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The government鈥檚 changes to the Help to Buy scheme will make it more difficult for people to get onto the property ladder, Barratt has warned.

Britain鈥檚 biggest housebuilder spoke out publicly against the new version of the scheme, which will start next year, in comments published alongside its annual results this week.

The changes to the Help to Buy scheme come into effect in April 2021.  

It will be restricted to first-time buyers and there will be regional caps on the value of homes that can be supported, ranging from 拢186,100 in the North-east to 拢600,000 in London.

The firm鈥檚 chairman, John Allan, said the issue was concerning becuase there had been a reduction in the high loan-to-value lending that many people require to get onto the housing ladder., which had arisen post COVID-19, reflecting a response to a perceived increase in risk and high levels of demand. He said: 鈥漈he restriction and removal of Help to Buy will exacerbate this.鈥�

He added: 鈥淚t is important that lenders and the Government consider what further options are available to help potential first time buyers who want to purchase their own home.鈥� 

In a presentation accompanying the annual results, Barratt revealed that 35% of its sales over the last year had been supported by Help to Buy, and that nearly half of these would not have been eligible under the new criteria. This accounts for 16% of all sales last year.

The presentation also made clear that not a single major mortgage lender was now offering mortgages on new build properties at more than 85% loan-to-value.

This comes after the past few months which have seen many mortgage providers stop giving mortgages to people with small deposits. 

The news came as Barratt revealed the impact of covid-19 on its business, suffering a major drop in turnover and profit in the year to June 30. Revenue dropped by 28% and profit before tax fell by almost half - from 拢909.8m to 拢491.8m.

The company鈥檚 chief executive, David Thomas, said: 鈥淧rior to the pandemic the availability of both 95% LTV lending and the Government鈥檚 Help to Buy scheme provided invaluable help for those seeking to get onto the housing ladder. Today there are no mainstream mortgage lenders providing mortgages at 95% LTV for new build homebuyers.鈥�

He said the new regional price caps 鈥渨ill prove restrictive for many, particularly those looking to purchase new homes in parts of the North and the Midlands where the price caps create significant limitations on the choice of new housing available within the new scheme.鈥�

Thomas added: 鈥淒uring FY20, 46% of our purchasers who used Help to Buy would not qualify for the new Help to Buy scheme.鈥�

This comes amid concerns over the length of time it will take housebuilders to become approved to take part in the new scheme, revealed by 好色先生TV鈥檚 sister title Housing Today. Firms may not be able to get approval before the end of the year, and this could lead to a hiatus in sales, according to trade body the Home Builders鈥� Federation.