Government plans to drop the Help to Buy scheme for homebuyers in 2023 have been labelled “political suicide” by an SME housebuilder, as new figures reveal the extent to which the initiative has bolstered the fortunes of the UK’s top firms and their shareholders.

The scheme – which sees homebuyers receive an equity loan from the government equivalent to 20% of the property they are purchasing, leaving them with only a 5% deposit to find – was due to end three years ago but has been extended twice, most recently last year when it was also limited to first-time buyers from 2021. It is now due to end in 2023.

Karl Hick, chief executive of East Midlands-based housebuilder Larkfleet, which builds around 400 homes a year, said housing supply would be “devastated” if the government turns it off. “I can’t see the government being prepared to switch it off – the repercussions would be dramatic,” he said, adding that it would be “political suicide” to scrap the scheme without any transitional arrangements.