One of my issues would be the constant carping from all sides about every initiative undertaken. Don’t get me wrong, whatever colour of their politics, it’s entirely reasonable for ministers to be criticised when initiatives don’t work.
However, when they go extremely well and by any measure can be seen to have been fit for purpose, even then some aggrieved party or other will criticise the success. Help to Buy is one such initiative. Industry and consumers were crying out for government support for an industry and market that was on its knees.
The Help to Buy scheme was therefore launched essentially to allow those who could afford a mortgage but not a deposit to access finance. This was a smart move by the government who clearly identified the central role that housing plays in the UK economy – restart this market and others should follow, was I guess the logic. The results have been impressive to say the least.
This not only begins to address the housing stock shortfall, but generates thousands of jobs in the construction industry.
Lending levels have also steadily grown since the introduction of the scheme – although significantly they are nowhere near the pre-crash levels of 2007. It is the first-time buyers, who need the higher LTV loans that Help to Buy facilitates, that have made up a significant proportion of growth. So we have a successful scheme and guess what? The calls to halt it grow by the day – citing the potential for a housing bubble to derail the entire recovery of the UK.
This is absolute nonsense. House price growth nationally was something like 2% after inflation is taken into account – hardly an overheating market. It’s true that the South East is experiencing higher than average growth – is anyone really surprised by that?
You have to go a long way back in the records to find any other pattern. There is an argument that the funds made available via the scheme could have an even greater impact if redistributed geographically but calling a day completely would be completely illogical at this stage.
Richard Sexton is director of business development at e.surv
