Chancellor Rachel Reeves has indicated that the Government will not revive the Help to Buy scheme, citing defence spending as the priority over property market incentives.
Speaking at a conference organised by investment bank Peel Hunt, Reeves stated that increased defence spending would preclude new commitments in other areas. “If defence is the number one priority, and we live in a dangerous world, that means you can’t make commitments everywhere, because then you end up in the position that previous Governments have ended up in, where you over-commit, and then you under-deliver, and you end up with high interest rates,” she said, according to the Daily Telegraph.
Fiscal constraints
The Chancellor suggested that tax rises were more likely than costly new schemes for first-time buyers. Government departments have been instructed to identify cuts to fund an additional £15 billion for defence over the next four years, amid Cabinet disagreements about spending priorities.
The statement comes as MPs have called for stamp duty reforms to boost homeownership, highlighting ongoing concerns about housing affordability.
Market implications
Earlier this year, reports indicated that a sharp slowdown in new-build sales had prompted the Government to consider introducing a successor to Help to Buy. The Ministry of Housing was said to be assessing how earlier rounds of the scheme affected supply, prices and buyer access.
Help to Buy operated from 2013 to 2022, allowing buyers to purchase new-build homes with a 5% deposit alongside a Government-backed loan. The scheme’s closure has left a gap in support for first-time buyers entering the market.
Recent data from Savills revealed that more than half of all first-time buyers now require financial assistance from family members to access the property ladder, underlining the challenges facing new entrants to the market.
Regional variations
Last month, the Scottish Government announced that first-time buyers would be eligible for interest-free loans worth £10,000 under a new shared-equity scheme, indicating divergent approaches to housing policy across the UK.
The decision not to revive Help to Buy is likely to impact the new-build sector and may place additional pressure on alternative financing options for first-time buyers in England. Industry professionals will be monitoring whether proposed changes to stamp duty materialise as an alternative policy response to housing affordability challenges.
