SN 03668

BRIEFING PAPER
Number 03668, 30 March 2021
Extending home By Wendy Wilson
ownership: Government Hannah Cromarty

Antony Seely
Cassie Barton
initiatives
Inside:
1. First-time buyers and
affordability
2. Low-cost home ownership
schemes in England
3. Purchase schemes for social
housing tenants
4. Stamp duty land tax
5. London
6. Wales, Scotland and Northern
Ireland
7. Comment on the impact of
home ownership schemes
www.parliament.uk/commons-library | intranet.parliament.uk/commons-library | papers@parliament.uk | @commonslibrary

Number 03668, 30 March 2021 2
Contents
Summary 3
1. First-time buyers and affordability 5
1.1 Affordability before the credit crunch 7
1.2 The credit crunch and beyond 7
2. Low-cost home ownership schemes in England 11
Background 11
2.1 Equity loan schemes 13
Help to Buy: Equity Loan (2013 – 2021) 13
Help to Buy: Equity Loan (2021 – 2023) 14
2.2 Shared ownership 15
New national model for shared ownership 16
2.3 Rent to Buy 17
2.4 NewBuy Guarantee 18
2.5 Mortgage guarantee schemes 19
Help to Buy: mortgage guarantee scheme (2013-2016) 19
The 95% mortgage guarantee scheme - 2021 20
2.6 Help to Buy: ISA (closed to new accounts) 21
2.7 The lifetime ISA 22
2.8 Starter Homes 22
2.9 First Homes 23
2.10 Discounted Sales 24
2.11 Failed housing transactions 24
3. Purchase schemes for social housing tenants 26
3.1 Right to Buy and Right to Acquire 26
3.2 An extended Right to Buy 26
3.3 Cash incentive schemes 27
3.4 Social HomeBuy 27
3.5 A Right to Shared Ownership 28
4. Stamp duty land tax 29
5. London 31
6. Wales, Scotland and Northern Ireland 32
7. Comment on the impact of home ownership schemes 34
7.1 Labour’s schemes: boosting supply or house price inflation? 34
7.2 Equity loan schemes: additionality and value for money? 35
7.3 Contributing to house price inflation? 40
7.4 Well targeted? 44
7.5 Reconciling aspirations and sustainability 45
Contributing authors Antony Seely, Stamp duty land tax, Section 4

Cassie Barton, statistics, Section 1
Cover page image copyright: Richard Cracknell

3 Commons Library Briefing, 30 March 2021
Summary
In 2019/20, 65% of households in England were homeowners. The rate of home
ownership in England has declined from 71% in 2003 despite being the tenure of choice
for most people. The 2014 British Social Attitudes survey found that, given a free choice,
86% would prefer to buy their own home rather than rent.
The decline in home ownership has been more pronounced in younger age groups: in
2003/04, 59% of households led by someone aged 25-34 were homeowners. This fell to
41% in 2019/20. Over the same period, the proportion of households led by a 35-44 year
old fell from 74% to 56%.
Home ownership has become increasingly difficult to access, particularly for first-time
buyers, as house price growth has outstripped the growth in wages. In 2019, the median
house price in England was around 7.8 times higher than the median annual earnings of a
full-time worker. The ratio has increased from around 5.1 in 2002. In London, the ratio in
2019 was considerably higher at 12.8.
The financial crash and the subsequent fall in house prices after the end of 2007 had only
a limited impact on affordability for first-time buyers. Lenders have tightened their criteria
for mortgage approvals and require buyers to have substantial deposits. Historically low
interest rates have reduced the cost of mortgage borrowing in recent years, but the
affordability of deposits remains a key barrier for first-time buyers.
This paper describes specific Government initiatives which have been developed to assist
first-time buyers into home ownership and, in some cases, to help existing owners who
are seeking to move.
Low-cost home ownership schemes have existed in various forms for many years.
Commentators have generally supported interventions to support home ownership in
challenging market conditions but emphasise the need for an overall increase in housing
supply to prevent subsidised home ownership from adding to house price inflation.
Concerns have also been raised about the effective targeting of such schemes and
whether they provide value for money.
Initiatives to extend home ownership have been central to Conservative Governments’
housing policy since 2015. The focus on home ownership has been criticised by some for
only benefitting those households that are already close to being able to buy their own
home. Government funding for the Help to Buy: Equity Loan scheme is expected to total
around £29 billion in cash terms by March 2023. The National Audit Office has
highlighted that there is an opportunity cost to this funding, as it is unavailable for other
housing schemes or priorities. Some commentators question whether the funding could
be better spent assisting those with more pressing housing needs.
The current Government has said it wants to “turn Generation Rent into Generation Buy”.
The following home ownership initiatives are already in place or being developed:
• Help to Buy: Equity Loan – from April 2021 first-time buyers can obtain an equity
loan from the Government of up to 20% (or up to 40% in London) of the market
value of an eligible new-build property (subject to regional maximum property price
caps). The equity loan is interest free for the first five years. The buyer must have a
deposit worth at least 5% of the property’s value and secure a mortgage for the
remaining amount. The scheme will run to March 2023.
Number 03668, 30 March 2021 4
• Help to Buy: Shared Ownership - the scheme enables home buyers to buy a
share of a property and pay a subsidised rent on the remaining share. Purchasers
can buy additional shares in the property as and when they can afford to do so,
until they achieve full ownership.
• Rent to Buy - homes are let at an Intermediate Rent (which must not exceed 80%
of the local market rent for an equivalent home) for a minimum of five years during
which it is expected that tenants will save for the deposit to purchase their home.
• Mortgage Guarantee – from April 2021 the Government will provide a guarantee
to lenders who offer 95% mortgages to people with a deposit of 5% on properties
with a value of up to £600,000. The scheme is intended to be a temporary measure
and will be available for new mortgages up to 31 December 2022.
• Lifetime ISA - The Government’s Lifetime ISA can help first-time buyers save up for
a deposit for a house.
• First Homes - this scheme will enable local first-time buyers to purchase a new
home with a discount of at least 30% under market value. The discount will be
delivered through developer contributions and will be retained in perpetuity. The
Government intends to pilot the scheme and has not yet announced a timetable for
full implementation.
• Stamp duty land tax (SDLT) - over the past few years the Government has
announced three reforms to SDLT charged on the sale of residential property,
designed, to differing degrees, to encourage home ownership, particularly for first-
time buyers.
• Purchase schemes for social housing tenants – many social housing tenants
have a statutory Right to Buy or Right to Acquire the home in which they live at a
discount. The Government has committed to extend the Right to Buy to assured
housing association tenants on a non-statutory basis. It is also introducing a new
Right to Shared Ownership - eligible tenants in new housing association properties
delivered with Government grant will have an automatic right to buy a minimum
10% share of their home, with the ability to buy further shares over time.
The devolution of housing policy to Scotland, Wales and Northern Ireland is leading to
increasingly diverse approaches, in particular with regards to the Right to Buy policy. The
paper provides a brief overview of Government home ownership initiatives in these areas.
5 Extending home ownership: Government initiatives
1. First-time buyers and

affordability
The rate of home ownership in England has declined over the last
twenty years. In 2003, around 71% of households were homeowners –
the highest proportion since the 1980s. But the proportion has fallen
since then: 63% of households were homeowners in 2013/14, rising
slightly to 65% in 2019/20. In the same period, private renting has
become more common. Private renters represented 11% of households
in 2003, rising to 19% in 2019/20. 1
The decline in home ownership has been more pronounced in some
younger age groups, as the chart below shows. In 2003/04, 59% of
households led by someone aged 25-34 were homeowners. This fell to
41% in 2019/20. Similarly, the proportion of households led by a
35-44 year-old fell from 74% to 56%. People in older age groups were
more likely to be homeowners, and these age groups also showed less
of a fall over time. The proportion of people aged 65 and over owning
their home increased between 2003/04 and 2019/20.
Young people are less likely to be homeowners

Proportion of households that are owner-occupiers, by age of Household
Reference Person, England
80%
2003-04 2019-20
60%
40%
20%
0%
16-24 25-34 35-44 45-54 55-64 65+
Source: MHCLG, English Housing Survey 2019/20 report, Annex Table 1.4
The chart overleaf shows the trend in the number of new mortgages
made to first-time buyers in England since 1980. The number of new
first-time buyers fell steeply after the financial crisis in 2008, reaching a
low of 188,000 in 2011. The number has grown again since then, with
a recent peak of around 353,000 in 2018. However, numbers are still
considerably lower than peaks seen in the 1980s and 1990s.
1
MHCLG, English Housing Survey 2019 to 2020: headline report, Annex Table 1.1, 17
December 2020
Number 03668, 30 March 2021 6
First-time buyer numbers have increased since the

financial crisis
New mortgages made to first-time buyers, England, 2003 - 2020
600,000
400,000
200,000
0
1980 1985 1990 1995 2000 2005 2010 2015 2020
Source: UK Finance, Industry Data Table RL1A
The affordability of house prices is a key factor influencing the number

of households becoming new homeowners. House prices have risen
faster than earnings over the last few decades. As the chart below
shows, in England the median price paid for a house in 2019 was
around 7.8 times higher than the median annual earnings of a full-time
worker. This ratio is slightly lower than in 2018, but is part of a long-
term upward trend. The ratio was around 5.1 in 2002.
The increase in the house price to earnings ratio has been considerably
more pronounced in London. The ratio has been higher in London than
the England average since 2002 – median house prices were 6.9 times
median earnings in London in 2002, compared with 5.1 across England
– but the gap has been growing wider since around 2010. Median
house prices were 12.8 times median earnings in London in 2019,
slightly lower than a peak of 13.3 in 2017.
The house price to earnings ratio has grown

Ratio of median house price to median gross annual earnings, 2002 - 2019
12 London
8 England
0
2002 2006 2010 2014 2018
Source: ONS, House price to residence-based earnings ratio dataset, 19 March

2020
Notes: The median is the point at which half of prices/earnings are higher and
half are lower. Earnings data is before tax and represents full-time employees’
annual earnings.
1.1 Affordability before the credit crunch

Prior to the financial crisis and housing market downturn at the end of
2007, there was a great deal of press coverage on the potential for first-
time buyers to be priced out of the market. For example, in January
2005 the Halifax published a survey which indicated that young single
people could not afford to buy a home in more than 90% of English
towns and cities. 2
Up to March 2007, the Labour Government published monthly Housing
Market Reports. The June 2004 edition looked at affordability. One of
its findings was that the deposit required by first-time buyers in the first
quarter of 2004 was 21.7% of the purchase price, compared with 8.8%
in the second quarter of 1997. The final Housing Market Report of
March 2007 recorded house price inflation as having risen to 10.9% in
January 2007, up from 9.9% in December 2006. At the same time,
average earnings growth stood at 3.5%, down from 3.6% in December
2006.
In July 2007, the Council of Mortgage Lenders (CML) reported that first-
time buyer income multiples had reached their highest-ever level in May
of that year:
Today’s survey revealed that first-time buyer income multiples
reached their highest-ever level in May at 3.37 times the average
first-time buyer income, up from 3.33 times in April. And,
mortgage interest payments continued to rise, reaching 19.1%,
up from 18.7% in April - their highest level since 1992.
Home movers also face increased affordability constraints. In May
the average home mover income multiple reached a record 3.03
times, up from 3.01 times in the previous month. And, the
proportion of income used to pay mortgage interest also jumped
to 16.6% from 16.3% in April. 3
Roof magazine’s Affordability Index, published in May/June 2008,
recorded the UK’s affordability crisis as “reaching a new peak in 2007.”
The index, devised by Professor Steve Wilcox, took 1994 as the base
year (100) and concluded “that UK affordability deteriorated to 176.7
(meaning that it was 76.7% harder to access the market) in 2007.” 4
1.2 The credit crunch and beyond

