The economics of help to buy

The mortgage adviser, John Charcol, has been contributing to our series on housing and help to buy in the UK. The scheme, brought in by the government in April 2013, has been seen as highly successful for house-builders and creating more homes.

However questions remain as to whether the 20% to 40% equity loans are reaching enough people who want to step onto the housing ladder for the first time. Up to end of 2017 a total of just under 159,000 properties had been bought under the scheme, with 81% of this total made up of first time buyers (Ministry of Housing figures), with a total property value of £39 billion.

In our new series of filmed panel discussions on innovation in mortgage lending and the housing market, Ray Boulger, Senior Technical Adviser at John Charcol, gave us his view on where 'Help to Buy' needed to go next. While Ray thought the scheme had been successful he felt that it had mainly allowed people who could already afford a basic house to miss out a property life stage and move into a larger property straight away.

'The scheme had had some "unintended consequences" but should be kept going beyond 2021, but with lower government outgoing as the mortgage market had improved', says Ray. Please watch him speak in the video above.