Islander

FT REPORTS HELP TO BUY IS COMING BACK. This is disastrous news, condemning more hapless FTBs into unnecessary debt so that Labour can try and prop up its growth failures and missed housing targets. They KNOW this makes housing affordability worse, but keeping votes is more important. Reported just now in the FT: "Andy Burnham will revive the controversial “Help to Buy” scheme through which hundreds of thousands of first-time buyers got on to the housing ladder under the previous Conservative government, according to people familiar with the situation. The UK prime minister has agreed to launch a new equity loan scheme to help first-time buyers, although it will have a different name to the scheme that ran for 10 years from 2013 to 2023. The people said that Burnham could announce the plan at the Labour Party’s annual conference, which runs from Sunday until Wednesday in Liverpool. The original Help to Buy scheme consisted of two products, a mortgage guarantee and an equity loan; it is unclear whether Burnham will seek to revive both products. The move comes as ministers agonise over underwhelming housebuilding volumes that jeopardise the Labour government’s target of building 1.5mn new homes over the five-year parliament. Some government officials are concerned that the number of new homes being built is so low that the Office for Budget Responsibility could downgrade its predictions, which would impair growth forecasts and the government’s fiscal headroom. The FT reported this month that ministers, including housing minister Matthew Pennycook, have been pushing to revive Help to Buy, albeit on a more limited and targeted scale than the Tories’ version. One official said ministers were moving at “breakneck speed” to design the new product. Downing Street and the housing department declined to comment. The housing department released an official review this month suggesting that Help to Buy had been “very high value for money” in what some observers interpreted as an attempt to soften public opinion towards the idea of reviving the scheme. The evaluation concluded that Help to Buy was responsible for one in seven homes built in England over the period it was in place. It propelled more than 300,000 people to buy their first home, the review found. The scheme had pushed up house prices by “only” 2 percentage points, the review added, although it acknowledged that this had made it harder for some aspiring first-time buyers. This year, discussions were held between then-housing secretary Steve Reed, housing officials and housebuilding executives about how a new housing equity scheme could work. Chancellor George Osborne introduced Help to Buy in 2013, offering state-backed equity loans for new-build purchases and a mortgage guarantee scheme for lenders. The scheme lowered the amount that individuals had to put down as a deposit when buying property. The Home Builders Federation, an industry group, has recently put forward its own proposal for a new equity scheme “taking lessons from previous interventions” to help first-time buyers."