The fall in house prices after 2007 appeared to have only a limited
effect on affordability for first-time buyers. Lenders tightened their
criteria for mortgage approvals and required buyers to have substantial
deposits. Mortgage products themselves were more expensive and, as
there was less credit in the market, there were fewer mortgages
available overall. However, Pawson and Wilcox’s UK Housing Review
2013 observed that for those first-time buyers who were able to secure
2
‘First-time buyers priced out of nine towns in 10’, Daily Telegraph, 22 January 2005
3
CML Confirms affordability worse than ever, 10 July 2007 [accessed on 16 March
2021]
4
Mortgage costs accounted for 12% of householders’ income in 1994 and 21.2% in
2007.
Number 03668, 30 March 2021 8
a mortgage, affordability improved in 2011. This assessment was based

on mortgage cost-to-income ratios as opposed to the more frequently
quoted house-price-to-income ratios. 5
An Oxford Economics report (Housing Market Analysis, July 2011)
reached the following conclusions on the outlook for first-time buyers:
One of the key constraints is mortgage availability. We expect the
squeeze in lending standards to dissipate gradually over the
coming two to three years. We have already seen the
reintroduction of mortgages with higher loan to valuation ratios,
but ratios remain well short of those seen at the peak (lenders are
just about starting to reintroduce 90% deal), and credit scores
and other non-financial criteria are being applied much more
strictly. As such, we expect the average LTV to creep up only
steadily from the 2010 averages of just under 70% for first timers
and 62% at the overall level. We assume that over the medium
term average LTVs settle at 75% and 65% respectively. 6
Shelter published an analysis of Housing affordability for first-time
buyers in March 2015. This compared changes in affordability between
1969 and 2013, and found that since 1969, house prices for first-time
buyers had increased by 48 times, while incomes had only increased
by 29 times.
The UK Housing Review 2015 Briefing Paper noted that sharp price rises
in 2014 made buying less affordable across the UK year-on-year, but
outside London prices were still more affordable than in 2007:
By 2014, ONS mix-adjusted first-time buyer prices were back
above 2007 levels across Great Britain; but only in London (48 per
cent) and to a lesser extent the East (18 per cent) and South East
(20 per cent) were prices significantly higher. In Scotland and
Wales, and elsewhere in England, 2014 prices were less than ten
per cent above 2007 levels though of course they are still rising. In
Northern Ireland, after a far more severe housing market collapse,
they remained nearly 40 per cent below 2007 levels.
After recovering from the downturn, higher prices have been
offset by a combination of modest increases in incomes and lower
interest rates. Working-household incomes in 2014 were some six
per cent higher (in cash terms) than in 2007, while average
interest rates for new mortgages fell from 6.1 to 3.1 per cent. So
while house-price-to-income ratios outside London (and the East
and South East) in 2014 were very similar to those in 2007, once
lower interest rates are taken into account mortgage-cost-to-
income ratios were lower in 2014 in every part of the UK except
London. 7
However, the Briefing Paper highlighted unprecedented house price
differentials between London and the rest of the UK:
Analysis by Alan Holmans has shown a post-war cyclical pattern,
with London taking the lead, so that house-price differentials
between London and the rest of the UK widen in the upturn and
5
CIH, UK Housing Review 2013, Hal Pawson & Steve Wilcox, p66
6
Oxford Economics, Housing Market Analysis, July 2011
7
CIH, UK Housing Review 2015 Briefing Paper, Steve Wilcox, John Perry and Peter
Williams, p9
narrow in the downturn. Updating his analysis shows that the

difference in London prices has now climbed to a post-war peak:
they are 85 per cent higher than the UK average.
[…]
The differential between average household incomes in London
relative to the rest of the UK has widened somewhat over the last
two decades, but they are still only some 32 per cent higher, and
can only be a minor factor in explaining house price differences.
Clearly London is increasingly an international housing market,
especially at the top end. And with a sharp reported rise in
interest in £2 million plus properties now that any threat of a
mansion tax has been removed, a further rise in high-end London
prices is widely anticipated.
Estimates vary but properties valued at over £2 million probably
form less than three per cent of London’s private housing,
although clearly their impact on average prices is rather greater.
Other factors are wider housing market pressures and the shortfall
in supply, but these are perennial issues for London and it is not
clear that they have grown in recent years relative to the rest of
the UK. The reasons for the unprecedented price differentials
need to be better understood, both to assess future prospects and
to make appropriate policy responses. 8
On 22 February 2016 the Office for National Statistics (ONS) published
Why are more people living with their parents? in which a significant fall
in young adult home owners was noted:
The percentage of young adult householders 9 owning their home
decreased from 55% in 1996 to 30% in 2015 for 25 to 29 year
olds; and from 68% to 46% for 30 to 34 year olds. 10
In 2017 the ONS published a statistics release which looked at
affordability for first-time buyers. Its main measure compared the lower
quartile house price in a given year with the median annual earnings of
22-29-year-olds working in the area. This was intended to measure
affordability for prospective first-time buyers. The analysis found
housing had become less affordable for first-time buyers in 78% of local
authorities in 2017 compared with the previous year. It also highlighted
regional variations in affordability, with London being the least
affordable region for prospective first-time buyers:
Prospective first-time buyers could expect to spend 13 times their
workplace-based annual earnings to purchase a property in
London in 2017, compared with 5.5 times their earnings to
purchase a property in the North East (the least and most
affordable regions respectively).
[…]
8
CIH, UK Housing Review 2015 Briefing Paper, 2015
9
The household reference person is the householder, which is the household member
who owns the accommodation; or is legally responsible for the rent; or occupies the
accommodation as reward of their employment, or through some relationship to its
owner who is not a member of the household. If there are joint householders, the
one with the highest income is the household reference person. If their income is
the same, then the eldest one is the household reference person.
10
ONS, Why are more people living with their parents? 22 February 2016
Number 03668, 30 March 2021 10
Out of all the English regions and Wales, the third most affordable
for prospective first-time buyers was Wales, with a prospective
affordability ratio of 6.5. Amongst English regions, there is a
noticeable geographical divide, with regions in the north and
midlands ranging from 5.5 (North East) to 8.0 (East Midlands) and
those in the greater South East and South West ranging from
10.1 (South West) to 13.0 (London). 11
A report by the independent Affordable Housing Commission in 2020
identified affordability of deposits as a key barrier for first-time buyers,
with recourse to the “bank of mum and dad” becoming a prominent
feature of home ownership:
Alongside lower availability of high-LTV mortgages, high house
prices have constrained the ability of households to raise a
deposit. In fact, the inability to save for a deposit is cited by the
public as the biggest barrier to buying. This chimes with research
by the banks and building societies, which have shown that it
would take over five years to save for a deposit in lower-demand
areas, rising to double digit figures in the South.
The data demonstrates the high levels of savings required to buy.
Even though FTBs [First Time Buyers] benefit from tax breaks (on
stamp duty and government-backed schemes on newbuild, such
as Help to Buy), the loan-to-value requirements of lenders make
home ownership unaffordable for many FTBs on average incomes.
The problem of raising the deposit is much worse in London,
where the mean FTB deposit is around £147,000 (2019),
equivalent to 180% of income; more than double what it was
before the financial crisis and nine times higher than in the mid-
1990s. The average deposit in all English regions, other than the
three Northern regions, is above the average full-time salary for
the region.
The median FTB deposit is lower, with English Housing Survey
data suggesting that in 2016 the median FTB over the previous
three years had bought with a deposit of £25,000 versus a mean
deposit of £42,000. Nevertheless, median deposits still represent a
considerable amount to save.
As a consequence, recourse to the “bank of mum and dad” has
become a prominent feature of home ownership (or general
reliance on family support), raising issues around entrenched
wealth inequalities… 12
11
ONS, First-time buyer housing affordability in England and Wales: 2017, 25 July
2018
12
Affordable Housing Commission, Making Housing Affordable Again: Rebalancing
the Nation’s Housing System, 23 March 2020, pp186-187
2. Low-cost home ownership

schemes in England
Background
One of the Labour Government’s responses to the difficulties faced by
first-time buyers in accessing home ownership was to develop a series
of low-cost home ownership schemes. Around 95,000 people were
assisted into home ownership under these schemes between 1997 and
2008. 13 No specific sales targets were set for schemes such as Open
Market HomeBuy or New Build HomeBuy in order “to ensure flexibility
within the programme.” 14
In 2010, the Coalition Government set out its initial position on
encouraging home ownership:
Grant Shapps: The Government are committed to helping those
who aspire to own their own home, through ensuring a return to
economic and financial stability. The Government are seeking to
achieve this through a programme of debt reduction and a
commitment to abolish the structural deficit in the life of this
Parliament. This will help to keep mortgage interest rates low and
improve credit availability.
The coalition agreement included a commitment to promote
shared ownership. While grant funding under the new investment
model for affordable housing announced in the spending review
will primarily target the new affordable rented product, there may
be some scope for delivery of low-cost home ownership as part of
the contractual arrangements with providers where this is
appropriate for local circumstances. 15
As part of the 2013 Budget the Coalition Government announced
additional measures to assist first-time buyers and those seeking to
move but struggling to obtain a mortgage, including Help to Buy and a
package of measures to increase the supply of low-deposit mortgages
for credit-worthy households. 16
The Autumn Statement and Spending Review 2015 saw the Chancellor
announce a Five Point Plan to increase home ownership:
This Spending Review sets out a Five Point Plan for housing to:
1. Deliver 400,000 affordable housing starts by 2020-21,
focussed on low-cost home ownership. This will include:
• 200,000 Starter Homes which will be sold at a 20%
discount compared to market value to young first time
buyers, with a £2.3 billion fund to support the delivery of
up to 60,000 of these, in addition to those delivered
through reform of the planning system
13
Communities and Local Government (CLG) Press Release, Budget will help first- time
buyers with new home loans, 12 March 2008
14
HC Deb 8 May 2008 c1078W
15
HC Deb 1 December 2010 c 848W
16
HC 1033, March 2013
Number 03668, 30 March 2021 12
• 135,000 Help to Buy: Shared Ownership homes, which will

allow more people to buy a share in their home and buy
more shares over time, as they can afford to. The scheme
will be open to all households earning less than £80,000
outside London and £90,000 in London, and will relax and
remove previous restrictions such as local authorities’ rights
to set additional eligibility criteria
• 10,000 homes that will allow a tenant to save for a deposit
while they rent. This will be in addition to 50,000
affordable homes from existing commitments
• at least 8,000 specialist homes for older people and people
with disabilities
[…]
2. Deliver the government’s manifesto commitment to extend the
Right to Buy to Housing Association tenants. The number of
tenants benefitting from the local authority scheme has increased
by 319% since 2012, and now extending the scheme will give 1.3
million households the opportunity to become home owners. The
government will launch a pilot of the Right to Buy with five
Housing Associations, to inform the design of the final scheme. 17
As part of Budget 2016, the Government said it would “explore options
for encouraging private investment in low-cost homeownership,
including the scope to use guarantees.” 18
The Conservative Government’s Housing White Paper – Fixing Our
Broken Housing Market (February 2017) – confirmed a continued
commitment to extending home ownership:
The Government will help people save for a deposit, buy with a
smaller deposit, buy at 20% below the market price, buy the
home they are renting from a social landlord, buy a share of a
home or save a deposit while paying a below market rent… 19
The Conservative and Unionist Party Manifesto 2019 reaffirmed the
commitment to home ownership, “one of the most fundamental
Conservative values”, and set out proposals to:
• encourage a new market in long-term fixed rate mortgages for
first-time buyers.
• enable councils to use developers’ contributions via the planning
process to discount homes in perpetuity by a third for local
people.
• maintain the Right to Buy for council tenants and the voluntary
Right to Buy scheme agreed with housing associations.
• reform shared ownership, making it fairer and more transparent. 20
The different home ownership schemes currently on offer are explained
in the following sections.
17
Autumn Statement and Spending Review 2015 pp40-42
18
HC901, Budget 2016, 16 March 2016, para 2.298
19
DCLG, Fixing Our Broken Housing Market, 7 February 2017, para. 4.7
20
The Conservative and Unionist Party Manifesto 2019, p29
2.1 Equity loan schemes

