Who is Help to Buy actually helping? You can add developers to the well-to-do families and London professionals that critics have identified as big beneficiaries of the taxpayer-underwritten mortgages accompanied by deposits of as little as 5 per cent of a home’s value.
Taylor Wimpey has demonstrated how the scheme has helped to turn it into a tower of strength. Just about every number in the UK part of its latest trading statement covering the first half of 2014 is going in the right direction. Average selling price? Up. Number of homes built? Up. Profits? Up. Margins? Up. Cancellations? Down.
Just how important the Help to Buy Scheme has been to the company’s success can be seen in the fact that 42 per cent of its private customers bought their homes through the scheme’s loans. A further 2,000 households soon hope to be joining them.
Now to be fair, Taylor Wimpey is a national housebuilder and its customers paid an average £207,000 for their homes, which is considerably less than the average selling price in Britain.
For the most part, these are the people Help to Buy was supposed to benefit; those on relatively modest incomes who would struggle to get on the housing ladder if asked to stump up chunky deposits. But Taylor Wimpey is surely benefitting alongside them.
No wonder the company is talking about a “balanced” housing market while pooh-poohing talk of a bubble that spooked the Bank of England into forcing banks to get tough with borrowers. It doesn’t want to see the goose that has laid its golden egg killed. Housing crisis? What housing crisis? And if you want to see garden cities springing up around southern England, you know who to call.
The problem, of course, is even £207,000 is too much for an awful lot of Britons. The very real housing crisis is at its most acute when it comes to sort of people who wouldn’t have darkened lenders’ doors even before the Bank’s clampdown; the sort of people left desperately chasing the handful of affordable properties available across the South-east.
Taylor Wimpey is at pains to stress that it also builds affordable homes. And the numbers are up, too! Just not by much. The overall number of new homes completed by Taylor Wimpey increased by 11 per cent to 5,766. But the number of affordable new homes that were completed increased by just 1 per cent to 940. That’s a grand total of 10 more than in the first half of 2013.
Given the benefits that Taylor Wimpey and other developers are accruing from the taxpayers’ largesse, you’d think the Ministers who oversee that generosity could find a way of getting them to do a little better.
A crazy money-go-round where only passengers suffer
Corporate fines are getting bigger, and it’s not just the banks that are suffering.
Thanks to a lamentable performance when it comes to punctuality, Network Rail has been hit with a £53m zinger. Ouch. Now, you might think that a fine of £53m should get people’s attention. Even that of a body like Network Rail. But who is actually going to be paying this penalty?
Network Rail is an odd institution, created by the last Labour government to take over running Britain’s rail infrastructure (track etc) from the ashes of Railtrack.
It’s notionally a commercial company, but one that doesn’t pay dividends. And instead of shareholders, it has appointed members.
These are largely the sort of worthies who sit on boards and can be relied on not to make a fuss about issues such as chief executive Mark Carne’s £675,000 salary.
After years in limbo, this “company” will officially become a public body this year, thanks to the urgings of the Office for Budgetary Responsibility. Even though, in reality, that’s what it always has been.
So in levying this fine, we have one part of the public sector, the Office of Rail Regulation, penalising another.
Fines on corporations are of questionable efficacy at the best of times but this – in the words of one of the rail unions – really is nothing more than a “crazy money-go-round”. Because in relieving Network Rail of £53m, the watchdog will inevitably crimp the ability of the “company” to improve the situation that has led to the fine in the first place.
But it won’t be anyone connected with Network Rail who will suffer as a result of the penalty. No, the punishment fall on the travelling public, the victims of the “company’s” mismanagement in the first place.
Meanwhile we have Mr Carne talking about “what passengers want” while blethering on about trade-offs between “capacity and reliability” – in other words, if you want more trains they’ll be late – in the knowledge that his salary is quite safe.
As for what happens to the fine money, at least part of it will apparently be spent on improving trackside wi-fi for passengers. So at least they’ll be able to surf the net while they wait, and wait, for their trains to arrive before crawling to their destinations. Isn’t that nice?
Golden opportunity to drag metal market into real world
One train that has left the station is the World Gold Council, which for years moved at the speed of a horse and cart with a broken axle.
While the rest of the City got technology, the gold price was for years set by five blokes in a room at NM Rothschild who indicated they were ready by lowering a miniature Union Jack.
Amid mounting accusations, this “fix” is being fixed. The council has boldly decided that “the need for a single, trusted, benchmark reference price is in the interests of the millions of people involved in the gold market around the world’. Well, yes.
And, chaps, if you want a “transparent benchmark that mitigates any potential reputational risk for those administering the benchmark”, you could do worse than changing the name.