The Help to Buy house purchase scheme, which came to an end tomorrow, has nearly 2 billion in profit, according to the Treasury.
Since it was launched by George Osborne when he was chancellor in 2013, more than 375,000 loans have been made by the government to people looking to buy their first home. They borrowed 62,000 on average.
According to Homes England, the housing accelerator on each of the loans the UK Treasury has is on average 4,700 in profit, on paper at least. The government stands to make a profit of around 1.8 billion from Help to Buy, assuming house prices stay roughly where they are.
The Treasury and the taxpayer have the right to rise prices, proportional to the size of the loan, because of the scheme of equity loans. A 20 per cent equity loan that sells their house for 10,000 more than the amount they paid would need to repay 2,000 to the government on top of the initial value of the loan.
Since Help to Buy was introduced, house prices in the UK have risen by 54 per cent since Help to Buy was introduced, according to Nationwide. Average prices have gone up by more than 20 per cent since the start of the epidemic three years ago.
As of March last year, nearly a quarter of all Help to Buy loans had been repaid, for which the Treasury received 5.52 billion, having originally lent 5.05 billion. The Treasury has written Help to Buy loans of nearly 24 billion dollars, which have been used to buy homes worth 105 billion. The finals will be higher because of the figures from September. The government has racked up millions of pounds in interest payments as well as the capital gains to which it is entitled. The financial year 2021 -- 22 came to 34.3 million.
Help to Buy was introduced to increase the number of people into homes, to get more houses built and to stimulate the economy. According to developers, hundreds of thousands of people used the scheme to get on the property ladder, twice as many houses were built last year than in 2013 and 63 billion in economic activity was generated by Help to Buy, according to the Home Builders Federation.
Some critics called it Help to Profit because of the financial performances of developers and the bonuses afforded to some executives - most notably Jeff Fairburn, the former chief executive of Persimmon, who was paid more than 75 million. A House of Lords report blamed Help to Buy for pushing up house prices and concluded that the money would have been better spent on increasing housing supply. From Saturday there won't be an incentive scheme targeted at first-time buyers for the first time in decades. The HBF said that builders can only build if buyers can buy. It added that would-be buyers' ambitions would be thwarted by the withdrawal of the scheme.
The Treasury said Help to Buy loans have helped thousands get on the property ladder and provided extra revenue to go into public services.