Government response

Public Accounts Committee report on Help to Buy: equity loan

Housing Minister Kris Hopkins responds to today's (18 June 2014) Public Accounts Committee report on the Help to Buy: equity loan scheme.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government


Housing Minister Kris Hopkins said:

The Help to Buy: equity loan scheme is helping build more homes and support the economy - in fact we estimate the wider economic benefits of the scheme could be as much as £1.9 billion. So it is offering excellent value for money for taxpayers’, and to suggest otherwise is simply absurd.

Since the scheme’s launch, housebuilding is up a third and now at its highest level since 2007. Over 27,000 people across the country have used Help to Buy to get on the property ladder with a fraction of the deposit they would normally require, with cities including Leeds, Durham and Manchester seeing some of the biggest numbers of sales.


The Help to Buy: equity loan will help around 200,000 hard-working households buy a new build home without costing taxpayers a penny. The £9.7 billion programme is already delivering significant economic benefits across the country, and we expect the economic benefits to outweigh the economic costs over the lifetime of the scheme.

Every sale under the Help to Buy: equity loan is for a new build home, and housebuilders are using this momentum in the housing market to increase output.

Independent economic reports have described Help to Buy as ‘the single most important catalyst in the revival of housebuilding’ (source: Morgan Stanley).

If people can buy homes, builders will build them. Since the introduction of Help to Buy: equity loan housebuilding has increased. Construction orders at the start of the year were at a 13-year high, while planning approvals and housing starts are at their highest level for 6 years.

Almost a million independent firms are involved in the construction industry, accounting for 20% of all small and medium-sized companies, and businesses that supply building products have an annual turnover of more than £50 billion, which contributes 4.5% to the UK’s Gross Domestic Product.

Housebuilders are taking on new apprentices, trainees and graduates, and new research by the Construction Industry Training Board predicts 182,000 construction jobs will be created over the next 5 years.

We’re also getting Britain building with a range of measures aimed at boosting supply.

The Help to Buy: equity loan scheme enables people to buy a newly-built home with a deposit of at least 5% of the property price, while the government offers a loan of up to 20%. The rest is covered by a mortgage. More than 20,000 people have bought homes through the Help to Buy: equity loan

This scheme also complements the Help to Buy: mortgage guarantee, which has helped open up the mortgage market and enables people to buy with a mortgage of up to 95% of the property’s value, by offering a guarantee on part of the loan to the lender. Since its launch in November, more than 7,000 people have bought homes through the mortgage guarantee.

Published 18 June 2014