uk houses

Help to Buy: Treasury £1.8bn in profit as scheme comes to an end

As the government’s Help to Buy scheme comes to a close, it has been reported that the Treasury has come out the other end of the policy nearly £2 billion better following more than 375,000 loans being made by the government to people looking to buy their first home. 

The scheme was launched in 2013 and according to The Times, Homes England, claimed that the UK treasury makes an average profit of £4,700. This indicates that, if housing costs remain largely unchanged, the government will benefit from Help to Buy.

Due to equity loans used in the scheme, the Treasury, and by extension, the taxpayer, holds a portion of the homes and is therefore entitled to a share of price increases in proportionate to the size of the loan.

Therefore, in addition to paying back the original loan amount, someone with a 20% equity loan who sells their home for £10,000 more than they paid will also be required to pay the government £2,000 in interest.

Developers have said the scheme has worked as it has got hundreds of people onto the property ladder, according to The Times.

About 25% of all Help to Buy loans had been repaid as of March of last year, for which the Treasury got £5.52 billion after initially lending £5.05 billion. Nearly £24 billion in Help to Buy loans from the Treasury were made, and they were used to purchase homes valued £105 billion.

For the first time in a long time, there will not be an incentive scheme for first-time buyers starting on Saturday. The HBF told The Times that “builders can only build if buyers can buy”.

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