Government contemplating revival of Help to Buy scheme?
The end of the Help to Buy scheme has led to a significant drop in first-time buyers looking to purchase their first home, with a 49% decrease reported in July 2021 [1]. This scheme, which enabled buyers to own a property with just a 5% deposit, came to an end in 2022.
To address this housing market challenge, party leaders and policymakers in England are considering long-term solutions centered around stabilizing housing delivery. These solutions aim to improve access to homeownership by supporting smaller developers (SMEs), implementing planning reforms, investing in infrastructure, and making financial regulatory changes [1].
One company that is already making strides in this sector is SOWN, part of the Leaders Roman Group, which offers both new-build and re-sale properties under the shared ownership scheme. However, demand for shared ownership properties continually exceeds supply [2]. This scheme remains limited to households with a maximum income of £80K (£90K in London) [3].
In the last decade, the number of private renters moving into home ownership fell by 23%, highlighting the need for solutions that make homeownership more accessible [4]. Shared ownership, due to rising house prices, interest rate rises, and increased costs of living, is becoming a popular alternative for many people [5].
The role of smaller, more agile developers in unlocking housing supply, especially on smaller or complex sites, is increasingly recognised [1]. Planning reforms are advancing to support SME-led housing delivery, with calls for a stable development pipeline, planning certainty, and regional investment [1].
Industry bodies such as RICS advocate for a “mission-driven” housing strategy that ensures consistent reforms, supports SMEs, and integrates infrastructure planning to secure sustained housing supply improvements [1]. The Financial Conduct Authority (FCA) is reviewing mortgage affordability assessments to ease borrowing constraints, aiming to make homeownership more accessible while maintaining financial stability [2][3].
Addressing supply shortages and demand pressures is also a key focus. With continued high demand driven by factors such as immigration and population growth, alongside underbuilding challenges, policy emphasis is placed on increasing supply through diverse development approaches and easing lending criteria to align with current economic realities [1][3].
Broader fiscal and structural reforms are also part of the plan, including enhancing efficiency in public spending, supporting private investment, and fostering a better business environment to underpin economic growth and long-term sustainability in housing markets [4].
In summary, long-term solutions are holistic, combining supply-side support for smaller developers, planning reforms, regulatory changes to mortgage lending, and broader economic measures to support sustained housing market improvements following the Help to Buy scheme’s conclusion [1][2][3][4].
[1] Housebuilding & Planning News (2022) [2] Financial Times (2022) [3] The Guardian (2022) [4] Government White Paper (2021)
- For those considering personal-finance decisions involving real-estate investments, the conclusion of the Help to Buy scheme in 2022 may affect first-time buyers and inspire interest in the shared ownership sector, which is becoming increasingly popular due to rising house prices, interest rate rises, and increased living costs.
- To improve access to homeownership and stimulate the housing market, policymakers in England are considering long-term solutions that include financing support for smaller developers (SMEs), implementing planning reforms, investing in infrastructure, and making financial regulatory changes, as well as broader fiscal and structural reforms to promote economic growth and long-term sustainability in housing markets.
