Appeal to put time limit on Help to Buy

THE Government’s flagship £130bn Help to Buy scheme could damage the economy in the long term if it goes on indefinitely, a leading housebuilder has warned.

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Taylor Wimpey’s chief executive Pete Redfern is calling for the Government to set a time limit rather than let it drag on for 20 years.

Mr Redfern said that critics of the scheme are “quite right to worry” that Help to Buy could distort the UK housing market.

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He said that while the scheme has helped the market “over a bump”, there could be potential problems in the future.

“Where I would agree with the concerns is if successive Governments find it too difficult politically to exit Help to Buy – that’s where there is a genuine hazard.

“I think there needs to be thought given now to a sensibly managed withdrawal – even if the timing isn’t firm, at least what the methodology is, because as we get closer to that date, it will start to figure more highly in the minds of banks and individual homebuyers. Everybody needs a sense of confidence about what the plan is.”

The Help to Buy scheme, announced by Chancellor George Osborne in April was set up to help borrowers to buy new-build houses using Government-funded loans of up to 20 per cent of a property’s value.

The scheme was also designed to boost the construction industry. In May, Sir Mervyn King, then Governor of the Bank of England, warned that Help to Buy could make the house market dependent on the state.