x
By using this website, you agree to our use of cookies to enhance your experience.
Graham Awards

TODAY'S OTHER NEWS

Bring back Help To Buy to combat soaring rents - legal call

A prominent property law consultancy wants Help To Buy, or similar schemes, to be resurrected. 

Dutton Gregory Solicitors says that with the Bank of England’s base rate rise to five per cent, soaring rents, and the cost-of-living crisis, now is the time to help first time buyers leave the rental sector and get on the property ladder.

Help to Buy closed to new applicants in England last year, with the final deadline to complete a purchase earlier this year. 

Advertisement

The most recent iteration of Help to Buy enabled first time buyers to borrow an equity loan to cover up to 20 per cent (or in London 40 per cent) of their property purchase price. The latest government statistics showed that 383,903 properties were bought using the scheme between 1 April 2013 and 31 December 2022.  

While there is a mortgage guarantee scheme and opportunity for a Lifetime ISA, there is currently no scheme backed by the government which offers the same accessibility and inclusivity that Help to Buy once did. 

The law firm says it is not uncommon for over 20 applicants to bid for each available private rental property, making a new Help to Buy-style initiative more important than ever.

It says some housebuilders could also offer their own private alternatives such as Proportunity, Fairview Homes’ Save to Buy scheme, and similar initiatives by St. Modwen Homes and Kettel Homes. Prior to the introduction of Help to Buy in 2013, Barratt and Bovis Homes also had their own versions, to help first time buyers with low deposits to purchase a new home. 

Paul Sams - partner and head of property at Dutton Gregory Solicitors - says: “The Help to Buy scheme was extremely beneficial to first time buyers, housebuilders, and the overall health of the property market. As it was self-funding, it should never have been scrapped. With interest rates now at their highest level for 15 years, it should be reintroduced as soon as possible. 

“First time buyers are finding it much harder now, so there is a danger of a generation of young people being denied accessible home buying opportunities. Meanwhile, the demand for rental properties far outweighs supply. Prior to a decade of Help to Buy, there was Home Buy Direct and First Buy, so how is it right that there is no longer a government initiative to make home ownership a possibility for those without a substantial deposit? 

“The government’s First Homes initiative enables first time buyers that meet local authority criteria to secure a home for 30 to 50% less than its market value, but there are so few of these homes available. As there is currently no sign of widespread first time buyer assistance on the horizon, the only way forward is for more housebuilders to introduce their own private schemes in order to convert those in the rental trap to new homeowners. 

“With a General Election on the horizon, I do believe the government will introduce a scheme similar to the previous Help to Buy within the next 12 months, but it’s needed now. Housing developers are lobbying for its resurrection, but will they step up with their own initiative in the meantime?” 

icon

Please login to comment

MovePal MovePal MovePal
sign up