Help to Buy mess as taxpayers subsidise thousands of homes for couples earning more than £100,000
- Thousands of wealthy families are taking advantage of the taxpayer scheme
- More than 6,700 households with incomes over £100,000 bought homes
- The scheme provides taxpayer cash to people seeking a mortgage
- The original aim was to help people who could not afford to save up for a deposit
Thousands of wealthy families are taking advantage of a taxpayer scheme designed to help struggling first-time buyers get on the housing ladder.
More than 6,700 households with incomes over £100,000 have bought homes using Help to Buy, according to the government’s own figures.
The scheme provides taxpayer cash to people seeking a mortgage. But despite its original aim to help people who could not afford big deposits, nearly one in 20 households with support have six-figure incomes.
And families with incomes of £50,000 or more have now received 40 per cent of loans, according to the report by the Ministry of Housing, Communities and Local Government.
The original aim of the Help to Buy scheme was to assist first time buyers who were not able to save up for large deposits for homes
Last night critics claimed Help to Buy was failing to help people who needed it most. Sam Dumitriu, Adam Smith Institute’s head of research, said: ‘The fundamental problem is a lack of supply, but Help to Buy does not address that.
It doesn’t make sense for taxpayers to be paying for something that is going to people who are well off.’
Housing analyst Anthony Breach, of the Centre for Cities, added: ‘We need to be releasing more land near train stations and areas where there is already infrastructure.’
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Professor Danny Dorling, an Oxford University housing expert, said: ‘When house prices fall, part of the reason will be Help to Buy artificially inflated their value.’
Almost 170,000 families have now taken advantage of Help to Buy since its launch in 2013. That has seen the Government provide more than £8.9billion of support, with the scheme extended to last until 2021 and an additional £10billion pledged.
The average cost of a home bought through the scheme outside London was about £250,000, with the average loan handed out worth £52,800.
More than 6,700 households with incomes over £100,000 have bought homes using Help to Buy
Of the families who used the scheme, 136,700 were first-time buyers. A fifth of families using the scheme were not first-time buyers.
There is no maximum income on the Help to Buy scheme, which applies to new-build homes.
The scheme allows house hunters to purchase new-builds worth up to £600,000 using deposits of only 5pc – or £30,000.
The Government loans up to another 20pc interest-free for five years – or £120,000. In London, the taxpayer loan can reach 40pc of the value of the property – or £240,000.
When the house is sold, the government takes the same proportion of the sale price. If it goes up, the government makes money. If it goes down, the taxpayer makes a loss.
Campbell Robb, Joseph Rowntree Foundation chief executive, said a lack of cash invested in affordable housing meant more pressure on families forced to rent.
A government spokesman said: ‘The majority of those using our Help to Buy Equity Loan scheme had household incomes of £50,000 or less.’
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