A new Help to Buy needs better buyer focus, former boss warns

A revived version of Help to Buy would need to focus on a wider range of homebuyers, a former director of the scheme has claimed.

Chris Lee (pictured), Homes England’s former director of the Help to Buy Equity Loan Scheme said any alternative should focus on deposit barriers for all types of borrowers for different property types.

It comes as a Government published a review of Help to Buy this week and there have been calls for a new housing support scheme.

Any Help to Buy 2.0 needs to learn from what worked, but it also needs to be more flexible and designed around the barriers buyers face today – the deposit.”

The first iteration of the Help to Buy Equity Loan Scheme was open to all buyer for new-builds between 2013 and 2021 and was later restricted to first-time buyers with regional price caps between 2021 and 2023.

Lee, who is now Chief Executive of rent-to-own provider Own Homes, says: “The Help to Buy: Equity Loan scheme did an important job and the review shows the value it delivered.

“The challenge now is not simply helping people access a new-build home. We have a much wider group of aspiring homebuyers who can afford the ongoing cost of homeownership but are locked out because they cannot build a large enough deposit while paying high rents.”

Help to Buy review

The Government’s review found the Help to Buy scheme was effective in supporting people into home ownership in some areas, but did not remove affordability barriers for first-time buyers in areas that were already relatively expensive such as London.

The scheme is estimated to have boosted property supply by 15% in the early stages.

The analysis also suggests there was a 1% Help to Buy premium paid by buyers compared with similar new-builds outside the scheme.

The review concludes that Help to Buy was good value for money.

It is estimated to have generated a net present social value of £25.1billion in 2024-2025 prices. This comes from increasing housing supply, which benefits society, as well as the equity loan that is repaid.

Wider non-monetised benefits included improvements in wellbeing for Help to Buy scheme customers, employment benefits by building additional properties and the environmental benefits from efficiency of new homes.

However, the review highlights that understanding of key equity loan terms was weak, in particular, interest payments and repayment linked to the property’s current value, not the original value.

The scheme’s redemption process was often described as a negative experience.”

The review says: “The scheme’s redemption process was often described as a negative experience, due to having to manage multiple stakeholders, short valuation periods and poor communication from the loan administrator.

“Customers who were financially struggling, less informed of the scheme or less confident in managing their financial commitments to the scheme reported more negative experiences of the Help to Buy scheme. Therefore, it continues to be important to provide clear information to customers before and after they enter any future such scheme.”

Flexibility needed

Lee adds: “Any Help to Buy 2.0 needs to learn from what worked, but it also needs to be more flexible and designed around the barriers buyers face today – the deposit. Simply recreating the old model risks spending significant public money without fixing the parts of the housing ladder that are currently broken.

“We also need more homes, but supply alone will not solve the problem. Government also needs credible routes into ownership, so success should be measured not just by how many homes are built, but by how many people are genuinely helped into secure, affordable homeownership.”

The post A new Help to Buy needs better buyer focus, former boss warns appeared first on The Negotiator.

Author: Gemma