"A potential extension of the Help to Buy scheme makes complete sense at this time. Builder and consumer confidence could struggle post-lockdown and this will certainly boost both."
The Government is in talks with The Home Builders Federation, whose members deliver around 80% of new homes built each year, about extending the scheme to help support the industry after Covid-19 lockdown measures are lifted, according to The Times.
The shutdown of construction work and sales offices is expected to have a long-term impact on the sector, with Savills estimating that the lockdown will hinder the construction of around 200,000 new homes.
Since the launch of the Help to Buy: Equity Loan scheme in April 2013, 248,075 properties have been bought, with first-time buyers accounting for 81% of total purchases.
The current Help to Buy scheme is due to end in April 2021. A new scheme will then run for two years, restricted to first-time buyers with regional property price caps.
Speaking to The Times, John Tutte, chairman of Redrow, said: “It makes sense for the government to extend the [Help to Buy] deadlines by 12 months. I think that will become quite important because we don’t know where the mortgage market is going to come back to.”
Craig McKinlay, new business director at Kensington Mortgages, commented: “A potential extension of the Help to Buy scheme makes complete sense at this time. Builder and consumer confidence could struggle post-lockdown and this will certainly boost both.
"Construction jobs are not just vital to the housing market, but our economy too, and maintaining these is crucial to keep it running and helping us recover. In our current world of uncertainty, any certainty is extremely welcome.”
Patrick Bamford, business development director at AmTrust Mortgage & Credit, added: “It is perhaps not surprising given the current situation and the fact the Help to Buy Scheme is already in place that Government officials are eyeing up an extension. However, this will require further taxpayer support at a time when the nation's finances will already have taken a significant hit in order to, quite rightly, help individuals and businesses through this period.
"In those circumstances, it might be far more prudent for the Government to utilise a viable private alternative to Help to Buy which currently exists, can be actively utilised by lenders and would mean no further calls upon the taxpayer to subsidise the purchase of these new-build homes. At some point in the future, the industry has to fend for itself. If the Government does wish to extend, then there are very good reasons why the builders and developers concerned should take on a far greater percentage of the risk than they currently do, and that this should not be put purely on the UK taxpayer.”
Kate Davies, executive director of the Intermediary Mortgage Lenders Association (IMLA), said: “IMLA has always believed it vital that the housing sector avoids a ‘cliff edge’ scenario with the end of Help to Buy and we welcome the news that the government may be considering an extension of the current scheme. Where the industry thought it had a year to prepare for the shift towards Help to Buy 2021, the impact of Covid-19 effectively closing the purchase market means a review of that timeline is almost certainly necessary.
“Many borrowers who might reasonably have expected to be able to complete their purchase before the end of 2020 may now find that very challenging. Any flexibility which will allow purchases to complete beyond the originally fixed deadlines will be welcomed. Going forward, it may be that some changes could sensibly be made to the scheme, while allowing it to remain in place for longer. Such changes could, for example, relate to the types of properties being built and could address some of the criticism which Help to Buy has attracted in the past.”
