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Housing 2024: Clarion chair attacks plan for revived Help to Buy as original scheme wasted public money
David Orr, chair of Clarion, has lambasted Rishi Sunak’s plan to revive Help to Buy, saying every penny of public money that went into the original scheme was wasted.
Addressing the Housing 2024 conference in Manchester on 27 June, Mr Orr said: “I listened to our current prime minister saying… we are going to reintroduce Help to Buy and we’re not going to charge stamp duty to first-time buyers.
“And there, in two short sentences, you have chapter and verse why our housing system has completely failed. Because nothing about that offer will deliver a changed system.”
He said there is now “a huge amount of serious, proper” analysis of the impact of the original Help to Buy scheme, which ran from 2013 until 2023.
It provided first-time buyers competitive loans for up to 40% of their property value and costed the taxpayer more than £29bn.
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“The price of housing went up by exactly the same amount as the value of the subsidy that went into Help to Buy,” he said. “Which means that every single penny of the public money that went into Help to Buy was effectively wasted.
“And yet, some people who were able to take advantage of it are going to be trapped in repaying debts that are bigger than they had anticipated.”
He added: “Every time we have subsidised demand in the housing market… it has put prices up.”
The Conservative Party’s general election manifesto includes a promise to launch a new Help to Buy scheme, albeit this time it would be partially funded by house builders as well as government.
The Clarion chair said that government guarantees for housing associations can reduce borrowing costs for landlords “very substantially”.
“In practical terms, that costs the government nothing,” he said. “There have been two affordable housing guarantee funds – we could massively expand that.”
Mr Orr was joined by David Walker, Bishop of Manchester, for a panel discussion on the recent Homes for All report published by Nationwide and the Church of England, which called for a committee to work with the government on its housing goals.
The bishop said the role of housing minister “should not be a brief that’s for someone who’s on the way up”, or “a sop for a party loyalist”.
“We need housing at the heart of government”, he added.
He said that the Church of England had decided to set up “quite a small” housing association, which is currently going through the registration process, using Church of England-owned land to build affordable and social rented homes.
Mr Walker said the government should stop “wasting money” on Right to Buy discounts.
“What was it Boris Johnson said? Stop spaffing money up against the wall? Let’s stop doing that in housing,” he said.
Elsewhere on the last day of the conference, major house builder Vistry warned that cutting solar panels from the Future Homes Standard could double energy bills in new build homes.
