Rishi Sunak PM has vowed to launch a “new and improved” version of the Help to Buy equity loan scheme if the party were to win the General Election.
The scheme previously ran between 2013 and 2023, and facilitated the availability of 95% mortgages via a 20% government equity loan on new builds.
Between 2021 to 2023 the interest rate paid on the equity loan from the sixth year onwards increased by CPI inflation plus 2%.
The announcement drew a mixed response.
John Phillips, chief executive of Spicerhaart and Just Mortgages, said: “Many across the industry have long called for a return to Help to Buy. While opinion is split on its legacy, there’s no denying its success in getting people onto the housing ladder.
“In its absence, Shared Ownership has become the only way for many to make their dreams a reality – especially in the current climate with clear affordability pressures. If successful, I’d like to see this include second-hand properties to increase the options available to first-time buyers.
“We have all seen the impact a stamp duty cut can have – both positively and negatively. While this certainly does drum up demand and help with affordability, a permanent removal is the only way to avoid a cliff edge deadline like ones previously seen, which gummed up the wheels of the entire sector and caused incredible stress and strain.”
Others seem more hostile.
Nathan Emerson, chief executive at Propertymark, said: “Ultimately, we need a fully robust supply of new sustainable housing that is keeping pace with an ever-growing demand.”
And Polly Neate, chief executive of Shelter, said: “Help to Buy has been proven to do more harm to our housing system than good. Not only does it drive up house prices and help only a small minority of people, it ultimately takes money away from building genuinely affordable housing.”
The party also launched a housing target of building 1.6 million homes in five years, something that’s likely to ring hollow given the party’s failure to reach its housebuilding targets – which were eventually scrapped – throughout the last parliament.
Similarly the Conservatives have pledged to abolish Section 21 evictions for the second manifesto running.