MPs warn Help to Buy could be loss-making - Mortgage Strategy

"Committee members warned that the scheme could prove to be loss-making for the government.

While the government told MPs it expected to make a positive cash return on its investment in the Help to Buy scheme, once this is adjusted for inflation it is forecast to make a small loss, although ministers argue the economic benefits of the initiative outweigh the costs.

The report says: "The former chair of the Housing and Finance Institute told us that, should house prices fall or interest rates increase, the department could make a substantial loss on the scheme."

The MPs note highlight the fact that among the first wave of Help to Buy borrowers, redemptions have been far higher than the government anticipated, which will also weigh on returns for the taxpayer."

Click here to read the article in full. 

Back to all posts