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Help to buy is coming to an end, 5 months earlier than originally planned. The government faces criticism for the decision, given that the cost of living is already pushing home ownership out of the hands of so many people. Landlords, meanwhile, may find tenants stay for longer, as this goal post has changed.
First time buyers will need to act fast if they want the opportunity to use the government’s Help to Buy scheme. As the deadline has been brought forward, all applications will need to be in by 6pm on the 31st October 2022, where the former deadline ran through until March 2023.
The news of the foreshortening of the scheme is likely to put pressure on first time buyers hoping to make use of it, as many will now have to rush, to find a place to call home.
Many people may be in the situation where they are falling just short of their deposit and needed those extra few months of saving.
Criticism from within the Conservatives
Sir Iain Duncan Smith, former leader of the Conservatives has shared his criticism of the decision, saying:
“Government has trumpeted its successful outcomes and now turns a blind eye over an early closure. [It’s] hardly the action of a government wanting to bring home ownership to all.”
Another voice from within the Conservative party, and the property industry, Kevin Hollinrake, said:
“If they are ending something early that was supposed to run until March – that is clearly wrong. This stuff should be done in a coordinated fashion, not in a piecemeal way. It should be done in accordance with government policy and government timelines.”
Hollinrake is the co-founder or Hunters Estate Agent and MP for Thirsk and Malton. Whilst not a supporter of the Help to Buy scheme, due to its focus on new build homes, he felt the decision to end the Help to Buy scheme early was “extraordinary”.
Homes England, the quango who issued the news of the ending of the scheme to the industry, is reported to have asked house-builders not to make the news public, so that the organisation could handle the communication itself.
What does this mean for landlords?
There has long been huge pressure on the housing industry, with one of the biggest issues being supply versus demand.
Whilst some landlords are feeling pressure to leave the private rental sector, this latest move by the government is likely only add to the demand for rental accommodation.
We reported just last week that the spike in the cost of living was proving to be an overwhelming barrier to prospective first time buyers getting on to the property ladder. This early end to the Help to Buy Scheme will surely only exacerbate that.
Where landlords may have previously been vying for property with first time buyers, this cohort is now likely to be even further subdued.
Will this encourage landlord investors back into the PRS, where a greater volume of homes is clearly so desperately needed?