Help to Buy is draining interest from conflicting government schemes and causing less property builders to build properties for renting.
Build to Rent was a £1 billion fund set up in 2012 to promote property building for the purpose of renting. However, property builders are now backing out of that scheme in favour of building houses they can sell at a capital cost, rather than an ongoing rate.
26 companies have so far been said to have abandoned the scheme, according to Construction News, an announcement following the advent of the Help to Buy extension. The companies that have dropped out include some of the biggest UK builders, such as Persimmon Homes and Taylor Wimpey.
This is bad for the Build to Rent managers, the Home and Communities Agency, who have a goal of ensuring the build of 10,000 homes by 2015, through offering loans to developers.
When George Osborne extended the Help to Buy fund to 2020, “more liquidity entered the market”, according to the chief executive of Keepmoat, Dave Sheridan, and drew interest away from the Build to Rent scheme.
Another developer said that “most listed house builders and developers build for sale because that is their business model.”
Overall, this could land some people who cannot afford to buy through the Help to Buy scheme, or simply don’t qualify for it, to not be able to get their foot on the property ladder as less rented accommodation is available for them on the market.