Following house builder, Crest Nicholson, noting the impact of the end of Help to Buy in its trading update this morning, some experts have warned against a return of the scheme — but others have suggested a “sudden reappearance” cannot be ruled out ahead of a General Election.
In its trading update, where it announced it expected adjusted pre-tax profit to be £50m in the year ending October 31, down from £73.7 million, Crest Nicholson said: “Additional mortgage borrowing for those looking to upgrade or for those with low levels of equity, notably first-time buyers, has become significantly more expensive with no Government support (following the end of Help to Buy) now in place to cushion this impact.”
Darryl Dhoffer, founder of Bedford-based The Mortgage Expert, said: “With all eyes looking at a possible General Election in Spring 2024, it’s possible both the Conservatives and Labour will use the reintroduction of Help To Buy as part of their manifestos to get voters onboard, and help boost the flagging new build market. This year has been very much focused on consolidation and cuts to tackle high inflation and restrict consumer spending, so don’t bet against Help To Buy making a sudden reappearance.”
But Lewis Shaw, founder of Mansfield-based Shaw Financial Services, warned against the scheme returning: “The last thing the property market needs right now is more free money going into the system. We need to let the market find its natural equilibrium without further interference from the Government. No, it’s not going to be pretty, but the sooner the day of reckoning is upon us, the sooner we can start to come out the other side.”
Ranald Mitchell, director of Norwich-based independent mortgage broker, Charwin Private Clients, agreed with Shaw: “Help to Buy did nothing but encourage people to buy property they couldn’t ordinarily afford on a buy now, pay later basis.”
Much the same stance was taken by Stephen Perkins, managing director at Norwich-based Yellow Brick Mortgages: “Overall the scheme probably did more damage than good with the increases in house prices that it brought about.”
Meanwhile, others questioned the timing of the end of the Help to Buy scheme. Samuel Mather-Holgate of Swindon-based advisory firm, Mather & Murray Financial, said: “When the housing market desperately needed stimulus, the Government allowed Help to Buy to be retired and introduced no replacement. Both buyers and builders need incentives and the Tories have abandoned them. I don’t expect any new initiatives to be unveiled as the whole department is incompetent. The housing market looks set to be a driverless car until Labour take over.”
Joe Garner, managing director of property consultants, Joe Garner Consulting, also questioned the end of the Help to Buy scheme: “Withdrawing Help to Buy without an alternative measure in place has left both first-time buyers and first-time owners up the creek without a paddle.”
Leave a Comment