To ask Her Majesty’s Government what assessment they have made of the level of take-up, and effectiveness, of (1) the Help to Buy, (2) the Starter Homes, and (3) other shared ownership, schemes.
Answered on
12 December 2016
Help to Buy: Equity Loan has been available across England since April 2013. It is intended to increase housing supply and promote home ownership and in particular it can help homeowners who cannot afford a large deposit but can afford regular mortgage payments. The scheme offers an equity loan of up to 20 per cent (up to 40 per cent in London) and enables people to buy a home with a deposit as low as 5 per cent. Across England, over 91,000 households have purchased a home through the scheme to end June 2016, of which 81 per cent were first-time buyers. In the 2016 Autumn Statement, the Chancellor confirmed continued support for home ownership through the Help to Buy: Equity Loan scheme.
Help to Buy: mortgage guarantee has been available across the United Kingdom since October 2013. It enables people to purchase a home with an 80-95 per cent mortgage. Across the United Kingdom, over 86,000 households have purchased a home through the scheme to end June 2016, with 79 per cent of sales to first-time buyers. Help to Buy: mortgage guarantee was introduced as a temporary intervention to increase the availability of high loan-to-value loans, following a drop off in the years after the financial crisis. The Bank of England Financial Policy Committee’s annual assessment of the scheme in September 2016 confirmed that the scheme had been successful in returning confidence to the mortgage market and it is due to close to new loans at the end of December 2016.
Help to Buy: ISA is available across the United Kingdom and enables people to save toward their first home. The government offers a 25 per cent bonus on savings, up to a maximum of £3,000 bonus. Over 15,000 Help to Buy: ISA bonuses have been claimed to the end of June 2016, which has supported more than 11,000 home purchases.
We are committed to building starter homes with a minimum 20 per cent discount for first-time buyers between the ages of 23 and 40 to help them into home ownership. Over the last twenty years, the proportion of under 40 year olds who own their home has fallen by over a third from 61 per cent to 38 per cent. We have made strong progress on delivery, through the Housing and Planning Act, planning reforms, and working through the Homes and Communities Agency to deliver the first starter homes. We expect the first starter homes to start being built in 2017.
Help to Buy: Shared Ownership enables people to part-buy, part-rent a home, starting with a minimum 25 per cent share, with the option of moving up to 100 per cent ownership. Since 2010, around 45,000 new Shared Ownership homes have been delivered.