Another day. Another scandal in which housing associations are involved. This time it is Help to Buy
The National Audit Office has criticised the governments ‘Help to Buy’ initiative.
The Independent newspaper says (1): ‘The government’s Help to Buy scheme has handed billions of pounds of subsidised loans to relatively wealthy homeowners who would have been able to buy a property without help, the public spending watchdog has found.’
It goes on to say:
“Only 37 per cent of people who have so far benefited from Help to Buy would not have been able to afford a property without it…. There is “widespread criticism that Help to Buy has pumped up property prices.”
All the normal suspects are there from the commercial sector including the famous boss of Persimmons: “the largest beneficiary of Help to Buy, [who] resigned last year after outrage over his £75m bonus, which had been boosted by sales subsidised with public money.”
And the housing associations involved in this Government programme which appear to be actually increasing housing prices?
Catalyst: “With a Help to Buy: Equity Loan the Government lends you up to 40% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 55% mortgage to make up the rest.” (2)
L and Q: “Help To Buy also means that you won’t have to take out an expensive 95% mortgage. You won’t need to pay interest on the government’s equity loan for the first five years.”(3)
NHG: “You can use Help to Buy: Equity Loan to move home and get your foot on the property ladder.” (4)
Peabody: “Currently London Help to Buy equity loans are available to first time buyers looking to purchase a new build home with a purchase price up to £600,000.” (5)
Network: “Many Network Homes properties are also available to purchase using the Help to Buy scheme.” (6)
Metropolitan: “Help to Buy enables you to buy a new home directly from a housing developer.” (7)
Nice to know these housing associations continue to say they remain true to their ‘social purpose.’ But remind us. What was their ‘social purpose?’ Perhaps it is to “hand billions of pounds of subsidised loans to relatively wealthy homeowners” while welcoming the Government’s rent increases to all tenants on modest wages or fixed pensions from April 2020.