Revealed: Thousands of wealthy families are borrowing money taxpayers’ money to help them buy new homes
- 20,512 households earning more than £80,000 get Help to Buy loans
- This figure includes 8,078 with incomes in excess of £100,000 a year
- Government scheme was set up to help struggling first time buyers
- But there are concerns it is being exploited by the relatively well-off
Thousands of wealthy families are borrowing money from the taxpayer to help them buy new homes.
Some 20,512 households earning more than £80,000 have been handed loans through Help to Buy, according to analysis of official figures.
This includes 8,078 with incomes in excess of £100,000 a year.
Help to Buy offers loans to buyers of new-build homes costing up to £600,000. A development in Essex is pictured
The revelations will fuel concerns that the government scheme – which was set up to help struggling first time buyers – is being exploited by the relatively well-off.
Critics argue many families have been locked out of the housing market because Help to Buy has pushed up prices.
And they claim taxpayers’ money is boosting profits and pay at Britain’s biggest builders.
Persimmon this week posted record profits of £1.1billion, while rival Taylor Wimpey banked £856.8million.
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The bumper results came despite the industry facing a backlash over fat cat pay, shoddy workmanship, poor quality housing, and the sale of new homes with rip-off leases.
Former Persimmon chief executive Jeff Fairburn, who was ousted following a row over his £75million bonus, was this week replaced by Dave Jenkinson, one of his key lieutenants, who was paid £40million in the same bonus scheme.
Labour MP John Mann, a member of the Treasury Select Committee, said Mr Jenkinson’s promotion ‘suggests Persimmon has learnt nothing from the outcry over Jeff Fairburn’s pay’.
And turning his fire on Help to Buy, he said the scheme is ‘not supporting the people it was intended for’.
Persimmon posted record profits of £1.1billion, while rival Taylor Wimpey banked £856.8million
Help to Buy offers loans to buyers of new-build homes costing up to £600,000.
The buyers must raise a deposit of 5 per cent – or £30,000 on a £600,000 home – while the Government provides a loan of 20 per cent or up to £120,000.
In London, where houses are typically more expensive, the Government stumps up as much as 40 per cent of the value of the house, or £240,000.
Figures from the Ministry of Housing, Communities and Local Government (MHCLG) show 195,219 households have used the programme since its launch. They have borrowed a total of £10.7billion from the taxpayer.
But around one in ten families handed public money earn over £80,000 a year.
The report also shows that around a fifth of borrowers – or 37,206 – were already on the property ladder and were not first-time buyers.
Mr Mann said: ‘Help to Buy is clearly not supporting the people it was intended for. Taxpayer money should not be going to families with six-figure incomes.
‘It’s outrageous and just drives up prices, making it harder for ordinary people to get on the ladder.’
Housing Minister Kit Malthouse said the scheme was ‘helping to make the dream of home ownership a reality for a new generation’
Paula Higgins, chief executive of the Homeowners Alliance, said: ‘Help to Buy is pushing up house prices and is being used by people who don’t really need it.
‘We shouldn’t be giving taxpayers’ money to families earning six figure salaries when so many are struggling to afford a decent home.’
Reuben Young, director of campaign group Priced Out, said: ‘Help to Buy has been disastrous for housing affordability from the start.
‘It helps a lucky few – many of whom either already own a home or would have bought one soon anyway – while pushing house prices even further out of reach for average people.’
The government has extended the scheme beyond 2021 to 2023 but only for first-time buyers purchasing newly built homes. It is also introducing regional price caps.
The MHCLG pointed out that the majority of households using Help to Buy – 111,347 or 57 per cent – had a total income of less than £50,000.
Housing Minister Kit Malthouse said the scheme was ‘helping to make the dream of home ownership a reality for a new generation’.
A spokesman for the Home Builders Federation said: ‘Help to Buy has transformed the lives of thousands of people by enabling them to get onto the housing ladder.
‘The scheme is delivering as intended by helping first time buyers, driving unprecedented increases in house building, creating jobs and boosting the economy.’
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