Auditor queries Help to Buy spending
I have previously run stories about how this scheme is likely to drive up demand not supply. This story tells us just how little detailed planning went into it.
The government has failed to demonstrate whether its £3.7bn Help To Buy equity loan mortgage scheme is giving value for money, the spending watchdog has warned.
The scheme was launched in England last April with the aim of helping credit-worthy buyers with a deposit of at least 5% on to the property ladder as well as increasing the housing supply by being targeted at new-build properties only.
But the National Audit Office (NAO) found there was no method in place to measure the “joined up” impact of a string of recent government initiatives aiming to inject new life into the housing market.
Margaret Hodge, chairwoman of the Commons public cccounts committee, said she was “shocked” the government was spending billions on the scheme without fully understanding its effects.
The NAO also found that in around one in 62 (1.6%) sales completed under the equity loan scheme last year the home buyer had a deposit of less than 5% and in one case the buyer had nothing at all, potentially increasing the taxpayer’s exposure if the property was later repossessed.
Amyas Morse, head of the NAO, said Help To Buy was generally “running smoothly” but warned: “The scheme’s costs, which come in large part from tying up £3.7bn long-term in the housing market, will be substantial.”