Equity loans help people to buy a home where they can't raise a
mortgage to cover the full price. When the buyer sells and moves on,
the equity loan is repaid as an equivalent proportion of the proceeds of
the sale. The repayment includes a share of any increase - or decrease -
in the value of the home.
The Labour administration introduced several equity loan schemes under
the HomeBuy banner. The Coalition Government announced the
introduction of the FirstBuy scheme, also a type of equity loan scheme,
during the 2011 Budget. FirstBuy was overtaken by the Help to Buy
equity loan scheme.
Help to Buy: Equity Loan (2013 – 2021)
In Budget 2013 the Chancellor announced the replacement of the
FirstBuy scheme:
From 1 April 2013, building on the success of First Buy, Help to
Buy: equity loan will be opened up to all those who aspire to own
a new build home.
The Government will:
• provide an equity loan worth up to 20 per cent of the value
of a new build home, repayable once the home is sold;
• significantly widen the eligibility criteria to ensure as many
people as possible are able to benefit. The maximum home
value will be £600,000 and there will be no income cap
constraint; and
• ensure that the scheme is open not only to first-time buyers
but also to all those looking to move up the housing
ladder. 21
The Help to Buy: Equity Loan scheme was restricted to new-build
properties and was not available for the purchase of a second home.
The equity loan was interest free for the first five years, after which
interest was charged. The Homes England Help to Buy Buyers’ Guide
(February 2018) provides further information about the scheme.
The scheme had the dual aims of improving access and affordability for
home buyers and encouraging developers to build more homes. It was
originally only intended to last three years. However, in Spring 2014 the
scheme was extended to 2020 and in November 2015 it was further
extended to 2021. 22
In February 2016 the Government launched a Help to Buy London
scheme (which increased the upper limit for the equity loan within
Greater London from 20% to 40%) in recognition of higher housing
costs in the capital.
Official statistics published in February 2021 show:
21
HC 1033, 20 March 2013
22
For a full timeline see Figure 1 on page 15 of the National Audit Office, Help to Buy:
Equity Loan scheme – progress review, HC2216 2017-19, 13 June 2019
Number 03668, 30 March 2021 14
• Over the period since the launch of the Help to Buy: Equity Loan
scheme (1 April 2013 to 30 September 2020), 291,903
properties were bought with an equity loan.
• The total value of these equity loans was £17.4 billion, with the
value of the properties sold under the scheme totalling £79.2
billion.
• Most of the home purchases were made by first-time buyers,

accounting for 82% (240,083) of all completions. 23
In June 2019 the National Audit Office (NAO) published a Help to Buy:
Equity Loan scheme – progress review (the findings are discussed in
section 7 of the paper).
Help to Buy: Equity Loan (2021 – 2023)
At the Autumn Budget 2018, the Government noted that “conditions in
the market have improved since 2013: there is a growing number of
high Loan to Value products available to first-time buyers, and housing
supply continues to increase” and announced that, from April 2021, a
new targeted Help to Buy: Equity Loan scheme would run for 2 years to
March 2023. 24
The new scheme is targeted at those who need most help into
homeownership – it is available for first-time buyers only, and for
houses with a market value up to new regional property price caps, as
set out in the table below. 25 These caps are set at 1.5 times the current
forecast regional average first-time buyer price, up to a maximum of
£600,000 in London.
Source: HM Treasury, Budget 2018, HC 1629, 29 October 2018, p64, table 4.2
The Government’s Help to Buy website and Homebuyers’ Guide provide
further information about the 2021-23 scheme. Constituents can
contact their local Help to Buy Agent to discuss the options available.
23
MHCLG Official Statistics, Help to Buy: Equity Loan scheme. Data to 30 September
2020, England, 18 February 2021
24
HM Treasury, Budget 2018, HC 1629, 29 October 2018, para 4.61
25
HM Treasury, Budget 2018, HC 1629, 29 October 2018, p64, table 4.2
The Help to Buy: Equity Loan scheme will end in March 2023 and
the Government currently has no plans to replace it.
By the time the scheme closes in 2023, the overall budget for the
scheme is forecast to be around £29 billion in cash terms and it is
expected to have supported a total of 462,000 households. 26
2.2 Shared ownership

Under this scheme applicants buy a leasehold property (flat or house) on
shared ownership terms. They buy a minimum (usually 25%) share of
the property and the remaining share, on which a subsidised rent is
payable, is owned by a housing association. Purchasers can buy
additional shares in the property as and when they can afford to do
so. 27 Staircasing is usually possible in minimum 10% tranches up to
100%. The scheme was originally open to all key workers, social
housing tenants and those in priority housing need but was extended to
all first-time buyers with an income of less than £60,000 on 14 May
2008. The income limits were more generous for applicants in London.
The 2015 Conservative Government committed to deliver 135,000
shared ownership properties by 2020/21 28 and subsequently
implemented several measures intended to take shared ownership
provision “to the next level”, including:
• making up to £4.1 billion of capital grant funding available
through the Shared Ownership and Affordable Homes
Programme (SOAHP) 2016-21 and opening the programme up
to the commercial housing sector;
• broadening the eligibility criteria for shared ownership, including
raising the maximum household annual income limit to £80,000
(£90,000 in London); and
• allowing households to move from one shared ownership
property to another. 29
Following the Autumn Budget 2017, the total budget for the SOAHP
2016-21 was £9.1 billion to 2020/21. 30 Whilst delivering shared
ownership was the primary focus of the SOAHP 2016-21, the Housing
White Paper (February 2017) marked a shift in policy to delivering a
wider range of affordable housing, including for social and affordable
rent. 31 The Affordable Homes Programme 2021-26 marks something of
a return to a focus on shared ownership (see below).
26
National Audit Office, Help to Buy: Equity Loan scheme – progress review, HC2216
2017-19, 13 June 2019, Summary, para 4
27
This process is known as staircasing.
28
HM Treasury, Spending Review and Autumn Statement 2015, Cm 9162, 25
November 2015, para 1.146
29
House of Commons Library briefing paper CBP08828: Shared ownership (England):
the fourth tenure?
30
HM Treasury, Autumn Budget 2017, HC 587, 22 November 2017, para 5.23
31
DCLG, Fixing Our Broken Housing Market, 7 February 2017, para 4.27
Number 03668, 30 March 2021 16
In addition to the standard shared ownership product, Homes England

offers two specific versions: Home Ownership for People with Long
Term Disabilities (HOLD) and Older Persons Shared Ownership (OPSO).
Information on all the shared ownership schemes can be found on the
Government’s Help to Buy website.
New national model for shared ownership
In 2019 the Government consulted on proposals for a new national
model for shared ownership with the objective of making it “fairer,
more affordable, and more consumer-friendly as well as a better model
for the market to deliver”. 32
The Government’s consultation response, (8 September 2020,
confirmed the key features of the new model:
• The minimum initial purchase share in a property will be
reduced from 25% to 10%.
• New shared owners will be allowed to buy additional shares in
their home in 1% increments for up to 15 years, with heavily
reduced fees. It will still be possible to staircase in larger
increments with the minimum additional share purchase
reduced from 10% to 5%.
• There will be a new 10-year, repair free period, during which
maintenance and repairs costs will be met by the housing
provider rather than the shared owner.
• The new model will give shared owners the option to end the
housing provider’s eight-week nomination period at four weeks
if they would prefer to pursue an open market sale of their
property. 33
The Government published a further technical consultation on the
implementation of the new model and is currently analysing feedback. 34
The new model will apply to shared ownership homes delivered through
the Government’s Affordable Homes Programme (AHP) 2021-26 from
1 April 2021. Shared ownership housing delivered through the planning
system will also be expected to be based on the new standard model.
The new AHP 2021-26 will provide £11.5 billion grant funding over five
years and is expected to deliver up to 180,000 new affordable homes. 35
The Government expects that around half of these new homes will be
available under the new model for shared ownership.
32
MHCLG, Making home ownership affordable: Discussion paper, 28 August 2019
33
MHCLG, Making home ownership affordable: Summary of responses and the
Government response to the discussion paper proposing a new model for Shared
Ownership, 8 September 2020
34
MHCLG, New model for Shared Ownership: technical consultation, 19 November
2020
35
MHCLG, Jenrick unveils huge £12 billion boost for affordable homes, 8 September
2020
The Commons Library briefing paper CBP08828, Shared ownership

(England): the fourth tenure? provides further information.
2.3 Rent to Buy

On 26 September 2014, the Coalition Government launched a new
£400 million Rent to Buy scheme to boost building of new rental homes
and extend home ownership. Under the Rent to Buy scheme, the
Government offered low cost loans to providers to build homes to be let
at sub-market rent for a minimum of 7 years to households who had
never previously owned a home. The tenants could then use this fixed
period of support to save for a deposit to buy the home they were
renting or a different home. Providers had up to 16 years to pay back
the low-cost loans. 36 Following the Government’s Autumn Statement
(November 2015) the Rent to Buy programme was closed to new
applications and activity under the programme has ended. 37
Capital grant funding to deliver Rent to Buy schemes was made
available to registered providers through the Government’s Shared
Ownership and Affordable Homes Programme (SOAHP) 2016-21. The
programme was initially expected to deliver starts on site for at least
10,000 for Rent to Buy homes. The homes had to be let at an
Intermediate Rent not exceeding 80% of the local market rent for an
equivalent home for a minimum of five years. During this time it was
expected that tenants would save for a deposit to purchase their home.
After the initial five-year letting period the provider may continue
offering the property as Rent to Buy; sell the home on an outright basis
with the tenant being given the right of first refusal; or retain and
convert the home to either an affordable or market rent home. 38
The Affordable Homes Programme (AHP) 2021-26 will provide
£11.5 billion grant funding from 1 April 2021 over five years. 39 Funding
will again be available for Rent to Buy schemes. Home England’s Capital
Funding Guide: Rent to Buy provides further information about the
requirements for developing affordable housing as Rent to Buy. Homes
England does not collect data on the number of tenants who have
transitioned from renting to full ownership. 40
More information on Rent to Buy homes can be found on the
HomeOwners Alliance website. The website notes that there is limited
availability and eligibility criteria can differ depending on the provider
the property is offered through. Providers may also use different names
36
DCLG, New 'Rent to Buy' scheme to help young people save and move up housing
ladder, 26 September 2014
37
GOV.UK, Rent to Buy 2015 to 2017: prospectus withdrawn [Accessed 10 March
2021]
38
Homes and Communities Agency, Shared Ownership and Affordable Homes
Programme 2016 to 2021 Prospectus, 13 April 2016
39
HCWS440, 8 September 2020
40
Written PQ 124309, 2 December 2020
Number 03668, 30 March 2021 18
for the product, e.g. Try Before You Buy, Rent Save Buy, Rent to Save,
Rent to Own, or Intermediate Market Rent. 41
2.4 NewBuy Guarantee

In Laying the Foundations: A Housing Strategy for England (2011) the
Coalition Government set out plans to “get the housing market
moving” through a variety of measures, including the development of
what was then called a “mortgage indemnity scheme:”
...supporting a new and innovative new build indemnity scheme
led by the Home Builders Federation and Council of Mortgage
Lenders to provide up to 95 per cent loan to value mortgages for
new build properties in England, backed by a housebuilder
indemnity fund.
Grant Shapps declared the renamed NewBuy Guarantee Scheme, “open
for business” on 12 March 2012. 42 He said:
From today three leading high street lenders and seven of the
country's biggest building firms will begin to offer mortgages on
newly-built properties to people with just a five per cent deposit; a
financial product not available anywhere else in the market. Other
leading names, including smaller housebuilders, are expected to
follow their lead in the coming weeks and months.
Today's deals will mean that instead of a typical buyer requiring a
£40,000 deposit for £200,000 property, they will now only need
£10,000. The Government and housebuilders will help provide
security for the loan, so if the house is then sold for less than the
outstanding mortgage total the lender will be able to recover its
loss.
The scheme, which has attracted strong support from many of the
country's biggest house-builders and mortgage lenders, will offer
help for up to 100,000 buyers who would otherwise be frozen
out of the market.
[…]
The NewBuy Guarantee will support an estimated 50,000 jobs in
construction and related industries by increasing demand for
newly-built homes.
The scheme will also help jumpstart the stalled housing market as
people begin to move, ensuring more newly-built and older
properties become available to buy. 43
The notes to the press release provided more detailed information on
the operation of the scheme.
In April 2014, the NewBuy scheme was brought under the Help to Buy
umbrella – see below.
41
https://hoa.org.uk/advice/guides-for-homeowners/i-am-buying/rent-to-buy/
[Accessed 10 March 2021]
42
DCLG Press Release, Unlocking aspiration for a new generation of home buyers,
2012
43
Ibid.
2.5 Mortgage guarantee schemes

Help to Buy: mortgage guarantee scheme (2013-
2016)
The other strand of the Help to Buy scheme announced by the
Chancellor as part of the 2013 Budget was the development of a new
mortgage guarantee scheme:
The Government will create a major new Help to Buy: mortgage
guarantee to increase the availability of mortgages on new or
existing properties for those with small deposits.
The Help to Buy: mortgage guarantee, a temporary scheme that
will run for three years from January 2014 44, will:
• increase the supply of high loan-to-value mortgages by
offering a government guarantee to lenders who offer
mortgages to people with a deposit of between 5 per cent
and 20 per cent;
• be open not only to first-time buyers but also to existing
homeowners;
• have no income cap constraint; and
• be available on homes with a value of up to £600,000.
Help to Buy: mortgage guarantee will, subject to the final design,
make available up to £12 billion of government guarantees,
sufficient to support £130 billion of high loan-to-value
mortgages. 45
It was launched for applications in October 2013. There is an
infographic on the scheme. The Treasury also published a scheme
outline.
The 2013 Autumn Statement (December 2013) hailed the success of
both Help to Buy schemes:
The government’s Help to Buy schemes are supporting home
ownership. Over 18,000 reservations for new homes have been
made under the equity loan scheme since it was launched in April
2013. In the month since the Help to Buy: mortgage guarantee
scheme rules were published, more than 2,000 people have put in
applications to lenders totalling £365 million of new mortgage
lending. Over 900 developers have registered to deliver the equity
loan scheme, and more than 65% of the mortgage market have
committed to participate in the mortgage guarantee scheme. 46
The Help to Buy: mortgage guarantee scheme closed to new loans on
31 December 2016 as planned. Participating mortgage lenders were
able to continue to complete loans until 30 June 2017 where they had
an application date on or before 31 December 2016. 47
Official statistics published in September 2017 showed that:
44
The scheme was launched early for applications in October 2013.
45
HM Treasury, Budget 2013, HC 1033, March 2013
46
Cm 8747, December 2013, para 1.225
47
HM Treasury, Help to Buy: mortgage guarantee scheme Quarterly Statistics, 28
September 2017, p.3
Number 03668, 30 March 2021 20
• 104,763 mortgages were completed with the support of the

