The government has announced that it will invest a further £10 billion in the Help to Buy Equity Loan, due to the popularity of the scheme across the country.
More than 130,000 completions have already taken place by people using the equity loan, which helps people buy a new build home with only a 5% deposit.
The new funding means that the Help to Buy Equity Loan could help around 135,000 more people to buy homes by 2021. This would bring the total number of households across England that would be supported through the scheme since it began in 2013 to around 360,000.
However, the House Builders Association (HBA) has said that extending Help to Buy will not help to solve the most acute housing crisis in over seven decades.
The UK needs to build at least 800 homes each day to address demand, but only 190,000 homes were built in 2016/17 – a fraction of the 300,000 needed. The government should be implementing policies that encourage the construction of new homes, rather than opting for measures that will only stoke already increasing demand.
Rico Wojtulewicz, policy advisor for the HBA, said, “SMEs may require this extension of Help to Buy to reduce the risks with planning and land costs. This is because councils typically favour developments with Help to Buy and smaller developers can use the scheme to speed up the planning process.
Wojtulewicz continued, “Help to Buy is a symbol of failed housing policy. While it is helping people afford homes, the Government should be laser focused on building more homes and not just reheating policies that inflate demand. Enabling SME house builders to build more homes is the only way to address the housing crisis in a sustainable way that ensures growth across all regions.”