More rich households than poor ones are benefiting from a £25bn public subsidy that the former prime minister Theresa May claimed was “restoring the dream of home ownership for a new generation”.

More than 5,500 households with an annual income of over £80,000 have been given help-to-buy loans in the past year compared with 4,142 households earning less than £30,000, the government’s own figures have revealed. Well over 2,000 of the richest households who were awarded taxpayer-funded loans, allowing them to buy new-build houses with only a small deposit, had incomes in excess of £100,000.

The flagship scheme has previously been criticised for swelling housebuilders’ profits by creating more demand for new properties and pushing up their prices. In 2018, help-to-buy transactions underpinned about half of Persimmon’s sales as the housebuilder racked up profits of more than £1bn. However, millions of renters have not been able to afford to access the scheme.

Whitehall figures now show that average renting households, with an income of £27,000, are missing out and a mere 0.2% of England’s private renting households used help to buy in 2018-19.

Shelter, the housing charity, which analysed data from the English Housing Survey, said it shows the policy has done little for the large majority of private renters looking for a stable home.

“Help to buy is often touted by the government as a major success, when in truth it’s a major failure,” said Polly Neate, the chief executive of the campaigning charity. “It’s a policy that boosts the bank balances of big developers but has nothing to offer the average renter.”

Between the start of the scheme in April 2013 and September 2018, 38% of all new-build property sales had been supported by loans through the scheme, according to a report by the Commons public accounts committee. The government’s own research has found that three-fifths of buyers could have bought a property without the subsidy.

When the scheme was launched it was also intended to encourage housebuilders, still recovering from the credit crunch, to start building more. The government lends first-time buyers up to 20% of the cost of a newly built home, so they only need a 5% cash deposit and a 75% mortgage. But even finding 5% is too much for many average income renters.

Sylvia, 42, a mother of two who rents a one-bedroom flat, said that despite earning over £35,000 she could not afford to use the help-to-buy scheme.

“Although my flat is nice, I need two bedrooms really as my girls are sharing a double bed and I have to sleep on the sofa,” she said. “My dream is to buy somewhere one day but at my age it’s scary – even coming up with a 5% deposit feels impossible.”

By 2023, the net amount loaned through the scheme is forecast to peak at about £25bn in cash terms, according to the National Audit Office.

“At the crux of this crisis is the desperate shortage of genuinely affordable social homes,” said Neate. “In fact, 3m more social homes are needed in the coming years. This is where the new government should be taking decisive action, and where the greatest opportunity to help trapped renters lies.”

A spokesman for the Ministry of Housing, Communities and Local Government said: “Whatever your background or postcode, you should have the opportunity to buy a place to call your own.

“So far Help to Buy schemes have been used over 500,000 times to help families across England buy their home and we are determined to go further to help people on lower incomes on to the housing ladder.

“That’s why this week we announced a new shared ownership scheme which will allow people on lower incomes buy their home in 1% chunks.”





