Help-to-buy Isas have been opened at a rate of one every 30 seconds since the initiative launched on 1 December, George Osborne has announced.
The scheme, unveiled in the budget last March, gives those saving for their first home £50 for every £200 they put in the tax-free account to save for a deposit. Aspiring homebuyers can save up to £12,000 in the new Isas, entitling them to up to £3,000 of government money towards their deposit.
The Treasury said 250,000 people had opened a help-to-buy Isa account since the launch, equating to roughly 3,000 a day or one every 30 seconds. Data provided by a sample of banks offering the accounts suggest that 75% of the new savers are aged 30 and under.
Critics say the scheme could fuel demand for homes without increasing supply, and that the £2bn cost to taxpayers over the next five years could have been used to pay for thousands of affordable homes.
Speaking on a visit to a help-to-buy housing development in Sandbach, Cheshire, on Thursday, Osborne denied that the scheme was treating a symptom rather than a cause of falling home ownership.
“The best thing the government can do is to make sure that homes are being built for families in the right places and we have the right infrastructure,” he said. “The fact that so many people are making use of the help-to-buy Isa says to me that there’s a lot of pent-up aspiration there, there are a lot of families who want to get on the housing ladder.”
Dan Wilson Craw, policy manager at the campaign group Generation Rent, said: “It’s not a big surprise that free money from the government is proving so popular. The danger for first-time buyers is that their extra purchasing power will simply result in estate agents putting their asking prices up.”
Campbell Robb, the chief executive of Shelter, said: “The fact is, with house prices soaring by almost £20,000 in the last year alone this is nothing more than a drop in the ocean. In many parts of the country even the maximum amount you could save with government help won’t be enough for a deposit and, with half of renters’ incomes swallowed up by housing costs, for millions, saving anything at all is impossible.
“This money would be far better spent on building homes that people on ordinary incomes can actually afford to rent or buy in the first place.”
The new treasury figures came as Labour announced the launch of an independent review into the decline of home ownership, headed by Peter Redfern, the chief executive of the UK’s third-biggest housebuilder Taylor Wimpey.
John Healey, the shadow minister for housing and planning, said increasing home ownership was Labour’s housing priority.
“A million more households became homeowners under Labour, but home ownership is now in freefall,” he said. “Young people aspiring to own a home have been the hardest hit. What used to be a natural part of growing up is becoming a luxury for those on the highest salaries, or whose parents have the deepest pockets.”
Research by the House of Commons library, commissioned by Labour, showed that 280,000 fewer households headed by under-35s owned their home in 2015 compared with 2010.
The biggest drop has been among young people in professional jobs: 150,000 fewer such households own a home, 16% lower than five years ago.
The number of young people in working class jobs who own their home is down 20%, or 68,000 households. Just one in five young working class households own a home.
