Housebuilders are not waiting for the government to bring back Help-to-Buy: they’ve decided to do it themselves.
Barratt Redrow PLC (LSE:BTRW) and Persimmon PLC (LSE:PSN) have joined forces with Barclays and TSB to launch a private version of the scheme that helped keep the housing market afloat a decade ago.
According to Bloomberg, buyers will be able to purchase a new home with just a 5% deposit.
A 15% equity loan, capped at £100,000, will fill the gap, with the rest covered by a standard mortgage.
The loan will sit as a second charge on the property and carry a fixed 4% interest rate. It is being underwritten by Ahauz, a Financial Conduct Authority-regulated lender, and unlike the original government version, it will not be repaid gradually.
Citi’s analysts say the move underlines how far affordability pressures have stretched even for buyers of new builds.
With mortgage rates still hovering around 5% and house prices showing only limited flexibility, developers have had little choice but to find creative ways to support demand.
The big question now is whether buyers will bite. The housebuilders’ offer is narrower than the original Help-to-Buy, which was backed by the Treasury and adopted by most high street lenders.
Without that universal reach or government underwriting, Citi doubts the new private schemes can deliver the same boost to demand.
Still, the initiative shows how determined the industry is to keep the sales wheels turning.
If anything, it may increase pressure on the next government to unveil a broader, state-backed replacement. For now, the builders are trying to plug the gap themselves... and hoping buyers take the hint.