The government’s Help to Buy equity loan scheme will be reviewed by ministers owing to fears it is helping people who are already wealthy, The Sunday Telegraph reported.
The scheme, which expires in 2021, could be replaced by something more specifically targeted at first-time buyers.
One in five users of the scheme have used it to ‘upsize’ to larger homes, rather than get on the property ladder.
James Chidgey, new homes relationship manager at the Mortgage Advice Bureau, said: “It would be no great surprise given the increasing pressure on government funds if there were revisions to the scheme, perhaps targeting it at first-time buyers only and/or capping the current purchase price limit well below £600,000 [the current limit].
“Housebuilders can adjust their strategies and as long as the maximum price isn’t lower than £400,000 they can live with that.”
He added: “The key thing for the housebuilders is to get an extension to 2023 to plan their new build strategies.
“What’s making it more pressing is in reality there are only two years remaining on the scheme, as the March 2021 date is for completions of the purchase, so house sales will need to be well underway in September 2020.”
Chidgey said extending support for new build until 2023 would make most sense for all, given the “Brexit cloud hanging over this country” and a potential change in government at the next general election in 2022.
He speculated that a decision on Help to Buy would either be made public at the Conservative Party Conference on 30 September or the Autumn Budget in November.
The government has so far provided £8.9bn of funding for the scheme, with an additional £10bn being pledged.
Stuart Bryce, group sales director at BuildLoan, is hopeful the government will use this funding to create new supply rather than focusing on stoking consumer demand.
He said: “The best thing the government could do is to apply the Help to Buy fund to self and custom build, which will boost supply rather than demand.”