Help to Buy will help the haves, not the have-nots

There is no evidence that Help to Buy has stimulated more house building

Share

Would you like to own a rather wonderful five-bedroom country property with period features, stables and a detached holiday  cottage set in 3.5 lovely acres? Of course you would. Not to mention that, if you have only £30,000 for a deposit, the Government is prepared to guarantee £120,000 of the loan you will need to buy this £600,000 dream house. Yummy.

But hang on. Why should the Government be doing this? And can it be morally right for people who are well off enough to afford to repay a £550,000 mortgage to accept a guarantee underwritten by taxes paid by people who can’t afford to buy at all, or even to rent a place of their own?

Naturally it didn’t take long for estate agents to wake up to the marketing potential of David Cameron’s announcement at the Conservative Party conference last Saturday that Help to Buy would be extended to the second-hand market this month instead of next January. The day after he made it, traffic to the Help to Buy section of Rightmove, the agents’ leading portal, leapt from 14,000 to 60,000. The website explains the entitlements precisely to agents as well as buyers, and Help to Buy is already featuring in many property advertisements.

Mortgage lenders are also cheerful. Santander reports that 10 per cent of people plan to move in the coming year, and that a third of them will take advantage of Help to Buy, allowing them to lend virtually without risk. Yippee.

The economic insanity  of Help to Buy is well rehearsed. Everyone from the IMF to Sir Mervyn King warns of the risk of inflating the housing market by a further £12bn. There is no evidence that the Government’s stated purpose for Help to Buy, which is to stimulate the building of more homes, desperately needed to relieve the housing crisis, is materialising.

It is a truth universally acknowledged that more money chasing restricted supply will lead to price rises and, unlike those elusive new homes, they are already with us. The Government wants to be seen denying it’s causing a “property bubble”, but is secretly pleased – as all previous governments have been – because the majority of voters are home owners who can see no further than the next dinner party chatter about how the value of their house has gone up, praise be.

Help to Buy is as morally bankrupt as it is economically. The guaranteed winners in the £12bn stakes will be estate agents, mortgage lenders (aka banks), developers and well-off home buyers.

The losers will be those hard-working families politicians are so fond of prattling on about, who pay taxes but are struggling to pay the rising cost of everything else. They will have to grit their teeth as their hard-earned tax money enables people far richer than themselves buy homes they can only dream of.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

(Senior) IT Support Engineer - 1st-3rd Line Support

£40000 per annum: Ashdown Group: A successful IT service provider that has bee...

Wind Farm Civil Design Engineer

£55000 - £65000 Per Annum: The Green Recruitment Company: The Green Recruitmen...

Principal Marine Mechanical Engineer

£60000 - £70000 Per Annum: The Green Recruitment Company: The Green Recruitmen...

Principle Geotechnical Engineer

£55000 - £65000 Per Annum: The Green Recruitment Company: The Green Recruitmen...

Day In a Page

Read Next
A Russian hunter at the Medved bear-hunting lodge in Siberia  

Save the Tiger: Meet the hunters tasked with protecting Russia's rare Amur tiger

Oliver Poole
Save the Tiger: Meet the hunters tasked with protecting Russia's rare Amur tiger

Hunters protect Russia's rare Amur tiger

In an unusual move, wildlife charities have enlisted those who kill animals to help save them. Oliver Poole travels to Siberia to investigate
Transfers: How has your club fared in summer sales?

How has your club fared in summer sales?

Who have bagged the bargain buys and who have landed the giant turkeys
Warwick Davis: The British actor on Ricky Gervais, how the Harry Potter set became his office, and why he'd like to play a spy

'I'm a realist; I know how hard this business is'

Warwick Davis on Ricky Gervais, Harry Potter and his perfect role
The best swim shorts for men: Bag yourself the perfect pair and make a splash this summer

The best swim shorts for men

Bag yourself the perfect pair and make a splash this summer
Has Ukip’s Glastonbury branch really been possessed by the devil?

Has Ukip’s Glastonbury branch really been possessed by the devil?

Meet the couple blamed for bringing Lucifer into local politics
Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup