Help to Buy can only go so far when we need help to build

Miley Cyrus has a new album out, a Frozen film is heading your way and Help to Buy is going to unlock the housing market. You’d be forgiven for reading these statements and mentally placing yourself in 2013, but these are all very much relevant to the here and now of 2025, because twelve years after it was first launched by George Osborne – which is coincidentally how long it takes to get Let It Go out of your head – Help to Buy is making a return of sorts. 

For the first time, major private builders are stepping into a space once dominated by government intervention. Barratt and Persimmon, with partners QSix, Ahauz, Barclays and TSB, have apparently run out of patience with government efforts to stimulate the housing market and have introduced a scheme called the Rezide Equity Loan, under which buyers of their new build homes can put down a 5% deposit. With all the major housebuilders calling for demand stimulus, it’s only a matter of time before others follow suit with a similar product.

However, the question is whether this intervention will provide the needed shot of adrenaline to an ailing housing market, or if it will be about as well received as Miley Cyrus’s teddy bear twerking of 2013. 

At first glance, this looks like a timely stimulus. The housing market is in the doldrums. On the demand side of things, affordability remains stretched, with first-time buyers paying five times their annual earnings on average and a multiple of almost eight in London according to Nationwide, while a drop in house prices reported by Halifax suggests that prospective homebuyers are feeling cautious in the face of potential tax rises in the forthcoming budget. 

Things aren’t much better when it comes to supply. Bloomberg recently reported that homebuilding in London is on track to fall to a quarter of normal levels, with developers shelving projects amid weak sales and planning delays. According to Hamptons, the number of homebuilders trading in Britain fell by more than 1,500 — or 1.7% — in the year to September, representing the first annual decline in at least a decade.

So, for builders sitting on unsold stock and squeezed by higher borrowing costs, unlocking demand among first-time buyers seems an obvious way to boost the market’s vital signs. Indeed, by easing deposit constraints, Rezide could make the difference between remaining in rental limbo and securing a first home.

However, while the move signals an encouraging degree of private-sector innovation at a time when government housing policy has lost momentum and may offer a short-term boost to sales, it does highlight the real constraint on the housing market: the chronic shortage of new homes. While the government has taken steps to remedy this in the last year, more needs to be done and stimulating demand without unlocking supply risks widening the affordability gap. Further, policymakers could see this as an excuse to delay the harder work of structural reform.

Private-sector innovation should be welcomed but government needs to play its part too if we are to find a serious solution to fix the supply side and unlock more housing. Let’s hope we find that solution rather than find ourselves revisiting this topic in 2037.