A government-commissioned study has found that the UK’s previous Help to Buy scheme, which operated from 2013 to 2023, delivered significant value by enabling new homeownership and stimulating housebuilding. The scheme provided government-backed equity loans to first-time buyers, helping approximately 387,000 households purchase new homes, with around half of those buyers unlikely to have accessed the market otherwise. Additionally, the programme contributed to an increase in housing construction, supporting wider economic activity beyond a rise in developers’ profits.
Housebuilders are currently experiencing a challenging market environment. Major firms, including Persimmon—the best-performing among FTSE 350 builders—have seen declines in market value this year, reflecting broader caution amid high borrowing costs for consumers. Although lenders remain willing to provide mortgages to buyers with modest deposits, elevated interest rates have made monthly repayments prohibitive for many potential purchasers. This dynamic has left developers holding substantial cash reserves but reluctant to increase output without clearer demand.
In light of these conditions, industry groups have urged the government to consider reintroducing a version of Help to Buy ahead of the forthcoming Budget. The Home Builders Federation has proposed a scaled-back model, suggesting a 15 percent equity loan could re-energize demand while requiring lower public expenditure. Under this plan, builders might be required to pay an upfront fee to participate, which could help offset costs for the government.
However, the financial implications remain significant. The original Help to Buy programme involved a net cost of approximately £3.6 billion once repayments were accounted for, with peak annual government equity loans exceeding £3 billion. The current fiscal environment, impacted by rising bond yields, has constrained the government’s borrowing capacity and complicated efforts to allocate funds for housing support initiatives.
Access to affordable homeownership continues to be regarded as a key indicator of a functioning economy by many policymakers. The potential reintroduction of a Help to Buy scheme has garnered cautious optimism among housebuilders, pending government approval and budgetary considerations under Prime Minister Andy Burnham’s administration. If implemented, the programme could offer a dual benefit of assisting first-time buyers and bolstering the housing sector amid ongoing market pressure.