Thousands of households earning more than £100,000 a year are benefitting from the government’s Help to Buy scheme to get on the property ladder, leading to calls for the programme to be reformed
The Help to Buy scheme was first introduced in March 2013 as a way of helping first-time buyers get onto the property ladder. However, figures show that 6,717 households with an income of more than £100,000 have used it. This accounts for 4% of the 169,102 houses that have been sold under the scheme.
A further 10,299 households with an income of £80,000 or more have also bought a property through the programme. In total more than a third of households using Help to Buy earn over £50,000.
The Institute for Public Policy Research believes the figures highlight that the scheme should be reformed. Darren Baxter, research fellow at the think tank, said: “Help to Buy is not supporting the right people. Far from helping those priced out of home ownership, the majority of those who have bought through the scheme would be able to buy at some point without support.
“The government needs to urgently consider reforming the scheme to better focus on those in need, or should phase it out altogether”.
The report from the Ministry of Housing, Communities and Local Government identified that the median average income of a household using Help to Buy in three months to the end of March this year was £50,379.
This is a considerable rise from when the scheme was first introduced, when average income was £37,000, suggesting that a rising number of better-off buyers are using the scheme. For those in London, incomes have risen from £47,250 to £62,000 over the same period.
The figures fail to make it clear as to whether this is the income of a single buyer or a joint application, meaning the average income of individual Help to Buy users may be lower.
The government promised another £10bn of funding for Help to Buy last year, taking the total to £22.1bn and suggesting that the programme will run longer than its proposed closing date of March 2021.
Those supporting the Help to Buy scheme argue that it has helped encourage developers to build more houses.
The average price of a home bought under the scheme was £225,000, similar to the average price of a home at £224,000, while for London it was £400,000.