Wealthier families and existing homeowners are among the biggest users of the Government’s housing scheme aimed at helping first-time buyers.
Help To Buy was set up in 2013 to support families struggling to raise a deposit for their first home, by offering them taxpayer-funded loans.
Crucially, however, it was also opened up to those moving home, in a bid to stimulate demand and get more properties built.
But more than 40 per cent of those who have used it since its launch are on salaries of £50,000 or more, figures from the Ministry of Housing, Communities and Local Government show.
Work in progress: Help To Buy was set up in 2013 to support families struggling to raise a deposit for a home
These buyers account for almost 78,000 of the 184,000 completions. Some 7,444 households were on more than £100,000 and nearly a fifth – 35,084 – were homeowners.
Existing homeowners have taken more than £2 billion of £9.9 billion loans made.
Under the scheme, those buying a qualifying new build home can borrow up to 20 per cent of the purchase price interest-free over five years from the government, as long as they put down a deposit of 5 per cent themselves.
The rest of the cost of purchasing the property can be covered by a mortgage.
The government takes a 20 per cent stake in the property, so the debt will rise if the home’s value does. After five years, interest begins to be charged on the government loan at a rate of 1.75 per cent, this rises by RPI inflation plus 1 per cent each year.
Critics say Help to Buy has actually driven up house prices.
Greg Beales, campaign director at homeless charity Shelter, said: ‘Help To Buy’s just become a handout for high earners, it’s doing nothing at all for the private renters most in need.’
Luke Murphy, at the Institute For Public Policy Research, said: ‘The Government should focus the scheme on those in need or phase it out.’
Communities Secretary James Brokenshire said he was committed to making the market work for everyone, adding: ‘Since 2010 we have helped over half a million people get on the housing ladder, through programmes such as Help To Buy.’
In the Budget, the Government confirmed it would extend the Help to Buy equity loan scheme past 2021 to 2023, but restrict it to first-time buyers purchasing newly built homes during that time.
From 2021, there will also be new regional price caps brought in, drastically reducing the maximum value of homes that can be bought with the scheme’s help.
In the Budget, the Government confirmed it would extend the Help to Buy equity loan scheme past 2021 to 2023, but restrict it to first-time buyers
These caps have been set at 1.5 times the current forecast regional average first-time buyer price, up to a maximum of £600,000 in London.
For example, in the North East, buyers will see their purchasing power under the scheme plummet to properties worth a maximum of £186,100.
Currently – and until 2021 – anyone moving to a newly built home and taking advantage of the Help to Buy equity loan to boost their purchasing power can buy a property worth up to £600,000.
Thereafter, and for a maximum of two years, only first-time buyers will be eligible to buy through the scheme and maximum property values will be restricted.
Only London first-time buyers will still be able to purchase new properties up to £600,000 using the equity loan after 2021 with all other regions seeing maximum eligible property prices cut.
It means that those looking to benefit from the scheme but who already own their own home must take advantage of it before April 2021.