Could Help to Buy make a return?

Brokers discuss whether it would be a good option

Could Help to Buy make a return?

Housebuilder Crest Nicholson highlighted in its latest trading update that additional mortgage borrowing for those looking to upgrade, or for those with low levels of equity, has become significantly more expensive with no government support, following the end of Help to Buy.

Speaking to news agency, Newspage, some brokers warned against a return of the scheme, while others have suggested a ‘sudden reappearance’ cannot be ruled out ahead of a General Election.

Help to buy: Last thing the market needs

Lewis Shaw (pictured left), owner and mortgage expert at Shaw Financial Services, said the last thing the property market needs right now is more free money going into the system.

Shaw believes the market must be allowed to find its natural equilibrium without further interference from the government.

“It is not going to be pretty, but the sooner the day of reckoning is upon us, the sooner we can start to come out the other side,” Shaw added.

Stephen Perkins, managing director at Yellow Brick Mortgages, said Help to Buy, while helping first-time buyers achieve a property they could otherwise not have afforded, was really of most benefit to housebuilders.

“This gravy train allowed great demand for their homes, and affordability was boosted enabling more premium sale prices,” he added.

Overall, Perkins said the scheme probably did more damage than good with the increases in house prices that it brought about.

“I do not think new homes should be incentivised over the second-hand market; new homes should boast many benefits such as efficiency, shiny new tech and customisation, without winning market share as being the only affordable home due to government support,” he said.

Instead, Perkins would like to see a similar equity scheme for deposit boosting first-time buyers, only on any property across the housing market as a whole.

Influence of the election

Rhys Schofield (pictured right), brand director at Peak Mortgages and Protection, said it is apparent without some sort of government intervention, the prospect of building enough houses in the UK to keep up with demand is an even more distant prospect.

“The government is in full-blown ‘circle the wagons mode’ with a General Election next year,” he stated.

However, at this point, Schofield said first-time buyers likely would not vote for them anyway, but he added that the NIMBY (not in my backyard) voters who want to pull the ladder after themselves might.

“I do not think we will see much support for building or supporting first-time buyers from the government in the near future,” Schofield said.

Meanwhile, Darryl Dhoffer, mortgage expert at The Mortgage Expert, disagreed with Schofield, and said the reintroduction of Help to Buy may be used to incentivise voters.

With all eyes on a possible General Election in Spring 2024, he believes it is possible both the Conservatives and Labour will use the reintroduction of Help To Buy as part of their manifestos to get voters onboard, and help boost the flagging new build market.

“This year has been very much focused on consolidation and cuts to tackle high inflation and restrict consumer spending, so do not bet against Help To Buy making a sudden reappearance,” he added.

Could you see a reintroduction of Help to Buy and how would this impact the market? Let us know in the comment section below.