Who will benefit from Help to Buy?

Now that details of Help to Buy 2, the government’s scheme to support 95% mortgages, have become available, media analysts are questioning who it will work for and where. The Financial Times concluded that because of high house prices in the South East, most people would be better off renting there, while renters in the North-East would be better off using the scheme to buy a home. The Telegraph focused on affordability, and calculated that in London, the average first-time buyer would not have a big enough income to qualify for the loan they needed. In contrast, buyers in the North East would probably have more than enough income to qualify for a loan – but given the high interest rates on 95% mortgages, they still might not be any better off.