Growing pressure from housebuilders for the government to extend the Help to Buy scheme looks to have paid off, according to several insiders.
In the past year, Help to Buy has accounted for more than 40% of sales of new-build homes to private buyers.
The controversial scheme, which gives buyers a loan for 20% of the cost of a newly built house or flat in England, is due to end in March 2021.
Housebuilders have been lobbying for an extension because the programme has helped to boost sales, profits, share prices and directors’ pay.
According to the Sunday Times, insiders think the pressure has paid off and that the chancellor Philip Hammond will announce the extension in his Autumn Budget.
Analyst Alastair Stewart of broker Stockdale said: “Help to Buy has been a huge help for builders. It will almost certainly be extended in the budget — but maybe with some cosmetic tweaks.”
It comes amid criticisms of the scheme, with figures suggesting about a fifth of people using it are not first-time buyers and are instead moving to a bigger property. There is also no limit on the income of people who can take advantage of the scheme.
Labour has called for the programme to be targeted at first-time buyers on “ordinary” incomes.
An insider at a leading housebuilding group told the Sunday Times: “The government might reduce the 20% figure or the ceiling on the price of the house being bought. But we don’t think we will face a cliff-edge in 2021.”
Housebuilders’ share prices have soared in the past five years. Persimmon, which was forced to reduce its CEO’s bonus after a major backlash from investors, has seen its shares soar by 138%.
What is DealMakerz Prime?
In depth stories
Want to know the story behind Britain's latest property mogul? Why a company is going bust? Our coverage goes beyond run-of-the-mill news on key real estate issues.
High powered community
Our subscribers are made up of the most influential Founders and CEO's in UK property. Gain a competitive edge and get informed - read what they read.
Exclusive guest articles
Understand exactly what the most senior figures in UK property are thinking. Exclusive opinion articles from powerful real estate influencers that move markets.