Editor's note: This brief was summarised by The Property AI Newsroom from a report by The Negotiator. Read the original article for full details.
Former Help to Buy Director Calls for Wider Focus in Any Successor Scheme
A revived version of the Help to Buy scheme would need to focus on a wider range of homebuyers, according to Chris Lee, Homes England's former director of the Help to Buy Equity Loan Scheme. His comments follow the Government's publication this week of a review of Help to Buy, amid calls for a new housing support scheme.
Lee, now Chief Executive of rent-to-own provider Own Homes, said any alternative should focus on deposit barriers for all types of borrowers across different property types. He argued that many aspiring homebuyers can afford the ongoing costs of homeownership but are locked out because they cannot build a large enough deposit while paying high rents.
What the Government Review Found
The review found the scheme was effective in supporting people into home ownership in some areas, but did not remove affordability barriers for first-time buyers in relatively expensive areas such as London. The scheme is estimated to have boosted property supply by 15% in its early stages, and analysis suggests buyers paid a 1% Help to Buy premium compared with similar new-builds outside the scheme.
The review concluded that Help to Buy was good value for money, generating an estimated net present social value of £25.1 billion in 2024-2025 prices. This came from increased housing supply and the repaid equity loan. Non-monetised benefits included improved customer wellbeing, employment benefits from building additional properties, and environmental benefits from the efficiency of new homes.
Weak Understanding and Redemption Problems
However, the review highlighted weak understanding of key equity loan terms, in particular interest payments and the fact that repayment is linked to the property's current value rather than its original value. The review stated that the scheme's redemption process was often described as a negative experience, due to managing multiple stakeholders, short valuation periods and poor communication from the loan administrator. Customers who were financially struggling or less informed reported more negative experiences, and the review stressed the importance of clear information for customers before and after entering any future scheme.
Lessons for a 'Help to Buy 2.0'
Lee said any Help to Buy 2.0 needs to learn from what worked but be more flexible and designed around today's deposit barriers. He warned that simply recreating the old model risks spending significant public money without fixing the broken parts of the housing ladder, and that success should be measured by how many people are genuinely helped into secure, affordable homeownership rather than by homes built alone.
The original Equity Loan scheme was open to all buyers of new-builds between 2013 and 2021, then restricted to first-time buyers with regional price caps between 2021 and 2023.
Source: The Negotiator