Help to Buy-Wales: research study

Released On 9th Aug 2024

Help to Buy-Wales: research study

Welsh Government has had in place its Help to Buy-Wales scheme since January 2014 and between January 2014 and September 2023, Help to Buy-Wales helped over 13,800 households to purchase their home.  The current scheme is due to end next March and Welsh Government appointed our team of Opinion Research Services and Three Dragons to review the needs of homebuyers and the role Help to Buy-Wales plays in meeting these needs – to help inform Welsh Government’s decision about next steps in meeting the needs of future homebuyers.

The review involved detailed discussions with housebuilders, mortgage lenders and with over 30 purchasers and potential purchasers. The knowledge gained from the interviews was supported by a comprehensive analysis of the data held by Help to Wales Ltd about the characteristics of purchasers and about housebuilders and lenders registered for the Scheme.  Interviews were also held with Homes England and Scottish Government to explore the comparable schemes that had operated in England and Scotland, both of which have now been replaced.

The research was published in July 2024 and the full report (and a summary report) can be found on the Welsh Government website.

Help to Buy-Wales (HtB-W) was found to be a success in terms of house buyers’ participation and the support provided for large and small housebuilders but the research team highlighted three structural criticisms:

HtB-W does not address the housing needs of those in most pressing housing need but does help households on the cusp of becoming home owners

HtB-W was not available for properties other than newbuild which many purchasers and potential purchasers wanted, believing that older stock offers greater choice in property type and location

There was a general recognition of the purpose and application of the price caps operating  but with an argument about whether a single price cap for Wales is the best solution. 

In thinking about what should happen after 2025, the research outlined the key options open to Welsh Government – whether to continue with Help to Buy-Wales and, if so, changes that could be considered. Whatever the decision, the report highlighted the importance of engaging the housebuilding industry and lenders with the decision and giving them adequate time to plan their operations post March 2025.

Further information about the operation of Help to Buy-Wales

The scheme applies only to newbuild homes which are priced below the national price cap operating at the time.  It provides eligible buyers with a shared equity loan of up to 20% of the total market value of a property.  The loan is interest free until year 6, at which point annual fees are introduced.  The loan must be repaid within 25 years, or on sale of the property or redemption of repayment mortgage. 

Tags: Housing Policy Analysis