Help to Buy: mortgage guarantee scheme.
• Of these, 80% were purchases by first-time buyers.
• The total value of mortgages supported by the scheme was £15.8

billion.
• Compared to total mortgage completions in each region, the

scheme supported a higher proportion of mortgages in the
East of England and Scotland, and a lower proportion in the
South East and London.
• The mean value of a property purchased or remortgaged through

the scheme was £159,170, compared to a national average house
price of £223,000. 48
The number of mortgage products available at 95% loan-to-value (LTV)
increased from October 2013 to June 2017 from 43 to 261. 49
The 95% mortgage guarantee scheme - 2021
At Budget 2021 the Chancellor, Rishi Sunak, announced a new
mortgage guarantee scheme to help “turn Generation Rent into
Generation Buy.” 50 The scheme will enable UK homebuyers to secure a
mortgage up to £600,000 with a 5% deposit:
Mortgage guarantee scheme – The government will introduce
a new mortgage guarantee scheme in April 2021. This scheme
will provide a guarantee to lenders across the UK who offer
mortgages to people with a deposit of just 5% on homes with a
value of up to £600,000. Under the scheme all buyers will have
the opportunity to fix their initial mortgage rate for at least five
years should they wish to. The scheme, which will be available for
new mortgages up to 31 December 2022, will increase the
availability of mortgages on new or existing properties for those
with small deposits. 51
Several of the country’s largest lenders including Lloyds, NatWest,
Santander, Barclays and HSBC will be offering the 95% mortgages from
April 2021, with more lenders, including Virgin Money, to follow shortly
after. 52
The availability of high loan-to-value (LTV) mortgages reduced
significantly during the Covid-19 pandemic, as lenders withdrew higher-
risk products in light of market uncertainties. 53 The mortgage guarantee
scheme will limit loan losses for lenders issuing mortgages with a LTV
48
HM Treasury, Help to Buy: mortgage guarantee scheme Quarterly Statistics, 28
September 2017
49
HM Treasury, Mortgage guarantee scheme - outline, March 2021, para 1.3
50
HM Treasury, Budget Speech 2021, 3 March 2021
51
HM Treasury, Budget 2021, HC 1226, 3 March 2021, para 2.25
52
HM Treasury, Budget Speech 2021, 3 March 2021
53
High loan-to-value mortgages are often seen as riskier by lenders as they are more
vulnerable to negative changes in property prices - meaning people can end up
holding more debt than their home is worth.
between 91 and 95%. This is intended to encourage banks and building

societies to return to offering high LTV mortgages to enable more
households with smaller deposits to access home ownership.
It is intended to be a temporary measure and will be open for new
mortgage applications from April 2021 to December 2022.
To be eligible for a guarantee under the scheme a mortgage will need
to:
• be a residential mortgage (not second homes) and not buy-to-let;
• be taken out by an individual or individuals rather than an
incorporated company;
• be on a property in the UK with purchase value of £600,000 or
less;
• have a loan-to-value of between 91 per cent and 95 per cent;
• be originated between the dates specified by the scheme;
• be a repayment mortgage and not interest-only; and
• meet standard requirements in terms of the assessment of the
borrower’s ability to pay the mortgage, for example a loan-to-
income and credit score test.54
The scheme will be based on the Help to Buy: Mortgage Guarantee
scheme that operated between 2013 and 2016 (see above).
The Treasury’s mortgage guarantee scheme - outline (March 2021) -
provides further information about the operation of the scheme.
2.6 Help to Buy: ISA (closed to new accounts)

In the March 2015 Budget, the Chancellor announced an expansion of
the Help to Buy scheme with the introduction of a Help to Buy: ISA. The
ISA was launched in autumn 2015.
First-time buyers saving through a Help to Buy: ISA receive a
Government bonus of 25% of the amount saved. The Government
contributes a maximum of £3,000 for £12,000 of savings. The bonus is
calculated and paid when an individual buys their first home; the
discount is calculated per person, rather than per household, which
means that people buying together can both receive a bonus.
The bonus is available for people buying their first home up to a value
of £250,000 outside London and £450,000 in London. 55
The Help to Buy: ISA closed to new accounts on 30 November 2019.
Those who opened a Help to Buy: ISA account before 30 November
2019 can continue saving into the account until November 2029.
The Government has produced a Help to Buy: ISA factsheet.
54
HM Treasury, The mortgage guarantee scheme outline, 3 March 2021, p7
55
HM Treasury, Help to Buy: ISA, scheme outline, March 2015
Number 03668, 30 March 2021 22
As at 30 September 2020, 359,250 property completions had been

supported by the Help to Buy: ISA scheme and 472,702 bonuses had
been paid, with an average bonus value of £1,028. 56
2.7 The lifetime ISA

Budget 2016 announced the introduction of a new savings product
which can be used by first-time buyers to help them buy a property:
The Lifetime ISA
The government wants to help young people save flexibly for the
long term and ensure they do not have to choose between saving
for retirement and saving for their first home. The Budget
announces that from 6 April 2017 any adult under 40 will be able
to open a new Lifetime ISA. They can save up to £4,000 each year
and will receive a 25% bonus from the government on every
pound they put in.
Contributions can continue to be made with the bonus paid up to
the age of 50. Funds can be used to buy a first home with the
government bonus at any time from 12 months after opening the
account, and can be withdrawn from the Lifetime ISA with the
government bonus from age 60 for use in retirement.
The government will set the limit for property purchased using
Lifetime ISA funds at £450,000. This limit will apply nationally.
People can continue to open a Help to Buy: ISA until November
2019, as planned. They can also choose to open a Lifetime ISA,
but will only be able to use the government bonus from one of
their accounts to buy their first home. During the 2017-18 tax
year, those who already have a Help to Buy: ISA will be able to
transfer the savings they have built up into the Lifetime ISA and
still save an additional £4,000.
Whilst this is a product aimed at encouraging saving for the long
term, the government understands that circumstances change so
wants to ensure that people can access their own money if they
need it whilst also keeping an incentive to leave funds invested for
the long term. The government will consider whether Lifetime ISA
funds plus the government bonus can be withdrawn in full for
other specific life events in addition to buying a first home. 57
The Lifetime ISA was introduced in April 2017. Further information
about the ISA is available on GOV.UK.
2.8 Starter Homes

This was one of the 2015 Government’s flagship schemes for increasing
housing supply and improving access to home ownership for first-time
buyers.
The Conservative Party Manifesto 2015 included a commitment to
deliver 200,000 discounted starter homes for first-time buyers under the
age of 40 over the course of the Parliament. 58 The November 2015
56
HM Treasury, Help to Buy: ISA Scheme Quarterly Statistics: December 2015 to 30
September 2020, 18 February 2021
57
Ibid., paras 1.108-11
58
Conservative Party, Conservative Party Manifesto 2015, 14 April 2015, p51
Spending Review and Autumn Statement subsequently provided

£2.3 billion to support the delivery of 60,000 starter homes, in addition
to those that were expected to be delivered through reform of the
planning system. 59
The Housing and Planning Act 2016 provides the statutory framework
for the delivery of starter homes. The Act defines starter homes as new
homes costing up to £250,000 (£450,000 in London), to be available at
a minimum 20% discount on market value to eligible first-time buyers.
The legislation includes provisions to introduce a general duty on
planning authorities in England to promote the supply of starter homes,
and a specific duty to require a minimum number or proportion of
starter homes on certain residential development sites.
Between 2015 and 2018, the Government’s policy towards starter
homes shifted. The starter homes legislative provisions were never
commenced and funding earmarked for their development was
reallocated. By July 2019, the Ministry of Housing, Communities and
Local Government (MHCLG) had spent £192 million on remediating
land intended for starter homes, but no homes had been built. In
January 2020 the Department announced that the starter homes
policy was no longer being pursued. 60
The Commons Library briefing paper CBP07643, Starter Homes for First-
Time Buyers (England) provides further information about the scheme.
2.9 First Homes

In February 2020, the Conservative Government launched a
consultation on its new First Homes initiative, which aims to deliver
discounted homes for local first-time buyers. A summary of responses
and the Government’s response was published in August 2020. 61
Unlike Starter Homes, First Homes will offer a larger discount to buyers
that is retained in perpetuity, so future generations can benefit from the
discount. Local authorities will be able to prioritise these homes for local
residents and key workers.
The scheme will have the following features:
• First Homes will be sold with a minimum discount of 30 per
cent off the market price, but local areas will be able to set
a larger discount to ensure the homes are affordable to
local people.
• Buyers will purchase First Homes in the usual way and will
have access to conventional mortgage products.
• When owners of First Homes decide to move up the ladder,
their home will be independently valued. When they sell
59
HM Treasury, Spending Review and Autumn Statement 2015, 25 November 2015,
para 1.146
60
Public Accounts Committee, Starter Homes: Thirty-First Report of Session 2019–21,
HC88, 9 December 2020, p8, para 3
61
MHCLG, First Homes Design and Delivery: Summary of responses to the consultation
and the Government’s response, 6 August 2020
Number 03668, 30 March 2021 24
the home, the discount will be passed on to the new owner

with the discount (of at least 30%) applied to the new
value.
• This means homes will always be sold below market price
and local communities will benefit for generations to come,
with local authorities continuing to allocate these homes to
first-time buyers and able to prioritise local workers.
• First Homes are for people to live in, so we won’t allow
them to be used as holiday homes or as buy to lets. These
are for local people to take their first step onto the
ladder. 62
In the first instance, the 30% discount will be delivered via the existing
planning system: through section 106 developer contributions and
through an amendment to the policy on exception sites. Unlike Starter
Homes, First Homes are not dependent on a legislative framework. In
the longer term:
...reforms to the planning system to make it more accessible,
digital, efficient and transparent will support the delivery of First
Homes by bringing more land forward for development and with
a new Infrastructure Levy, which covers affordable housing
provision and could be used for on-site delivery of First Homes. 63
The Government intends to carry out a 1,500 homes pilot delivered
through the Affordable Homes Programme. 64 It has not announced a
timetable for implementing First Homes or a target for how many
homes it wants to be delivered.
2.10 Discounted Sales

Some councils and housing associations have a Discounted Sales
scheme through which new homes are sold at a 25%-50% discount.
Criteria will be set locally, and buyers will usually need to have a local
connection to the area. Constituents are advised to contact their local
council to ask about Discounted Sales opportunities. Not all councils and
housing associations offer the scheme.
2.11 Failed housing transactions

It is estimated that over a quarter (estimates vary from 25% to 33%) of
all home buying transactions fail. 65
In October 2017, the Government issued a call for evidence seeking
views on how to improve the home buying and selling process in
England. 66
62
MHCLG, A Guide to First Homes, February 2020
63
MGCLG, First Homes: Getting you on the ladder, August 2020
64
Ibid.
65
MHCLG, Improving the homebuying and selling process - presentation given at the
Westminster Policy Forum, London, 17 October 2018
66
DCLG, Improving the home buying and selling process: call for evidence, 22 October
2017
The Government’s consultation response, published on 8 April 2018,

concluded that there is no ‘silver bullet’ – no single fundamental change
which will improve the process. Instead, the Government proposed
several smaller, incremental changes to the current system, which when
taken together are intended to make the process “quicker, cheaper and
less stressful”. 67
The Commons Library briefing paper CBP06980, Improving the home
buying and selling process in England provides an overview of the home
buying and selling process, stakeholder concerns, and Government
proposals to improve the process.
67
MHCLG, Improving the home buying and selling process: Summary of responses to
the Call for Evidence and government response, 8 April 2018
Number 03668, 30 March 2021 26
3. Purchase schemes for social

housing tenants
3.1 Right to Buy and Right to Acquire
Around 80% of social housing tenants have a statutory Right to Buy or
Acquire the home in which they live at a discount.
Under the Right to Buy most council tenants, most former council
tenants living in homes transferred to a housing association, and most
housing association tenants who have lived in their home since before
15 January 1989, have a statutory Right to Buy their home with a
discount on the open market value.
As a rule, assured tenants of housing associations do not have the Right
to Buy the home in which they live on the same basis as council tenants.
For more information see the Commons Library briefing paper (but see
section 3.2 below).
Measures to reduce the qualifying period before tenants become
eligible to apply for the Right to Buy and Right to Acquire from five to
three years were included in the Deregulation Act 2015. These
measures came into force on 26 May 2015. Information on the Right to
Buy can be found in a MHCLG booklet: Your right to buy your home: a
guide.
Under the Right to Acquire scheme, housing association tenants living in
homes built or acquired with public subsidy since April 1997, and those
living in homes transferred from a local authority to a housing
association from the same date, have a statutory Right to Acquire their
home with a discount on the open market value. The level of the
discount is subject to a maximum limit of between £9,000 and £16,000
depending on the local authority area in which the property is situated.
Some properties are exempt, including those in designated rural areas
(generally areas with a population of 3,000 or less) and supported
housing for people with special needs. Additional information can be
found on the GOV.UK website.
3.2 An extended Right to Buy

