With the deadline for opening new Help to Buy ISAs coming up in November this year, and the government equity loan scheme in its current form closing on the 31st March 2021*, what do Brits really think about it? A February 2019 poll of 909 people by the Future Illuminate Panel on behalf of Real Homes suggests that British home owners and renters alike are wary of the scheme.
Asked about their opinion of government equity loan schemes, with Help to Buy given as a specific example, the majority (66 per cent) gave the polite answer, 'It's an option, but not for me', with a further 21 per cent putting it more bluntly by opting for the 'I don't think it's worth it' response. Only 12 per cent of the respondents thought that Help to Buy is a great opportunity to own their own home and that they would actively be looking into it.
For the sake of fairness, it's worth noting that 73 per cent of our respondents are already home owners, with only 19 per cent renting, and it is probable that many of the 12 per cent of those enthusiastic about Help to Buy are the renters looking at their options for owning their first home. However, given that well over half of the respondents (58 per cent) are aged 25-to 50, it is likely that for many of them, Help to Buy was an option (which they declined) when they were looking into buying their first home, given that the average age of buying a first home is currently 34, and the scheme has been running since 2013.
Help to Buy has come under some criticism in recent years for several reasons. Concerns have been voiced about just how truly affordable the new builds on offer are, and about the longer-term prospects of home owners who took advantage of the scheme but may have trouble moving due to the new build apartments losing their value, potentially leaving the home owners with negative equity.
A Ministry for Housing, Communities and Local Government report, called 'Evaluation of the Help to Buy equity loan scheme 2017' (opens in new tab) was published in October 2018 addressed these concerns, pointing out that 'Help to Buy prices have risen in line with new build prices but remain well below overall levels. Equally, Help to Buy prices generally remain below those for all transactions, that is including the second-hand market.'
While building new homes is absolutely the way forward in solving the housing crisis, future government schemes will need to take a harder look at what affordability really means in relation to current average incomes and inflation.
*correction: this piece previously stated that the government equity loan scheme ends in November 2019, when this deadline should refer to opening a Help to Buy ISA.
Want to make up your own mind about the scheme? Consult our beginner's guide to Help to Buy.