Société Générale global strategy team head Albert Edwards said the government’s latest mortgage scheme would inflate already overvalued house prices and should be renamed ‘indentured servitude’.
In his latest commentary on the housing market he said young people had little chance of buying a home: “Why are houses too expensive in the UK? Too much debt. So what is George Osborne’s solution for first-time buyers unable to afford housing?
“Why, arrange for a government-guaranteed scheme to burden our young people with even more debt. Why don’t we call this policy by the name it really is, namely the indentured servitude of our young people.”
Edwards, whose longstanding pessimism about the market has earned him the nickname Dr Doom, said he was seething with rage at a ‘moronic policy’ which ranked above some of former US Federal Reserve chairman Alan Greenspan’s ‘worst blunders’.
He later criticised Osborne for ignoring the view of market commentators.
Help to Buy has come under fire from leading economists in the UK including outgoing Bank of England governor Mervyn King, who urged policymakers to make sure the scheme did not become permanent.
However, US academic Dr Clifford Rossi, who worked with the US government-backed mortgage providers Fannie Mae and Freddie Mac, told Mortgage Solutions the creators of Help to Buy had learnt from the lessons of the financial crisis.