Help to Buy? It’s more like Help to Prop Up Crazytown

Every year, the increase in property prices dwarfed the increase in my earning

The housing market is the perfect illustration of the truth that laws of supply and demand are considerably less powerful than the almighty Sod’s Law.

It should all be so simple: house prices rise gradually over time, because people want to buy a house. When prices rise so high that no one can afford to buy, the market corrects itself, and prices drop. This vision is so fantastical that it might as well end with “And they all lived happily ever after”.

House prices haven’t ever risen gradually during my working life. They have leapt up in value, hurling themselves past wage increases without a backward glance. I spent years saving for the deposit on my flat: every year I earned more than I had before. And every year, the increase in property prices dwarfed the increase in my earnings. The more I achieved, the further I was from owning a home.

Luckily, George Osborne is on the case (a sentence I can’t even type without sighing). His Help to Buy scheme is intended to deal with the problem that banks don’t want to provide mortgages on properties which they fear may drop in value. This might be because even the banks, which have tended to wear spectacles so rose-tinted that they are essentially two solid pink blocks through which nothing can be seen at all, think that properties are overvalued.

So the right thing to do is surely to let the market correct itself. Isn’t that the point of believing in the wisdom of the market? Yes, it would be horrible for people needing to move and stuck in negative equity, but there are far fewer of them than there are would-be first-time buyers, watching their wages stagnate and their putative home recede further into the distance. Maybe the £12bn being used for Help to Buy (or, as it’s known in my house, Help to Prop Up Crazytown) be used to bail out the negative equity sellers.

The net result of this could be property prices ordinary people could actually afford. Instead of which, we have a country split into unaffordable housing (where the work is) and, as seen in Stoke-on-Trent earlier this year, dilapidated properties being given away by the local council for £1. The property market is as skewed as it is screwed.