The row over whether Help To Buy benefits house builders’ personal wealth more than it assists the housing market is continuing apace thanks to a raft of new figures.
The government has issued figures revealing that since the launch of the Help to Buy Equity Loan scheme in April 2013 until the end of September last year, some 195,219 properties were bought with equity loans totalling £10.66 billion.
The value of the properties sold under the scheme totalled £49.89 billion.
Eighty one per cent of the purchases were made by first time buyers, accounting for 158,013 homes.
In London, the maximum equity loan was increased from 20 to 40 per cent from February 2016, and since then to 30 September 2018 there were 10,829 completions in the capital.
Minister of State for Housing, Kit Malthouse MP, says: "This government is committed to helping more people get on the housing ladder as we power through to delivering 300,000 homes a year by the mid-2020s. Our Help to Buy: Equity Loan scheme has supported more than 190,000 households in purchasing their home, helping to make the dream of home ownership a reality for a new generation."
But of greater interest to many were the figures for the bonus payments made to bosses at Persimmon, the house builder.
Its latest report to shareholders shows that the company’s interim chief executive, Dave Jenkinson, has not only been appointed to the role permanently but has collected a bonus of £40.5m from a long-term incentive plan widely seen as being boosted by Help To Buy.
This is the same plan that led to Jenkinson’s predecessor, Jeff Fairburn, being offered a bonus of no less than £110m - a sum eventually reduced to ‘only’ £75m.
Persimmon made a profit of over £1 billion in 2018; almost half of its homes are sold via Help To Buy, prompting widespread speculation as to the real beneficiaries of the scheme.
A government spokesman told The Guardian newspaper that officials would “carefully” examine the vast profits made by Persimmon and other housebuilders as part of the review of Help To Buy.
“[It] will look different,” the spokesman said. “We’ve already said it will look only at first-time buyers and we will definitely not be funding leasehold properties. We will look carefully at developer performance over recent years.”
“Not only has Help to Buy given builders the clarity they needed to deliver and plan more homes, but it is consistently supporting those borrowers who need it most.
However there have been some industry figures supporting Help To Buy.
Kevin Roberts, director of Legal & General’s Mortgage Club, says: “Not only has Help to Buy given builders the clarity they needed to deliver and plan more homes, but it is consistently supporting those borrowers who need it most.
“The extension of the scheme until 2023 will no doubt be music to first-time buyers’ ears, however, the industry needs to start planning for after this date to ensure there is an easy transition. We’re already seeing increased innovation from lenders in this sector.”