The original Help to Buy scheme was bolstered at the beginning of 2014 by the initiation of the Help to Buy Mortgage Guarantee scheme, sometimes known as Help to Buy 2 (HtB2), but this little brother has not performed anywhere near as well as George Osborne wanted his pet scheme to.
In an attempt to bolster the number of house sales, the Help to Buy Mortgage Guarantee helps lenders to offer mortgages with lower deposits by promising to pick up the bill if borrowers default on their mortgage.
The scheme was supposed to see the scheme help 118,000 first time buyers become homeowners, which in turn was supposed to bring prices down in the housing market.
However, only 47,000 home sales have been involved in HtB2.
The Shadow Housing minister, Emma Reynolds, said: “At a time when many people are struggling to get on the housing ladder this is disappointing news.
“David Cameron needs to take action to tackle the growing housing crisis by getting the homes we need built.”
64 borrowers on the scheme are reportedly in arrears with their mortgage payments, while a further six have defaulted completely.
With so much controversy surrounding the schemes, with people arguing that it is inflating the prices of homes for everyone or that non-first time buyers are using it to get discounts on overly expensive homes, one thing that seems certain is that the rate of house building hasn’t been boosted to the point where ‘generation rent’ have been able to buy their own home.
Mark Littlewood of the Institute of Economic Affairs added: “What we need is planning liberalisation to allow more building and reduce housing costs for ordinary people.”