Built up by taxpayers

Loan scheme’s big winners

NEARLY two-thirds of people who used a Government scheme to buy a new-build home could have got somewhere without it, a report has concluded.

Help to Buy was launched in 2013 to boost property sales in the wake of the credit crunch.

The scheme allows buyers in England with as little as a 5% deposit to borrow up to 20% of the value of a new-build home, interest-free, for five years.

It has proved successful, with around 211,000 loans being made, totalling £11.7billion by December last year, according to a report published today by the National Audit Office.

Government research suggests 37% of buyers could not have got their place without the scheme.

But the remaining 63% could have either afforded a cheaper home or been able to buy the property they did by borrowing the money from, for example, a bank or building society.

The report also found around 8,000 buyers using the scheme had incomes of more than £100,000 a year.

Gareth Davies, head of the NAO, said: “Help to Buy has increased home ownership and housing supply, particularly for first-time buyers.

“However, a proportion of participants could have afforded a home without the Government’s help.”

Davies also warned the scheme had exposed taxpayers to “significant risk” if property prices fall.

Help to Buy has also boosted the profits of housebuilders, said the NAO.

The scheme accounted for between 36% and 48% of all the homes sold by Britain’s five biggest housebuilders last year.

At the top end was Persimmon, which was slammed for a bonus bonanza for fatcat bosses, including former CEO Jeff Fairburn’s £75m.

However, the NAO said it couldn’t determine how much of housebuilder profits related to Help to Buy sales.