What is the Help to Buy Scheme?
Many people have a dream of their own house, and many are trying to upgrade their homes. But it is a task easier said than implemented; it is not so simple to buy a house or upgrade it in the current monetized world. In such situations, the Help to Buy Scheme introduced by the government is helping many families to buy their own house or to upgrade the existing ones.
Now it is easy to climb the housing ladder with the help of this scheme; it doesn’t matter you start with bottom or middle order. The Help to Buy Scheme was introduced by the government on April 1, 2013, and is available until 2020. It is available for both first-time buyers and home movers, but it is strictly restricted to new homes only. The buyer only has to raise to 5% of the cost of the house for once, and the rest amount is loaned up. There is no interest charged for the first five years, from the sixth year, a 1.75% interest rate will be charged which will be increased 1% every year from that point. It is a boon for people who want to fulfil their home dreams. Till now, over 92,000+ families are benefited with income above £50,000 a year from this scheme and still counting. In this, around 9,000 families have income above £100,000. Almost one-fifth of the total families was not the first time buyers among the stats mentioned above.
Things went wrong
But it is exploited by people as they found a few loopholes in this scheme, people are investing in this scheme to save themselves from paying taxes, according to critics, a total of £11.7 billion of taxpayer’s money is lent into this scheme, which the exploitation of the scheme. Persimmon became the first British house builder to make a profit of £1 billion by cashing into this scheme. To restrict any further misuse of this scheme, from 2021 this scheme will be availed to first-time buyers only.
Three of Britain’s biggest builders- Barrat, Taylor Wimpey, and Persimmon raked in more than £2.7 billion in profit until last year by exploiting this scheme. And as a result, there is a heavy upsurge in housing prices. To restrict malpractices, regulating the prices and avoiding any further problems, the government has decided to avail this scheme to first-time buyers only from the year 2021.
Sometimes a thing which is considered as a boon becomes bane due to malpractices and misuse by a powerful part of society. Which eventually leads to the downfall of the whole purpose behind. The same thing happened to Britain’s Help to Buy Scheme; builder’s misused this scheme and made out huge profits from this scheme. Eventually making the government restrict it to first-time buyers only.