Figures released by NatWest and RBS have revealed that 6,200 people have been able to buy their first homes and get onto the property ladder in the last year, thanks to the Help to Buy scheme. The scheme was designed to help those who couldn’t save for a 10% or more deposit, and the banks have praised Help to Buy for making property more accessible to younger buyers in particular. But there are still criticisms surrounding the number of new homes being built, and the fact that the average cost of houses bought through the scheme is £153,270, despite the average house price in Britain currently being £209,000.
Help to Buy can involve the government lending up to 20% of the value of a house, allowing lenders to offer 80-95% mortgages and helping those with a 5% deposit to buy. The scheme is currently for new-build homes only.
At the Liberal Democrat Conference in October, Chief Secretary to the Treasury Danny Alexander called for the government to act as a ‘commissioner for housing’ and to change its housing policy, as not enough affordable homes are being built to keep up with the demand. Alexander believes that the Government should set a target and step in if both the private sector and local authorities and housing associations failed to meet it. “You would have a capacity for the government to step in, to place orders, to pay contractors, build houses…”, he said, stressing a need for the government to be more proactive.
Shadow Chancellor Ed Balls also criticised the scheme in September, highlighting “the fundamental problem of the lowest level of house building since the 1920s”, and the fact that the government “can’t deal with the cost of living crisis without building more homes”. George Osborne’s response came soon after at the Conservative Party Conference in Manchester, where he used the plight of “families who have saved for years…but can’t possibly afford the deposit being asked by the banks these days” as his primary motivation for pushing the scheme, stressing that there was a great need for more accessible mortgages throughout Britain.