Taken at face value, the statistics from the first month of the Help to Buy mortgage-assistance scheme appear to calm, rather than stoke, fears of an imminent, state-funded housing bubble.
Not only have more than 2,000 people put in offers on homes but average borrowing of a modest £155,000 – far from the £600,000 ceiling – suggests sober good sense rather than a return to sub-prime madness. That most applicants are first-time buyers, many of them young, only adds to government self-satisfaction. Cue prime ministerial gushing about hard-working people realising their dreams of independence.
Look closer, though, and the old – and entirely rational – fears flood swiftly back. First, there is the simple matter of time. For the Government to conclude that the scheme is “delivering” within a single month is laughably precipitous, even more so given that the Bank of England is working on the principle that it will take at least six months to draw conclusions.
Then there is the detail to consider. Proponents of Help to Buy defend the scheme against the charge that it will push up prices, by pointing out – not entirely unreasonably – that, outside the South-East of England, the market is far from buoyant. In some regions, it is even falling. The problem is that, according to early data from RBS, it is in the inflated South that state backing is proving most popular. Just 3 per cent of Help to Buy applications came from the North, 30 per cent from London and the South-east.
A single month’s figures are not conclusive here either. But the trajectory is concerning, not least because it is so predictable. Were the Government serious about helping people on to the property ladder, the priority would be to build more houses. Help to Buy is double trouble, tying taxpayers into loans that banks would otherwise consider too risky, while encouraging more demand in an overcrowded market.
With the property-owning class basking in the warm glow of capital growth, the short-term result may well be more Tory votes in 2015. But the merry-go-round cannot continue forever. And even the gratitude of a few new homeowners cannot justify what remains a politically motivated scheme of breathtaking cynicism.