Home Buyer’s Aid, a program that started in 2013, allows people to buy a home with a down payment of 5% of the purchase price, with the government providing an equity loan of up to 40% in London and 20 % in the rest of the country.
The Housing Ministry said that in the seven years between the program’s launch in spring 2013 and March 2020, the initiative had enabled 272,000 households to purchase a new home.
“The government continues to work closely with all parts of the housing industry to understand the challenges and opportunities they face,” a spokesperson for the Ministry of Housing said.
The Home Buyer’s Assistance Program was designed to help people buy a home at a time when mortgage lenders were reluctant to offer loans without large deposits.
From the start, however, he has been criticized for driving up house prices, subsidizing people who would have bought a house anyway, and increasing the profits of the big builders.
A National Audit Office report in 2019 said that 63% of people buying homes under the program could have done so without state help, and official figures showed that households with more income. of £ 80,000 a year were more likely to benefit from the initiative than those with incomes of less than £ 30,000.
Buy-back transactions supported around half of Persimmon’s sales in 2018 when the automaker racked up profits of more than £ 1 billion. Vince Cable, then leader of the Liberal Democrats, accused the company of “squeezing its profits from the public purse.”
The government responded to criticism by announcing plans for a less generous replacement program that would only be available to first-time buyers.
The Home Builders Federation said of the 18,000 people likely to be affected by the December deadline, about 40% would not be eligible for the new program.
David O’Leary, director of policy at HBF, said: “The coronavirus has forced the residential construction industry to shut down, and as builders are now back on site, working under strict and safe operating guidelines , completions were inevitably delayed.
“It’s an obvious response to extend the deadline to accommodate these delays, but due to the rigid rules, thousands of homebuyers seem likely to miss the opportunity to use the help to buy and thus being able to buy a new Home.
“Mortgage loans for first-time buyers are now scarce, purchasing assistance is more important than ever. Reducing the availability of purchasing assistance will have a ripple effect, undermining attempts to increase the delivery of new homes at a time when the economic benefits provided by the industry are desperately needed.