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Briefings

Member Briefing: Government announces cash injection to secure status of Help to Buy to 2021

Date: 02/10/17

Government announces cash injection to secure status of Help to Buy to 2021

The Prime Minister has announced £10bn of funding for the Help to Buy Equity Loan scheme to ensure its continued operation to 2021. The injection of resources, announced at the Conservative Party Conference, came as part of a package of measures designed to appeal to young voters.

The additional funding came as concern had grown about the impact that the scheme’s success was that resources were being depleted more quickly than had been expected, and after months of HBF urging the Government to signal its intentions on the matter. 

In his speech to the Conservative Conference in Manchester earlier today, Chancellor Philip Hammond confirmed that the additional funding would be used to ensure the scheme is resourced and able to continue until 2021. The previously announced budget for 2016 to 2021 had been £8.6bn. 

Mr Hammond said: 

“Help to Buy: Equity Loan has achieved much higher take-up than we expected, helping 130,000 families so far with a deposit for their own home. 

“This morning, the Prime Minister and I have visited two of them in their new home in Salford, hearing first-hand how Help to Buy made their dream of home ownership come true. But that success means the original funding allocated to the scheme will run out before the scheme was expected to end. 

“So today, I can announce an extra £10bn in funding to provide loans under the scheme through to 2021. Helping an estimated 130,000 more homebuyers over the next few years. Renewing our Conservative commitment to Britain’s property owning democracy for the next generation.” 

According to figures published by DCLG last week, the previous 12 months had seen £2.55bn spent on equity loans. The Homes and Communities Agency’s annual accounts, published during the summer, confirmed that having forecast 30,000 completions, the scheme actually supported more than 40,000 households to buy a home during 2016/17. Furthermore, the success of the London Help to Buy scheme, with 40% equity loans since last year saw uptake in the capital rise by 95% in Q2 2017 compared with the same period in 2016. Help to Buy completions in London now account for 10% by number but 25% by value of equity loans. 

HBF has been engaged with Government at various levels for the past 12 months, stressing the need for clarity, both on the position up to 2021, but also the future post-2021. On the latter point, we will continue to press ministers and officials on the benefits of indicating as soon as possible its intentions beyond March 2021. 

To highlight the benefits of the Help to Buy scheme for homebuyers and communities around the country, HBF last week published ‘Stepping Up’, exploring the economic benefits of the scheme to date. Its publication came as HBF published its latest Housing Pipeline study showing that the number of plots granted planning permission in the last 12 months reached the highest number since the quarterly research began in 2006.

 

David O’Leary

Policy Director