Government Help
Budget 2013: Confusion reigns over Help to Buy second home subsidy
The Government has been forced to deny that its new Help to Buy programme will be used to subsidise the purchase of second homes after accusations from Labour.
The Help to Buy announcement was a major component of George Osborne’s Budget yesterday. It comprises of a £3.5bn extension to shared equity loan programme First Buy and a mortgage guarantee scheme.
It is the latter part, which will be available to consumers from January 2014, which has attracted criticism from Labour’s Ed Balls. The Shadow Chancellor said that the scheme would allow property owners to obtain a second home at a discounted rate.
“It now seems his mortgage scheme will help people no matter how high their income to buy a subsidised second home worth up to £600,000,” he told MPs.
“From what I can see, the government is basically saying if you have got a spare room in a social home, you will pay the bedroom tax but if you want a spare home and you can afford it, we will help you buy one.”
Balls added: “That is not just tax cuts for millionaires, it is – dare I say it – a spare homes subsidy.”
Housing Minister Mark Prisk, speaking to the BBC’s World at One programme, was forced to deny that this was the case.
“Ed Balls is claiming that somehow you can get a loan under the Help to Buy scheme for your second home, let us be clear that’s not the case.
“Under the current schemes you would first have to divest your existing property prior to being able to proceed with any Help to Buy sale. This is about family homes, it is not about second homes.”
On this point, under questioning, George Osborne had earlier told BBC Breakfast that the full details of that part of the scheme had not been finalised.
“That is not the purpose of the scheme. We are consulting on the exact details of how it’s going to work. We don’t want to introduce such a complicated scheme that it doesn’t get off the ground.
“We are going to work with the big mortgage companies, who know their business. Our objective is to help people don’t own a home and people who may have a home but want to move into a bigger home.”
Vince Cable, the business secretary, also told the House of Commons that the scheme had not yet been full designed.
“I am quite sure these imagined horrors are not going to materialise,” he said.