The Government is considering an extension to the Help to Buy scheme as part of a range of measures to get the industry building houses again once the current lockdown imposed by coronavirus has relaxed.
According to a report in The Times, officials are fearing that the shutdown of construction work and sales offices during the Covid-19 pandemic will have a long-term impact on the housing market.
The report quoted estimates from Savills that suggested builders have “downed tools” on sites where they could construct approximately 200,000 new homes – equivalent to almost a year’s supply.
The Government has previously confirmed it will extend its Help to Buy equity loan scheme from 2021 to 2023, although this extension will be restricted to first-time buyers purchasing newly built homes. From next year as it stands, there will also be new regional price caps which could reduce the maximum value of homes that can be bought through the scheme.
Responding to the news of a possible further extension to the scheme beyond 2023, AmTrust Mortgage & Credit business development director, Patrick Bamford, commented: “It is perhaps not surprising given the current situation and the fact the Help to Buy Scheme is already in place, that government officials are eyeing up an extension.
“However, this will require further taxpayer support at a time when the nation's finances will already have taken a significant hit in order to, quite rightly, help individuals and businesses through this period.
“In those circumstances, it might be far more prudent for the Government to utilise a viable private alternative to Help to Buy which currently exists, can be actively utilised by lenders and would mean no further calls upon the taxpayer to subsidise the purchase of these new-build homes. At some point in the future, the industry has to fend for itself.
“If the Government does wish to extend, then there are very good reasons why the builders and developers concerned should take on a far greater percentage of the risk than they currently do, and that this should not be put purely on the UK taxpayer.”
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