in the know

Does Help to Buy prop up housebuilders?..

The Help to Buy housing scheme, launched in 2013, is hailed by the government as one of its big successes.

The Treasury says 494,108 English homes have been bought through the scheme, with the vast majority going to first-time buyers living outside London.

Ministers and mortgage lenders alike say it lifts people into home ownership by getting them on the housing ladder.

But critics say it merely subsidises housebuilders and pushes up the price of new homes.

Similar schemes exist in Wales, Scotland and Northern Ireland.

What is Help to Buy anyway?

There are two main forms: Help to Buy loans and Help to Buy Individual Savings Accounts (Isas).

In the first version, the government lends up to 20% of the cost of a newly built property – or 40% within Greater London – so buyers need only a 5% deposit and a 75% mortgage to buy it.

Those purchasing a new-build home are not charged interest for the first five years.

The Help to Buy Isa was launched later, in December 2015, and is open to first-time buyers in the UK.

Savers receive a 25% bonus from the government when they withdraw the money they have saved to buy their first property. The maximum purchase price is £250,000, or £450,000 in London.

The maximum government bonus that someone can receive is £3,000, if they have saved £12,000.

Savers can deposit up to £200 a month, although they can kick-start saving with a lump sum of £1,200.

What are the arguments in favour?

Chancellor Philip Hammond is certainly firmly behind the scheme, which was introduced by his predecessor, George Osborne.

He has extended it to run until March 2023 and says the move will support “half a million more home purchases”.

He said: “The government supports those who dream of owning their own home and wants to help them take the first step on to the property ladder.”