Back in 2013, , the UK central government launched “Help-to-Buy“, a scheme that provided government mortgage guarantees to marginal borrowers that would not otherwise qualify for a loan. At the time, Help-to-Buy was denounced by the Office of Budget Responsibility and the Treasury alike, who claimed that the scheme would do nothing but force-up the cost of housing, whilst opening taxpayers up to potentially large losses in the event that loans turn sour.
To date, Help-to-Buy has injected a massive £8.9 billion of Government support into the housing market, with a further £10 billion pledged as the scheme has been extended until 2021. Under the scheme, the Government lends up to 20% (40% in London) of the cost of a new-build home, with the buyer adding a 5 per cent cash deposit. The loan is interest-free for the first five years. So far, nearly 170,000 buyers have used Help-to-Buy to enter the housing market.