The 2015 Conservative Government entered into an agreement with
the National Housing Federation (NHF) to extend the Right to Buy (RTB)
to most assured housing association tenants on a non-statutory basis.
An evaluation of an initial pilot with five housing associations was
published in January 2017. 68 The Autumn Statement 2016 announced
Government funding for a large-scale regional pilot. After some delay,
the Autumn Budget 2017 announced the pilot would go ahead in the
68
Centre for Regional Economic and Social Research, The Pilot Programme for the
Voluntary Right to Buy for Housing Associations: An Action-Learning Approach, 11
January 2017
Midlands with £200 million of Government funding. The pilot was

launched in August 2018. An independent evaluation of the Midlands
pilot scheme was published on 8 February 2021. 69
The Government has not committed to a date for national
implementation of the voluntary RTB for housing association tenants.
Detailed background on extending the RTB to housing association
tenants can be found in Commons Library briefing paper CBP07224, A
voluntary Right to Buy for housing association tenants in England.
3.3 Cash incentive schemes

In addition to the schemes described above, council tenants may benefit
from Cash Incentive Schemes at the discretion of their landlord. These
schemes involve a grant which is issued to tenants to help them to buy
a home on the open market, thereby freeing up a social rented home
for new tenants.
A Regulatory Reform Order to allow local authorities to run schemes
without the Secretary of State's consent came into force on
1 April 2003. 70 The Order allows local authorities to set the size of grant
payable taking into account the local housing market. All grants must
be means tested. There is no central funding for these schemes; where
they exist, they are funded from the local authority’s capital resources.
In February 2015, the Chancellor announced an £84 million fund over
two years to offer social tenants up to £20,000 across England and up
to £30,000 in London to buy a new home on the open market. The
Social Mobility Fund was aimed at tenants who would have qualified for
the Right to Buy to leave their social rented home and buy a property on
the open market. Local authorities were able to bid for funding for the
scheme in 2015. 71 The amount of discount offered for applicants was
below that available under Right to Buy. The Treasury said this was
because tenants would benefit from the “substantial additional benefit”
of being able to choose their home. 72
3.4 Social HomeBuy

The Social HomeBuy scheme is aimed at assisting tenants of social
landlords who do not qualify for the Right to Buy or Right to Acquire or
who cannot afford to exercise these rights, to buy a share of their
rented home.
This discretionary scheme operates on a shared ownership basis –
tenants buy a minimum share of 25% of the value of the property. The
purchase attracts a discount which is the Right to Acquire discount
69
MHCLG, Evaluation of Midlands Voluntary Right to Buy Pilot Final Report, February
2021
70
Regulatory Reform (Schemes under s.129 of the Housing Act 1988) (England) Order
2003 (SI 2003/986)
71
DCLG, Right to Buy social mobility fund prospectus, February 2015
72
‘Osborne offers tenants cash as right to buy alternative’, Inside Housing, 27 February
2015 [subscription required]
Number 03668, 30 March 2021 28
(generally between £9,000 and £16,000 - depending upon the local

authority area in which the property is located), pro-rata to the share
purchased. Since 1 April 2008 new applicants have also been entitled to
receive a discount on further shares bought.
Rent is payable on the un-owned share of the property. Staircasing is
allowed in minimum 10% tranches up to 100%. Exemptions operate in
rural areas that are also exempt from the Right to Acquire and to
housing specifically for those with long term disabilities or special needs,
or housing specifically provided for the elderly.
3.5 A Right to Shared Ownership

On 17 October 2019 the Government confirmed its intention to
introduce a new Right to Shared Ownership. 73 Eligible tenants in new
housing association properties delivered with Government grant will
have an automatic right to buy a minimum 10% share of their home,
with the ability to buy further shares over time and staircase to full
ownership. Unlike Right to Buy, the scheme does not involve a discount
for the tenant. The requirements regarding rent, service charges,
maintenance and repairs for the Right to Shared Ownership will be the
same as for the new model for shared ownership (see section 2.2).
Certain categories of property will be exempted from the scheme,
including: local authority homes; homes in designated protected areas
and rural exemption sites; and specialist homes for older, disabled and
vulnerable people.
MHCLG published Right to Shared Ownership: initial guidance for
registered providers (8 September 2020) which outlines the main
features of the scheme, including eligibility criteria.
A Right to Shared Ownership will be available on the vast majority of
new rented homes delivered through the Affordable Homes Programme
(AHP) 2021-26 from April 2021.
The Government has also committed to work with housing associations
on a voluntary basis to determine what offer could be made to those in
existing housing association properties. 74
(England): the fourth tenure? provides further information.
73
HCWS21, 17 October 2019
74
Ibid.
4. Stamp duty land tax

Between 2014 and 2017 three reforms to stamp duty land tax (SDLT)
charged on the sale of residential property were announced. These
reforms were designed, to differing degrees, to encourage home
ownership, particularly for first-time buyers:
• In the 2014 Autumn Statement then-Chancellor, George
Osborne, announced that the ‘slab’ structure of SDLT would be
replaced with a ‘slice’ structure, with effect from 4 December
2014. 75 Rather than successively higher rates of tax applying to
the entire property price, the tax would be charged with a series
of marginal rates applying only to the part of the part of the price
falling within each band. Provision for this was included in the
Stamp Duty Land Tax Act 2015.
• In the 2015 Autumn Statement Mr Osborne announced that from

1 April 2016 higher rates of SDLT would be charged on purchases
of additional residential properties (above £40,000), such as buy
to let properties and second homes. The higher rates would be
3 percentage points above existing rates. The Government
consulted on how the new regime would work, and confirmed
the final design of the tax regime in the 2016 Budget. 76 Provision
to this effect was made by s128 of the Finance Act 2016.
• In the 2017 Autumn Budget then-Chancellor Philip Hammond

announced that for first-time buyers, the price at which a property
became liable for SDLT would be set at £300,000. The relief was
introduced with immediate effect, but does not apply to
purchases of properties worth over £500,000. 77 Provision for the
new relief was made by s41 of the Finance Act 2018.
HMRC publishes annual statistics on SDLT. In 2019/20 it raised £11.6
billion, of which receipts from residential properties accounted for
£8.4 billion. 78 HMRC’s survey also gives figures for the number of
transactions to have benefited from first-time buyers’ relief:
First time buyers’ relief (FTBR) transactions
• The total amount of SDLT relieved due to FTBR in 2019 to
2020 was estimated at £541 million.
• London and the South East accounted for £262 million in
2019 to 2020, which was just over 48% of the total.
• 222,700 transactions benefited from first time buyers’ relief
(FTBR) in 2019 to 2020. This is an increase from the 2018
to 2019 figure of 218,900.
75
HC Deb 3 December 2014 c316
76
HC Deb 16 March 2016 c961. For guidance on the application of the higher rates
see, HMRC, SDLT: higher rates on purchases of additional residential properties,
updated March 2021
77
HC Deb 22 November 2017 cc1059-60. For guidance on the coverage of this relief
see, HMRC, SDLT: relief for first time buyers, updated March 2021
78
HM Revenue & Customs, UK Stamp Tax statistics 2019 to 2020, October 2020
Number 03668, 30 March 2021 30
• The average amount relieved per transaction was £2,400.

London had the highest average relief at £4,300 and
Northern Ireland had the lowest at £900. This reflects the
different regional house prices.
• London, the South East and the East of England all tied for
the highest percentage (25%) of residential transactions
that were beneficiaries of first-time buyers’ relief. The North
East has the lowest percentage of transactions claiming first
time buyers relief (14%).
More recently, the Chancellor Rishi Sunak introduced a temporary SDLT
holiday as part of the Government response to the Covid-19 pandemic.
The nil rate band (NRB) for residential house sales was increased on
8 July 2020, from £125,000 to £500,000. 79 This relief was due to end
on 31 March 2021 but has been extended 30 June 2021. An NRB of
£250,000 will apply from 1 July to 30 September 2021. 80 Guidance on
this has been published by HMRC. 81
Further details on all of these developments are set out in the Commons
Library briefing paper CBP7050, Stamp duty land tax on residential
property.
79
HC Deb 8 July 2020 c976-7
80
HC Deb 3 March 2021 c254
81
HMRC, Extension of the temporary increase to the SDLT NRB for residential
properties, 3 March 2021. See also, HMRC, SDLT Manual, para SDLTM00055,
retrieved March 2021
5. London
The Greater London Authority’s webpage on Buying an affordable
home provides information on the main affordable home ownership
schemes available in the capital: Shared Ownership, Help to Buy, First
Dibs for Londoners (a voluntary scheme where developers and housing
associations commit to restricting the marketing and sale of new build
homes up to £350,000 to UK residents only for three months before
any overseas marketing can take place), and Discount Market Sale.
The London Living Rent scheme offers Londoners on average incomes a
below-market rent, helping them to save for a deposit to buy a home.
Prospective buyers can search for affordable properties through
the Homes for Londoners search tool.
The Mayor’s London Housing Strategy (May 2018) contains the
following commitment:
Ensuring homes are genuinely affordable: In recent years,
Londoners have understandably become suspicious of the term
‘affordable’. The Mayor wants Londoners to be confident that
more new homes will be genuinely affordable. He will create clear
definitions of which homes are affordable for Londoners on low
and middle incomes to rent and buy. He will invest in homes
based on social rent levels for Londoners on low incomes. He will
invest in London Living Rent homes for middle income Londoners
struggling to save for a deposit. He will invest in shared ownership
homes for Londoners who cannot afford to buy on the open
market. The Mayor will also encourage innovative forms of
affordable housing but will set tests make sure these homes are
genuinely affordable to Londoners. 82
82
Mayor of London, London Housing Strategy, May 2018, Executive Summary, Para 5
Number 03668, 30 March 2021 32
6. Wales, Scotland and Northern

Ireland
The devolution of housing policy to Scotland, Wales and Northern
Ireland is resulting in increasingly diverse approaches in certain areas, in
particular the Right to Buy policy. 83
Scotland
The Scottish Government’s Low-cost Initiative for First Time Buyers (LIFT)
includes two schemes:
• the New Supply Shared Equity scheme to allow first-time buyers
to buy a new-build property from a council or housing
association; and
• the Open Market Shared Equity scheme to allow first-time buyers
to buy a property (within certain price thresholds) on the open
market.
There are two Help to Buy (Scotland) schemes:
• Help to Buy (Scotland): Affordable New Build – helps first time
buyers and existing homeowners to buy new-build homes in
Scotland from a participating home builder (n.b. new
applications for this scheme closed on 5 February 2021).
• Help to Buy (Scotland): Smaller Developers – helps people buy a
new-build home from small and medium-sized house builders.
The First Home Fund is a £200 million shared equity pilot scheme to
provide first-time buyers with up to £25,000 to help them buy a
property that meets their needs and is located in the area where they
want to live. It can be used to help buy both new-build and existing
properties.
The Right to Buy scheme ended for council and housing association
tenants in Scotland on 31 July 2016. 84
Information on all the home ownership schemes in Scotland is available
on mygov.scot: Help to buy your home.
The Scottish Parliament Information Centre (SPICe) briefing paper -
Buying a home: Scottish Government support (September 2018) -
provides context to home ownership in Scotland, outlines the schemes
to assist people to buy their own home, and provides comment on
these schemes.
Wales
The Welsh Government had planned to launch its mortgage guarantee
scheme NewBuy Cymru on 3 June 2013; however, press reports in
83
For further information see Commons Library briefing paper CBP07174, Comparing
the Right to Buy in England, Scotland, Wales and Northern Ireland
84
Scottish Government webpage on Council Housing [Accessed 12 March 2020]
April 2013 indicated that key stakeholders had withdrawn from the
scheme in response to the Westminster Government’s announcement
of Help to Buy.
Subsequently, Help to Buy - Wales was launched on 2 January 2014.
The scheme provides equity loans for homes up to £300,000, for first-
time buyers and home movers who have a 5% deposit. 85 At
31 December 2020, a total of 11,587 properties had been purchased
under Help to Buy - Wales since its introduction on 2 January 2014.
Most homes purchased (75%) have been for first-time buyers. 86
In 2016 the Welsh Government commissioned an independent
evaluation of Help to Buy: Wales. 87
The other key schemes to help people in Wales own their own home
include:
• Shared Ownership – Wales: shared ownership scheme allowing
the purchase of between 25% to 75% of a property with rent
being paid on the remaining share.
• Homebuy – Wales: equity loan scheme for those who meet
specific criteria, providing a loan of between 30% to 50% to
assist in buying a property.
• Rent to Own – Wales: new-build scheme for those looking to
save towards a mortgage deposit, in which 25% of rent paid
will be returned to help purchase the home.
The Right to Buy (and associated rights) for council and housing
association tenants in Wales ended on 26 January 2019. 88
The Welsh Government website provides further information for home
buyers: Getting help to buy a home.
Northern Ireland
The Northern Ireland equivalent of the Right to Buy will be abolished for
housing association tenants in August 2022. 89 The NI Executive intends
to consult on ending the Right to Buy scheme for council tenants. 90
Information on low-cost home ownership schemes in Northern Ireland
can be found on the nidirect.gov website.
85
Nb. The eligibility criteria for the Help to Buy - Wales equity loan scheme differ from
the scheme in England.
86
Welsh Government, Help to Buy - Wales (Shared Equity Loan Scheme): October to
December 2020, 28 January 2021
87
Welsh Government, Evaluation of the Help to Buy - Wales scheme: interim
evaluation, 9 March 2016
88
Welsh Government, Right to Buy to end in Wales this month, 9 January 2019
89
In Northern Ireland both council and housing association tenants are eligible for the
House Sales Scheme.
90
NI Communities Department, The Right to a Home, 20 November 2020
Number 03668, 30 March 2021 34
7. Comment on the impact of

