Help to Buy helped those who could already afford a home, says new report

New report reveals that the majority of Help to Buy home owners could have afforded a home without government assistance

Help to buy: Small red houses balanced on top of pound coins

Some time back, we reported on the Help to Buy scheme, set up to help those who wanted to own their own home, but didn't have a deposit, or quite the level of income needed to secure a mortgage on the open market. 

Now, the National Audit Office has issued a report on the Help to Buy government scheme – and the revelations are troubling. The three-part government equity loan scheme has often been portrayed as a good option for first-time buyers who wouldn't normally be able to buy a home due to a low salary or low deposit (or both). With just a five per cent deposit required on Help to Buy properties, it seemed like an affordable option

The report, however, points out that more than half of the 200,000-odd people who have benefited from the scheme could have afforded a house on their own, without help from the state. Even more worryingly, over 8,000 of them had a household income of over £100,000 per annum. 

The NAO report also confirms some the criticisms that has been leveled at Help to Buy by campaigners and economists (the Adam Smith Institute, for example, once described the effects of Help to Buy as being 'like throwing petrol onto a bonfire').

Most significantly, the report concedes that the scheme has benefited big property firms the most. According to experts, profits on Help to Buy homes have tripled since the introduction of the scheme, contributing to Britain's house price bubble.

The NAO have said that '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.' Definitely some food for thought if you are considering the scheme.