, supported the purchase of over 387,000 properties, with 328,000 by first-time buyers. The total value of equity loans issued through the program was £24.7 billion. The evaluation found that the scheme successfully expanded homeownership, particularly in more affordable areas, and significantly increased new housing supply across England by about 15%. This increase was driven by enhanced market confidence among both buyers and developers, especially during the scheme's early phases.
Despite the positive review, the current Labour government's stance on a new Help to Buy scheme is not entirely clear-cut. While some officials favor a revival to stimulate demand and housing construction, Chancellor John Healey and Prime Minister Andy Burnham are also focusing on increasing housing supply through the construction of social and affordable homes, with £39 billion earmarked for this purpose. This dual approach reflects a tension between demand-side stimulus and direct supply-side interventions, with the potential for a new scheme that also incentivizes private demand and supply at a lower cost to the Exchequer.