home ownership schemes
7.1 Labour’s schemes: boosting supply or
house price inflation?
Prior to the market downturn in 2007/08, one of the key concerns
expressed by housing commentators was that the promotion of
subsidised shared ownership/equity schemes might further inflate house
prices if unaccompanied by an overall increase in housing supply. Dan
Kemp, senior fund research analyst at stockbroker Christows, said:
Far from being a boon to those in need, it is actually an
encouragement to invest in an already inflated asset class, which
could have disastrous longer-term effects on the housing market,
and in particular on first-time buyers. 91
An inquiry into low-cost home ownership assistance by the Public
Accounts Committee over 2006-07 acknowledged the potential impact
of subsided shared ownership schemes on the market and
recommended improved modelling by the Department, particularly
focused on local markets. 92 In response, DCLG said there was no
evidence that low-cost home ownership assistance was increasing
demand in property “hot spots” but agreed that there was value in
understanding the impact of schemes on local property prices. The
Department said it would consider ways in which this could be done. 93
The Labour Government made a commitment to increase the supply of
housing. Homes for the Future, the Housing Green Paper (2007), set out
a target to deliver 2 million homes by 2016 and 3 million by 2020. 94
However, the onset of the credit crunch and the drop in mortgage
availability impacted on these house-building targets as the building
industry scaled back the number of homes in construction. 95 Reports at
the time indicated that the shared ownership element of the National
Affordable Housing Programme was at risk, as associations were finding
it more expensive to raise the necessary private finance. 96
In July 2008 the Housing Minister reported on progress against the key
targets set out in the 2007 Housing Green Paper:
• almost 200,000 additional homes in 2006-07 – an increase
of more than 50 per cent compared with 130,000 in 2001-
02
• provisional figures show that around 30,000 social rented
homes were delivered in 2007-08
91
‘Building on Brown’s cheap mortgages plan,’ Financial Times Money, 28 May 2005
92
Committee of Public Accounts, Nineteenth Report of 2006-07, A foot on the
ladder, HC134, March 2007
93
Cm 7077, May 2007, p44
94
CLG, Cm 7191, p7
95
BBC News, Housing decline hits construction, 31 March 2008
96
The Observer, “Credit crunch hits affordable homes plan, 13 April 2008
• around 24,000 households were helped into low-cost

home ownership in 2007-08
• identification of suitable surplus public sector sites with
capacity for some 140,000 homes
• 104 out of 150 Local Area Agreements including housing
supply as a priority, 102 with Affordable Housing as a
priority. 97
At the same time, the Minister acknowledged difficulties facing the
housing market and set out the Government’s response. Information on
most of the Labour Government’s initiatives can be found in Facing the
housing challenge: action today, innovation for tomorrow. 98 The 2009
Budget contained measures aimed at producing a “robust supply
response.” 99
On shared equity schemes, the Chartered Institute of Housing (CIH)
expressed support for measures to help individuals realise aspirations to
own their own homes and to enable more people to share in the equity
of their homes, but did not want this to take place at the expense of
delivering more rented homes:
CIH will not support proposals which switch resources for much
needed new social housing to pay for Social HomeBuy
discounts. 100
The National Housing Federation welcomed the Labour Government’s
commitment to affordable home ownership but said:
Mortgage subsidies are not a substitute for more investment in
new homes…the Government needs to tackle a range of housing
problems. With 100,000 families homeless and in temporary
accommodation and a government pledge to reduce that number
by 2010, it is vital that there is no substantial diversion of public
funds away from building affordable rented homes. 101
7.2 Equity loan schemes: additionality and

value for money?
A number of housing bodies welcomed the announcement of the
FirstBuy scheme by the Coalition Government, for example, Sarah
Webb, then Chief Executive of the CIH said:
Our housing market is still in intensive care but this measure to
give first time buyers access to a sizeable deposit as an interest
free loan is a welcome adrenaline boost. We are currently building
fewer than half of the homes we need and anything the
government can do to support new house building and support
construction sector jobs is welcome. 102
97
CLG, Facing the housing challenge: action today, innovation for tomorrow, July
2008
98
Ibid.
99
HM Treasury, Budget 2009, HC 407, 22 April 2009, para 5.75
100
CIH Press Release, 25 May 2005
101
‘Building on Brown’s cheap mortgages plan,’ Financial Times Money, 28 May 2005
102
CLG Press Release, 24 March 2011
Number 03668, 30 March 2021 36
Commentators noted that the scheme was closely modelled on Labour’s

HomeBuy Direct scheme but offered less generous support. 103 Notes of
caution were sounded over the desirability of encouraging first-time
buyers into a market at a time when some economists were predicting
substantial house price falls. 104 The scheme’s focus on new-build
properties was identified as a specific downside; these properties
suffered substantial reductions in value during the market downturn.
Critics argued that if house-builders could not sell their newly built
properties they should reduce prices, rather than having values
“propped up artificially” by the Government. 105 Some feared that the
scheme would enable lenders to offer mortgages to first-time buyers by
taking on significantly less risk – possibly making them less likely to lend
to those who did not qualify for FirstBuy.
FirstBuy was projected to assist some 27,000 purchasers but in its first
18 months (up to September 2012) it resulted in less than 7,000
transactions. 106
The extension of FirstBuy (Help to Buy: Equity Loan) to existing owners,
announced in the 2013 Budget, was welcomed as recognition of the
fact that affordability problems were not exclusive to first-time buyers.
Again, the CIH emphasised the importance of measures to increase
housing supply:
CIH believes that measures to increase the supply of mortgages
without parallel measures to increase the supply of new homes
will run the risk of driving house price inflation, further
exacerbating an affordability crisis in the housing market. CIH
recommends that government monitor the impact of these
measures carefully to make sure they are generating additional
housing supply and not just driving up house prices. 107
The National Audit Office (NAO) published a report on the design,
implementation and outcomes of the Help to Buy: Equity Loan scheme
in March 2014. 108 The NAO noted strong early demand for equity loans
under the scheme with 12,875 completions in the first nine months. 109
Successes in terms of improving access to mortgage finance were
recorded but evidence of whether the scheme represented value for
money was, according to the NAO, less clear. 110
The Chair of the Public Accounts Committee at that time, Margaret
Hodge, commented on the NAO’s findings:
I am shocked that the Department for Communities and Local
Government is investing up to £3.7 billion without a clear
understanding of how Help to Buy will impact the property
103
‘Another first step on the ladder’, Money Guardian, 26 March 2011
104
‘Who really benefits from FirstBuy?’, The Times, 26 March 2011
105
Ibid.
106
DCLG Live Table 1012: Affordable Housing Starts and Completions
107
CIH Budget Briefing 2013
108
NAO, The Help to Buy equity loan scheme, HC 1099, March 2014
109
By 2 January 2014 DCLG was reporting that 20,000 households had been assisted
with an equity loan.
110
NAO, The Help to Buy equity loan scheme, HC 1099, March 2014
market. The Department needs to get a handle on whether home

buyers would have made purchases, and developers built the
houses, anyway. It is simply unacceptable that there is not a
coherent plan to evaluate Help to Buy or to even understand its
impact on other housing initiatives.
Also, you have to ask why the Department thinks that providing
loans to people who are buying homes worth £600,000 is actually
benefitting those most in need. To provide value for money, the
Department and the Agency need to reduce and manage the risks
to taxpayers' money.
I look forward to discussing the matter with the Department
when it appears before us on Wednesday 2 April 2014. 111
The Public Accounts Committee’s report into Help to Buy: Equity Loans
(June 2014) found that DCLG had implemented the scheme effectively
but, contrary to HM Treasury guidance, had not carried out a full
assessment of the policy or alternative options prior to introduction.
Margaret Hodge also said that the Government had not demonstrated
the scheme’s value. 112
February 2016 saw the publication of independent research
commissioned by DCLG into the Help to Buy: Equity Loan scheme. The
researchers concluded that there was evidence of ‘additionality’ – i.e.
more new homes had been built because of the scheme:
The evidence assembled in this report suggests the Help to Buy
Equity Loan scheme, introduced in April 2013, has been an
important intervention in the housing and mortgage markets in
England. Whilst it is a policy that has attracted some criticism from
analysts, politicians and the media, the empirical evidence would
support the view that it has provided an important stimulus to
generate a not insignificant increased output in the housebuilding
sector as well as a stronger recovery in the mortgage market
along with higher confidence amongst all these players and
consumers.
Moreover, in terms of additionality, and the specific contribution
of the policy to housing output over and above what might have
happened anyway through the general upturn in the economy
and the housing market, we can evidence that it increased
demand and, through that, supply rose above what it would
otherwise have been. We estimate that since introduction it has
generated 43% additional new homes, over and above what
would have been built in the absence of the policy,
equivalent to contributing 14% to total new build output to
June 2015. 113
A second evaluation of the Help to Buy: Equity Loan scheme, published
in October 2018, examined the additionality of the scheme between
June 2015 and March 2017. It drew on a broader evidence base,
including a larger sample of buyers and a greater number of developers,
111
Statement by Chair of the Committee of Public Accounts, March 2014 (accessed on
8 April 2014)
112
Committee, of Public Accounts, Help to Buy equity loans: Second Report of Session
2014–15, HC 281, 18 June 2014
113
Ipsos MORI/London School of Economics, Evaluation of the Help to Buy Equity Loan
Scheme, February 2016
Number 03668, 30 March 2021 38
compared with the first evaluation. It concluded that, overall, the

scheme was viewed positively as having stimulated housing supply
along with developer and consumer confidence. The evaluation found:
• a small reduction in the previous demand additionality 114 estimate
from 43% to 41%. This fell to 37% when those who were not
dependent on Help to Buy to access the property market were
excluded from the analysis.
• the scheme had expanded the supply of new build homes

nationally by 16% (or 14.5% if those people who were not
dependent on Help to Buy to access the property market were
excluded). 115
• the scheme had enabled 79% of buyers to buy a property sooner

than they would otherwise have been able. 116
Morgan Stanley published “The help to buy premium – and its
unintended consequences” which attracted a good deal of media
attention in October 2017. 117 Morgan Stanley’s analysis of new-build
house prices before the introduction of Help to Buy equity loans in 2013
and ‘second hand’ houses, reportedly found that the premium paid for
new-build had undergone a significant increase. The Guardian
commented:
There has always been a small premium for new-build; people will
pay extra for spanking-new kitchens and bathrooms. But since
2013, that premium has rocketed. “The divergence between new-
build and second-hand prices is higher than it’s been since records
began,” says the report.
It says that the price of new-build has outstripped second-hand by
15% since the start of help to buy. “We are now around 5%
points away from the level at which new-build prices have
diverged by the full amount of the government’s equity loan
(20% of house price across England).” 118
Morgan Stanley reportedly concluded that the scheme had helped drive
supply but went on to say that the “figures provide ammunition for
critics who suggest it has pushed up prices, rather than making them
more affordable.”119
The Government’s announcement in autumn 2017 of an additional
£10 billion for the Help to Buy: Equity Loan scheme 120 received a luke-
warm reaction from the housing sector. Inside Housing magazine
114
Demand additionality is defined as the extent to which the scheme has drawn in
more buyers.
115
Supply additionality is defined as the extent to which developers have expanded
output because of Help to Buy.
116
MHCLG, Evaluation of the Help to Buy Equity Loan Scheme 2017, Christine
Whitehead, Peter Williams, Ipsos MORI and the London School of Economics, 29
October 2018
117
The report is not available online.
118
‘Help to Buy has mostly helped house builders boost profits’, The Guardian, 21
October 2017
119
Ibid.
120
HM Treasury, Autumn Budget 2017, HC587, 22 November 2017, para. 5.29
reported that the expansion of the scheme was regarded by some

