The UK government is preparing to reintroduce a housing support scheme aimed at assisting couples with incomes up to £140,000, with plans to include a cap on the property values eligible for purchase under the program. This anticipated cap is expected to be announced alongside the forthcoming budget.
The previous iteration of the Help to Buy scheme applied a flat maximum property value limit of £600,000 from 2013 to 2021. In its final two years, the scheme was adjusted to set purchase price thresholds at 1.5 times the regional average first-time buyer property price, which ranged from £186,100 in the North East to £600,000 in London. The new scheme is expected to follow a similar structure, although the exact property value caps are yet to be confirmed.
The decision to revive Help to Buy follows internal government assessments that previous reforms—such as reducing planning regulations—have not sufficiently stimulated new housebuilding. Recent data underscoring the challenges in the housing market revealed that planning approvals for new homes in England fell to their lowest level in over a decade. Between April and June of this year, only 45,315 homes received planning approval, contributing to a total of 214,515 approvals in the year leading to the second quarter. This figure marks an 8 percent decrease compared to the previous year and is 36 percent below the 2017 peak.
Current approval rates are significantly behind the government's target of 370,000 new homes annually, a key component of its plan to deliver 1.5 million new homes over the coming years. The Home Builders Federation (HBF), representing the interests of builders in England, has attributed one of the primary constraints on housing supply to a lack of effective demand. Neil Jefferson, the HBF’s chief executive, emphasized that while the scheme could improve market conditions, its impact will heavily depend on the precise policy details outlined in the upcoming budget.
The reintroduction of the Help to Buy scheme indicates a strategic shift in government efforts to address the housing shortage and support prospective buyers amid rising construction costs and subdued homebuilding activity. Officials are expected to provide further clarity on income eligibility and regional property value caps in the budget announcement.