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George Osborne's flagship Help to Buy scheme benefiting homebuyers who don't need help, watchdog finds

George Osborne's flagship Help to Buy scheme benefiting homebuyers who don't need help, watchdog finds
3 min read

Ministers have been accused of presiding over "fundamental" flaws in a key housing scheme, as the public spending watchdog found that many of those who benefited from Help to Buy could have bought a home without it.

Help to Buy was launched by then-Chancellor George Osborne in 2013 in a bid to boost home ownership and housing supply by making it easier for people to get mortgages.

Under the scheme, home buyers receive a government loan of up to 20% of the market value of a new-build property, which is paid back when they sell the house on, or after 25 years.

But the scheme is not means-tested and is currently open to both first-time buyers and people who have previously owned a home.

A new report from the National Audit Office said the scheme had "increased home ownership and housing supply", with the Government's own research saying 37% of households who used the scheme would not have been able to buy a home without it.

But the watchdog also found that "many of those using the scheme would have been able to buy a home anyway".

According to government figures, almost a third (31%) of all buyers "could have purchased a property they wanted without the scheme".

Meanwhile around 4% of those who had used the scheme by December last year had household incomes of over £100,000, the NAO found.

NAO head Gareth Davies said: "Help to Buy has increased home ownership and housing supply, particularly for first-time buyers.

"However, a proportion of participants could have afforded to buy a home without the government’s help.

"The scheme has also exposed the Government to significant market risk if property values fall, as well as tying up a significant public financial capacity."

And he added: "The government’s greatest challenge now is to wean the property market off the scheme with as little impact as possible on its ambition of creating 300,000 homes a year from the mid-2020s.

"Until we can observe its longer-term effects on the property market and whether the Department has recovered its substantial investment, we cannot say whether the scheme has delivered value for money."


Labour pounced on the NAO's findings to accuse ministers of focusing the scheme on the wrong people.

Shadow Housing Secretary John Healey said: "This report confirms the fundamental flaws in Help to Buy which Ministers have failed to fix."

The Labour frontbencher added: "One in five helped by Help to Buy aren’t even first-time buyers and two thirds of buyers could have bought without this assistance.

“The current scheme is poorly targeted and poor value for taxpayers' money. Help to Buy should be tightly targeted on first-time buyers with low and middle incomes, as Labour has long-argued."

Chancellor Philip Hammond announced in last year's Budget that Help To Buy will be restricted to first-time buyers from April 2021 as the scheme reaches enters its final years.

Meg Hillier, the Labour MP who chairs the cross-party Public Accounts Committee, said the NAO report showed the Ministry of Housing needed to "safeguard its investment of taxpayers’ money" and urged ministers "to exercise caution in winding down the scheme if it is to minimise negative effects on the housing market".

Housing minister Kit Malthouse said: "Help to Buy has been genuinely life-changing for first-time buyers across the country, helping them secure their first step on the property ladder. Not only has it supported more than 170,000 first-time buyers, it has increased home building by nearly 15pc, and is set to make a profit for the public: it’s been a win-win."

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