commentators as a symbol of failed housing policy, whilst others
considered that the additional funding would be better directed at
housing policies to help people on low incomes. 121 The Adam Smith
Institute and the charity Shelter reportedly criticised the expansion of
the scheme which they considered would drive up house prices. 122
The NAO carried out a progress review of the Help to Buy: Equity Loan
scheme in 2019. The review concluded that the scheme had met its
short-term objectives (to increase home ownership and housing supply),
but its overall value for money will depend on the performance of the
property market over the longer-term. By March 2023, the total amount
loaned through the scheme is forecast to be around £29 billion in cash
terms. The Government expects to recoup its investment by 2031-32
and make a positive return overall. However, the NAO report
highlighted:
• the Government’s investment is exposed to significant market risk
as it is sensitive to house-price changes and the timing of buyers
repaying loans.
• at points when the market turns down, property owners could

face the trap of negative equity, exacerbated by the new-build
premium.
• there is an opportunity cost in tying up this money in the scheme

for a considerable period, rendering it unavailable for other
housing schemes or departmental priorities.
The Public Accounts Committee subsequently held an Inquiry into the
Help to Buy: Equity Loan scheme. The Committee’s report, published in
2019, questioned the value for money of extending the scheme beyond
2021:
Help to Buy was originally intended as a short-lived scheme but
will now last for 10 years and consume over 8 times its original
budget, yet the value achieved from its extension is uncertain.
Around three-fifths of buyers who took part in the scheme did
not need its support to buy a property, and the large sums of
money tied up could have been spent in different ways to address
a wider set of housing priorities and focus more on those most in
need. The early scheme achieved its own aims to support people
into home ownership, and boost the housing market. The scheme
does not address issues with the wider planning system, or other
problems in housing, such as the provision of affordable housing
to buy or to rent and rising levels of homelessness, nor was it
designed to do so.
The Department has other programmes to address these issues,
but Help to Buy remains its largest initiative by value. The
Department acknowledges that the scheme has, however, only
121
‘Scepticism for Help to Buy expansion’, Inside Housing magazine, 6 October 2017
[Subscription only]
122
‘Theresa May promises £10bn Help to Buy boost’, BBC News, 1 October 2017
Number 03668, 30 March 2021 40
benefitted one section of society—those that are in a position to

buy their own home in the first place.
Inherent uncertainty in the housing market means there are still
risks to the Department achieving a positive return on its
investment in homes. The new scheme from 2021 provides an
opportunity to target the money more effectively, but the
Department has not yet fully thought out how it will do this.
Unless the Department plans alternative housing initiatives, the
end of the scheme in 2023 may lead to a fall in supply, adding to
the challenge it already faces in achieving its ambition of 300,000
homes a year from the mid-2020s. 123
7.3 Contributing to house price inflation?

Policies which stimulate demand for housing are often said to push up
house prices. A report by the charity Shelter - How much help is Help to
Buy? (September 2015) explains the relationship:
House price inflation occurs when demand for homes in an area
outstrips the supply of homes for sale. When this happens buyers
increase their offers in order to outcompete one another. This
increase in demand can only be realised if buyers have the means
to increase their offer, such as extra savings, parental support or –
most commonly – taking out a bigger mortgage.
Mortgage guarantees
The announcement of the NewBuy Guarantee Scheme was met with
concerns around its potential to result in house price inflation. A
spokesperson for PricedOut, a pressure group for people who cannot
afford to get on the housing ladder, reportedly said the scheme:
...does not tackle the main problem, which is that relative to
incomes, house prices are too high. The fact that the government
has promised lenders that it will cover up to 5.5 per cent of each
loan if the borrower defaults – and each housebuilder must
guarantee the first 3.5 per cent of each loss – allows
housebuilders to raise their prices. 124
Some commentators dismissed the NewBuy Guarantee as a “gimmick”
that would assist developers more than prospective buyers. Mortgage
brokers pointed out that 95% mortgages were already available with
comparable interest rates to those on offer under the scheme. 125
NewBuy was projected to assist 100,000 purchases over three years but
only 1,522 had been achieved by 31 December 2012. 126 Increased take-
up was reported in early 2013. 127
The Help to Buy: Mortgage Guarantee scheme (Budget 2013) was
welcomed in general terms. The CIH’s Budget Briefing referred to
continued “mortgage rationing” as a key problem in the housing
123
House of Commons Committee of Public Accounts, Help to Buy: Equity loan
scheme: One Hundred and Fourteenth Report of Session 2017–19, HC 2046, 17
September 2019, p3
124
‘Fears over first-time buyer homes plan’, Financial Times, 13 March 2012
125
‘Home-buying scheme dismissed as gimmick’, The Telegraph, 12 March 2012
126
DCLG, NewBuy Guarantee Scheme Statistical Release, 26 February 2013
127
‘NewBuy tops 3,000 sales’, Inside Housing, 1 February 2013 [subscription required]
market and welcomed additional measures to support mortgage

lending. 128
The Treasury Select Committee took oral evidence on the 2013 Budget
from John Cridland, Director General of the CBI, and Paul Smee,
Director General of the Council of Mortgage Lenders on 25 March
2013. They were questioned on the possibility of the Help to Buy
Scheme leading to another ‘housing bubble:’
John Cridland: The CBI proposed similar measures to Help to Buy
in our representations for the Budget as a confidence-boosting
measure. I agree with Paul. We need to look at this in the context
of a growth strategy and what it is legitimate for the Government
to do in the short term that can have a positive effect on both
consumer and business—in particular, small builder—confidence. I
think it kick-starts confidence. I am disappointed in some of the
negative comments I have heard about the proposals, because
they are out for consultation and these matters can be addressed
in detail. But the principle that everybody gains—householders,
builders and the general business community—if we get more
houses built and sold quickly, is a given that has strong support
across the business sector.
Clearly, there are dangers in the long term of asset price bubbles,
but we are a long way from that. The problem at the moment is,
in my judgment, primarily on the consumer side a lack of
confidence and, secondly, an inability to get hold of mortgages in
ways that they can handle. On the builder side it is thin balance
sheets and the inability of more builders to build houses at this
time. The two schemes address both of those concerns. 129
Giving evidence the following day, Steve Nickell of the Office for Budget
Responsibility (OBR) cast doubt on these claims:
The key issue is, is it going to just drive up house prices?
By and large, in the short run, the answer to that is yes. But in the
medium term, will the increased house prices stimulate more
house building? Our general answer would probably be a bit, but
the historical evidence suggests probably not much. 130
The Committee’s report was published in April 2013 – it drew attention
to evidence comparing Help to Buy with schemes in the USA prior to
the financial crisis:
Dominic Lawson argued that whilst there was “certainly a
difference of scale [...] the thinking behind it is identical: to
encourage lenders to give mortgages to people they would
otherwise regard as having insufficient capital as security”. Patrick
Jenkins, banking editor of the Financial Times, has also compared
Help to Buy: mortgage guarantee with the US schemes. He said
that “it is as though the chancellor has learnt no lessons from the
financial crisis itself. After all, the whole blow-up stemmed from
years of excessive US subprime lending to people who could not
afford it, and was aided and abetted by the very existence of a
128
CIH Budget Briefing 2013
129
Uncorrected transcript of oral evidence to the Treasury Select Committee, 25 March
2013
130
Uncorrected transcript of oral evidence to the Treasury Select Committee, 26 March
2013
Number 03668, 30 March 2021 42
government-sponsored structure in Fannie and Freddie that gave

the banks excessive scope to expand business”. Mr Jenkins went
on to argue that Bill Clinton’s 1995 National Homeownership
Strategy now looked “like an eerie precursor of Mr Osborne’s
new plan.” 131
In May 2014, the Governor of the Bank of England, then Mark Carney,
said the Help to Buy: Mortgage Guarantee could distort the mortgage
market and might be encouraging a return to risky home loans. Mr
Carney also described the overheating property market as “the biggest
risk to financial instability.” 132 Similar comments were also made by
economists who had previously supported the Help to Buy: Mortgage
Guarantee scheme but who now said “with the economy growing and
unemployment falling rapidly, we believe that such stimulus is no longer
needed.” 133
Research by the charity Shelter - How much help is Help to Buy?
(September 2015) - estimated that the Help to Buy: Mortgage
Guarantee scheme had increased house prices by 1.4%, which equated
to a £3,750 increase in the average house price. 134
In September 2016 the Chancellor confirmed, in a letter to the
Governor of the Bank of England, that the Help to Buy: Mortgage
Guarantee scheme had achieved its aim of increasing the availability of
high loan-to-value mortgages and would therefore close as planned. 135
The scheme closed to new loans on 31 December 2016.
The Government’s announcement of a new 95% mortgage guarantee
scheme from April 2021, has again raised concerns of house price
inflation:
However, a big flaw in this policy is that it is not being
accompanied by a significant increase in housing supply. Despite
the government’s pledge in 2017 to build 300,000 houses a year,
it has consistently missed this target, with this past year having an
even lower rate of housebuilding than normal due to delays
resulting from the COVID-19 pandemic.
Therefore, in simple economic terms, the 95% mortgage policy is
likely to drive up demand for housing without increasing supply,
which will result in house prices rising. This house price inflation
will consequently benefit existing, mainly older homeowners who
will see increases to their housing wealth, while younger people
will be increasingly priced out of buying a home. 136
131
Treasury Select Committee Ninth Report of 2012-13, Budget 2013, HC 1063, para
146
132
“Help to Buy is a threat to recovery, Banks warns”, The Times, 19 May 2015
133
“Former backers of Help to Buy tell Osborne it’s time to pull back”, Financial Times,
11 May 2014
134
Shelter, How much help is Help to Buy?, September 2015, p7
135
HM Treasury, Correspondence - Help to Buy: mortgage guarantee scheme review
2016, 29 September 2016
136
‘New 95% mortgage policy will make homeownership even more unaffordable’,
Intergenerational Foundation blog, 5 March 2021
Help to Buy: Equity Loan

Concerns have similarly been raised that the Help to Buy: Equity Loan
scheme has inflated the price of new-build houses.
As previously noted (p38), Morgan Stanley’s 2017 report, The help to
buy premium – and its unintended consequences, 137 reportedly found
that the premium paid for new-build had undergone a significant
increase. 138 Shelter estimated that the Help to Buy: Equity Loan had
increased house prices by 1.6%, which equated to a £4,500 increase in
the average house price. 139
The independent evaluation of the Help to Buy: Equity Loan scheme up
to 2017 concluded that whilst there was no evidence of a significant
impact on house prices overall, the scheme’s effect on overall demand
had had some impact on new-build prices. 140
Analysis carried out by the National Audit Office for its Help to Buy:
Equity Loan progress review in 2019 found that buyers who used the
scheme had paid less than 1% more than they might have paid for a
similar new-build property bought without an equity loan:
Analysis by other commentators has found that buyers of Help to
Buy properties pay an additional premium, on top of the new-
build premium, quoting figures of between a 5% and 20%
premium. These figures originate from four different pieces of
research that compare the average price of properties bought
with the support of the scheme with those bought without. We
found that the research did not directly compare like-for-like
properties and therefore the differences found will in part reflect
differences in the average size or other characteristics of
properties bought with and without the scheme. For this report,
we compared prices paid by buyers of similar properties
(same type of property, similar size of property by square metre,
same postcode, and bought within the same month) and found
that the difference between buyers who bought with and without
the support of the scheme was less than 1%. 141
More recently, a Which? report, using data obtained through a Freedom
of Information request to Homes England, found that around one in
seven (14%) of those who had repaid their Help to Buy: Equity loans by
the end of June 2019 made a loss on their properties. This happened
despite house prices in their local areas rising significantly. The report
presents evidence that developers have charged a ‘Help to Buy
premium’:
Between April 2013 and the end of 2019, the average price paid
by first-time buyers in England for any type of home increased by
137
The report is not available online.
138
See ‘Help to Buy has mostly helped house builders boost profits’, The Guardian, 21
October 2017
139
Shelter, How much help is Help to Buy?, September 2015, p7
140
October 2018, p12
141
Para 2.17
Number 03668, 30 March 2021 44
39%. The average amount paid by all buyers of new-build

properties also increased by 39%.
But the amount paid by first-time buyers using Help to Buy
jumped by a much heftier 51%.
It’s widely accepted that new-build homes cost more than existing
properties. After all, they’re brand new, have warranties, and
offer the novelty of no one else having lived there.
But even taking this into account, the double-digit price increases
seen on Help to Buy homes sold in 2016 and 2017 seems
excessive when compared with the overall market. 142
7.4 Well targeted?

