By Harry Scoffin
Leasehold houses are STILL being sold under the Help To Buy scheme and taxpayers’ subsidy for them will remain until 2021, the Communities Select Committee has been told.
Only in 2021 do the existing Help To Buy procedures end.
Oral evidence – MHCLG annual report and accounts 2018 – 21 Jan 2019
Housing, Communities and Local Government Committee Monday 21 January 2019 : Melanie Dawes CB, Permanent Secretary, Ministry of Housing, Communities and Local Government; Jeremy Pocklington, Director General, Housing, Ministry of Housing, Communities and Local Government; Dr Jo Farrar, Director General, Local Government and Public Services, Ministry of Housing, Communities and Local Government .
The issue was raised by committee member Theresa Pearce MP last month after she referenced the inquiry into leasehold injustices.
Four per cent of the Help To Buy funding has been used to purchase leasehold houses, even though most house builders have abandoned offering them for sale owing to public outrage.
An MHCLG official accepted that the state has exposed itself to risk by having leasehold houses eligible under the flagship housing policy:
“On the issue of modelling the Department’s exposure, you are right that the Department has an exposure to the housing market through the scheme. That is something that we look at very closely. We do a lot of modelling against stress-test scenarios, for example those from the Bank of England, to determine what our exposure is.”
The official claimed that government is only impacted if beneficiaries of Help To Buy elect to sell their leasehold houses. “Of course, any losses are realised only if an individual sells their home,” he added.
And it was claimed the proportion of new-build leasehold houses now being sold under Help To Buy is very small.
“On the specific issue of our exposure to any losses associated with leasehold houses, they are a relatively small proportion of properties available under the scheme, whatever the terms of that lease are. At the moment, only about 4% of properties under the scheme are being sold to leasehold houses. Ideally, we want that to be even lower still.”
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Have I got this all wrong or are the government not taking into account the bigger picture.
They only seem interested in not losing money (taxpayers money) and no interest in the purchasers who purchased leasehold, many not realiseing what they were in for.
The HTB scheme may well end in 2021 but the government could have stopped it being used to purchase leases (glorified rent books) at the stroke of a pen when it all came to light about totally unnecessary leasehold house sales. They can still do that today.
Had the HTB scheme been cancelled it would have reduced the amount of available “customers” to the builders.
All that the HTB scheme has done is drastically helped builders to sell leasehold houses.
In fact, in the case of leasehold, it should have been designated Help To Sell (on behalf of builders)