“Help-to-buy” should really be called “help-to-sell”.

"The help to buy schemes enable a first-time buyer to borrow 20% of the cost of the new built house from the government on top of their mortgage and thus increasing the “affordability” of the house.

It is important to point out that this is a gross distortion of the market, as essentially the state is paying 20% of the purchase price and enabling the developer to maintain his level of profitability, rather than the developer reducing his prices to meet the price level the market will bear. Help to Buy drives up prices at our expense and contributes massively to house builder’s profits.

It is also the case that the current “stamp duty holiday” has the same adverse effect. In 2017, a report by Morgan Stanley damned the help-to-buy scheme as being economic madness, saying that “……help to buy (and broader house inflation, among other things) have helped housebuilder earning triple since its launch.”

The builders will say that the scheme has, indeed, provoked some supply, but evidence is thin. Morgan Stanley says: “though it has helped drive supply, figures provide ammunition for critics who suggest it has pushed up prices rather than made them more affordable.”"

Brian Pain writing in FavershamEye

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