Questions have been raised in the past about how well targeted low-
cost home ownership assistance has been. 143 A report by the UK
Collaborative Centre for Housing Evidence (2020) on home ownership
schemes concluded “many of the initiatives have been in response to
short term political and/or economic pressures and have been ill-defined
and poorly targeted.” 144
The targeting of the Help to Buy: Equity Loan scheme has attracted
particular attention due to the level of Government investment in it
(expected to be around £29 billion by 2023). Compared to earlier
schemes, the Help to Buy: Equity Loan scheme (2013 – 2021) was
designed with broad eligibility criteria to enable as many households as
possible to benefit and to simplify the scheme administration. The
scheme was not means-tested, was open to both first-time buyers and
those who had owned a property previously, and could be used to
purchase properties valued up to £600,000.
A MHCLG evaluation of the Help to Buy: Equity Loan scheme (2018)
found:
• 19% of all buyers that used the scheme had previously owned a
property.
• 10% of buyers had household incomes over £80,000 (the
maximum threshold for eligibility for the Help to Buy: Shared
Ownership scheme outside of London).
• 31% of buyers could have purchased a property they wanted
without the scheme. 145
The NAO progress review of the Help to Buy: Equity Loan scheme in
2019 identified that some people who did not need financial help to
buy a property had benefitted from the scheme.
142
‘Exclusive: one in seven Help to Buy homes lose value despite local house prices
soaring’, Which? news, 5 June 2020
143
Committee of Public Accounts, A Foot on the Ladder: Low Cost Home Ownership
Assistance, Nineteenth Report of 2006-07, HC134, March 2007
144
UK Collaborative Centre for Housing Evidence, Thinking outside the box – Exploring
innovations in affordable home ownership, 11 November 2020, Christine Whitehead
and Peter Williams London School of Economics, para 6.4
145
October 2018
The new Help to Buy: Equity Loan scheme from 2021 is more tightly
targeted at first-time buyers and incorporates new regional property
price caps. These changes are intended to better focus the scheme on
those who most need financial help.
7.5 Reconciling aspirations and sustainability

A further concern of housing organisations is that measures to increase
home ownership amongst ‘marginal’ owners on lower salaries and in
relatively unstable employment should be accompanied by measures to
improve financial protection for these owners. 146 Unemployed home
owners are not entitled to Housing Benefit/housing element Universal
Credit to cover their mortgage repayments and may only become
entitled to assistance with interest payments (via a loan scheme) after a
certain period of unemployment. 147 A Royal London study in 2018
found that 71% of people with a mortgage had no payment protection
in place should they become diagnosed with a critical illness, while 81%
had no income protection in place. 148
Home owners are not universally wealthy; a study published by the
Joseph Rowntree Foundation in 2003 found that half of all people living
in poverty in Britain were homeowners. 149 Sustainable home ownership
requires owners to be able to afford the cost of living in their homes not
just the cost of buying them. The ongoing affordability of home
ownership can be a particular issue for shared owners (discussed further
below).
Dr Ian Shepherdson, a leading economist and commentator on the US
economy, identified unrealistic expectations for home ownership as one
of the causes of instability in the housing market in the USA and a
major contributor to the economic downturn. Speaking at the
Chartered Institute of Housing’s 2008 annual conference,
Dr Shepherdson pointed to the USA’s sustained low levels of interest
rates, especially between 2002 and 2005, and indiscriminate lending, as
the major causes of pushing millions of American citizens from rented
accommodation into home ownership – an option previously
unobtainable and, in Dr Shepherdson’s view “ultimately an
inappropriate option for the vast majority.” Dr Shepherdson highlighted
that for over 30 years US home ownership levels had remained relatively
static at around 64 per cent. By 2005 this had grown sharply to nearly
70 per cent – a growth fuelled by sub-prime lending.
The CIH’s then-Chief Executive, Sarah Webb, spoke of the UK’s
“obsession” with home ownership:
Whilst it is important that we help people to fulfil their aspiration
for home ownership, the evidence clearly shows us that the state,
146
This applies particularly to those who may qualify under the Social HomeBuy
Scheme. See Promoting home ownership at the margins, Kim McKee, 2010
147
See: GOV.UK - Support for Mortgage Interest
148
‘Eight out of 10 mortgage holders have no income protection’, FT Adviser, 25 May
2018
149
Home ownership and Poverty in Britain, JRF Findings January 2003 Ref: 113
Number 03668, 30 March 2021 46
lenders and individuals must take a responsible stance and make

sure they take the right housing choice for them.
We need to support people to make the best – not the worst
choice. If you are one of the 45,000 people that get their first
home repossessed this year then owner occupation won’t have
proved to be the route to personal wealth. 150
How affordable is shared ownership?

Despite the growing popularity of shared ownership, it is still far from a
mainstream tenure – shared owners account for around 1% of all
homeowners. Some commentators have questioned whether shared
ownership represents an affordable route to homeownership.
On average, buyers purchased a 40% share of equity in their home in
2018/19. This proportion has been constant since 2010/11, but the
rising market value of shared ownership homes means that the average
value of the equity stake purchased has increased. The median equity
stake was £100,000 in 2018/19, up from £63,000 in 2010/11.
This, in turn, led to an increase in the size of cash deposits and of
mortgages taken out. The median cash deposit has risen from £9,700 in
2010/11 to £12,800 in 2018/19. The median mortgage value has risen
from £51,600 to £81,900. 151
Research by the Council of Mortgage Lenders in 2016 put the average
income of first-time buyers making a shared ownership purchase at
£45,000 in London and £24-34,000 in the rest of the country. They
estimated that 36% of buyers were dual-income households. 152
Increasing house prices (relative to wages) have made it more
challenging for shared owners to buy additional shares and staircase to
full ownership. Around 4,000 households staircased to 100%
ownership in 2018/19, equivalent to 2.3% of all shared-equity homes
owned by housing associations. 153 A YouGov survey of 200 shared
owners in 2018 found that only 10% had increased their equity stake,
with 63% of respondents identifying affordability as the main barrier. 154
There are also concerns about the ongoing costs of shared ownership.
Despite only owning a share of the property, shared owners are
currently liable for 100% of the costs associated with the property.
These might include monthly service charges for maintenance of
communal areas, an annual ground rent and one-off maintenance and
repair costs for more significant works.
150
CIH Press Release, “Home ownership drive unrealistic”, June 2008
151
MHCLG, Live Table 697, 19 December 2019
152
Council of Mortgage Lenders, Shared ownership: ugly sister or Cinderella?, October
2016
153
Commons Library briefing paper CBP08828: Shared ownership (England): the fourth
tenure?, November 2020, Section 4.2
154
‘New report suggests shared ownership is the poor relation of Help to Buy’, Aster
Group, 19 September 2018

(England): the fourth tenure? examines the key barriers to extending
shared ownership and the Government’s plans to address them.
Starter/First Homes
The Starter Homes provisions in the Housing and Planning Act 2016
were subject to much debate and challenge as the legislation
progressed through Parliament. Issues raised included:
• the importance of supplying a mix of housing tenures to provide
for people on lower incomes;
• the need for flexibility to reflect housing needs in different areas;
• the potential reduction in the delivery of other types of affordable
housing;
• the extent to which starter homes would be genuinely affordable;
and
• the impact of starter homes on local housing markets.
In January 2020 the Government announced that the Starter Homes
policy was no longer being pursued. February 2020 saw the launch of a
new initiative, First Homes, which also aims to deliver discounted homes
for local first-time buyers (see section 2.9 above).
The House of Commons Public Accounts Committee was highly critical
of the “the time and resources wasted by the Department [the Ministry
of Housing, Communities and Local Government] as it let the Starter
Homes policy drift out of existence”. 155
The Committee also raised concerns about funding First Homes through
developer contributions and urged the Government to model the
impact this would have on local authorities’ ability to fund local
infrastructure and meet other housing needs, such as via social
housing. 156 Local authorities and housing associations have similarly
expressed concern that First Homes will reduce the supply of new social
and affordable rented homes. 157
The Government is currently finalising the details of the First Homes
scheme and intends to carry out a 1,500 homes pilot.
The Right to Buy
While Governments since 2010 have supported action to reinvigorate
the Right to Buy (RTB) in England, the Scottish and Welsh Governments
have abolished it. The Northern Ireland equivalent of the Right to Buy
will be abolished for housing association tenants in August 2022 158 and
155
House of Commons Public Accounts Committee, MHCLG should ditch the false
promises instead of serially ditched housing policies, 9 December 2020
156
House of Commons Public Accounts Committee, Starter Homes: Thirty-First Report
of Session 2019–21, HC 88, 9 December 2020, Conclusions and recommendations
157
‘One in four affordable housing units from developer contributions to be First
Homes’, Inside Housing, 6 August 2020 [subscription required]
158
In Northern Ireland both council and housing association tenants are eligible for the
House Sales Scheme.
Number 03668, 30 March 2021 48
the NI Executive intends to consult on ending the Right to Buy scheme

for council tenants. 159
The single most contentious aspect of the RTB in England has been the
failure to replace the social housing stock that has been sold.
The Government’s proposals to extend the RTB to housing association
tenants have been welcomed by tenants. However, the overwhelming
concern amongst social housing providers is that the measure will result
in further depletion of the social housing stock due to challenges
around plans for one-to-one replacement.
The Commons Library briefing paper CBP07224, A voluntary Right to
Buy for housing association tenants in England provides detailed
information and commentary on the existing Right to Buy and its
proposed extension to housing association tenants in England.
159
NI Communities Department, The Right to a Home, 20 November 2020
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with the impartial briefing and evidence base they need to do their work in
scrutinising Government, proposing legislation, and supporting constituents.
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BRIEFING PAPER

Number 03668, 30 March 2021

Extending home By Wendy Wilson

ownership: Government Hannah Cromarty

www.parliament.uk/commons-library | intranet.parliament.uk/commons-library | papers@parliament.uk | @commonslibrary

Contributing authors Antony Seely, Stamp duty land tax, Section 4

Cover page image copyright: Richard Cracknell

1. First-time buyers and

Young people are less likely to be homeowners

First-time buyer numbers have increased since the

Source: UK Finance, Industry Data Table RL1A

The affordability of house prices is a key factor influencing the number

The house price to earnings ratio has grown

Source: ONS, House price to residence-based earnings ratio dataset, 19 March

1.1 Affordability before the credit crunch

1.2 The credit crunch and beyond

a mortgage, affordability improved in 2011. This assessment was based

narrow in the downturn. Updating his analysis shows that the

2. Low-cost home ownership

• 135,000 Help to Buy: Shared Ownership homes, which will

2.1 Equity loan schemes

• Most of the home purchases were made by first-time buyers,

2.2 Shared ownership

In addition to the standard shared ownership product, Homes England

The Commons Library briefing paper CBP08828, Shared ownership

2.3 Rent to Buy

2.4 NewBuy Guarantee

2.5 Mortgage guarantee schemes

• 104,763 mortgages were completed with the support of the

• Of these, 80% were purchases by first-time buyers.

• The total value of mortgages supported by the scheme was £15.8

• Compared to total mortgage completions in each region, the

• The mean value of a property purchased or remortgaged through

between 91 and 95%. This is intended to encourage banks and building

2.6 Help to Buy: ISA (closed to new accounts)

As at 30 September 2020, 359,250 property completions had been

2.7 The lifetime ISA

2.8 Starter Homes

Spending Review and Autumn Statement subsequently provided

2.9 First Homes

the home, the discount will be passed on to the new owner

2.10 Discounted Sales

2.11 Failed housing transactions

The Government’s consultation response, published on 8 April 2018,

3. Purchase schemes for social

3.2 An extended Right to Buy

Midlands with £200 million of Government funding. The pilot was

3.3 Cash incentive schemes

3.4 Social HomeBuy

(generally between £9,000 and £16,000 - depending upon the local

3.5 A Right to Shared Ownership

4. Stamp duty land tax

• In the 2015 Autumn Statement Mr Osborne announced that from

• In the 2017 Autumn Budget then-Chancellor Philip Hammond

• The average amount relieved per transaction was £2,400.

6. Wales, Scotland and Northern

7. Comment on the impact of

• around 24,000 households were helped into low-cost

7.2 Equity loan schemes: additionality and

Commentators noted that the scheme was closely modelled on Labour’s

market. The Department needs to get a handle on whether home

compared with the first evaluation. It concluded that, overall, the

• the scheme had expanded the supply of new build homes