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There’s so much great literature on this planet’s bookshelves: Shakespeare, Melville, O’Hara… so why did I read George Osborne’s Mansion House speech for a second time? Hm, beats me. Although it was probably something to do with his remarks about Help to Buy. The Chancellor’s rhetoric, when it came to his housing scheme, was even more ironclad than usual. “The facts show that Help to Buy is working as intended,” he said. He dismissed those who would have it stopped as “ideological”.

Well, I’d stop Help to Buy tomorrow, but I’m not so ideological about it that I won’t admit the situation is complicated. This is part of the problem with the political debate surrounding Osborne’s Great Housing Giveaway: its participants tend to speak in adamant certainties. For its advocates, Help to Buy has “fixed” some of the most dysfunctional parts of the housing market. For its detractors, it has fuelled terrible house price inflation. The truth, however, is a little muddier.

The first thing to note about Help to Buy is its diminutive scope. According to the latest figures, almost 28,000 homes have been purchased under the two parts of the scheme; which may sound like a lot, until you consider that there were roughly 1,250,000 residential transactions completed in that time. So, Help to Buy was involved in only about 2 per cent of sales. That number is likely to increase – given that the house-buying process is convoluted and many people won’t have completed it in time for the statistics – but few analysts expect it to reach the maximum implied by the Government’s figures. That would mean a ratio of 14 per cent.

For those two-percenters, I’m sure Help to Buy has done what it claims: helped them to buy. It’s from this limited perspective that Osborne’s arguments are most readily substantiated. As promised, it has given a boost to new builds: 74 per cent of the houses bought under the scheme are fresh from the shop. As promised, it hasn’t just gone towards market speculators in London: 94 per cent of the sales are outside of the capital. As promised, it doesn’t appear to have overstretched borrowers to breaking point: the average price of houses sold under Help to Buy is considerably lower than the national average. And so on.

But while Help to Buy has directly helped a small flock of buyers, what has it done to help the situation more generally? Ask the 250,000-plus renters who, according to Priced Out, have been, er, priced out of the housing market by inflation since Help to Buy was introduced. Their collective answer would not be particularly optimistic. The horrible truth is that this country doesn’t have enough houses. The market still suffers from various imbalances of supply and demand.

To be fair, Osborne isn’t oblivious to this problem: in his Mansion House speech, he stressed that “we need to do much more” to increase housing supply. But ministers, at other times, have been eager to cite increased house-building as a success of Help to Buy. By doing so they ignore questions of whether it’s more the wider economy, than one housing policy, that’s responsible: some housing companies have doubled their profits in the last year, without Help to Buy. And they neglect the fact that still many more houses need to be built: the deficit of new homes currently stands at around half-a-million.

And that’s before we consider the indirect effects of Help to Buy. Its direct effects may have been limited, but its indirect effects could be monstrously huge – it’s just hard to enumerate them. What we have is a flagship policy that basically says: borrow some money on us. Not only is this an abrogation of the governmental responsibility that’s meant to define the Coalition’s deficit reduction plan, it also undermines the theme of “personal responsibility” that Cameron used to go on about. It creates a new atmosphere. Already, the riskier end of the housing market is growing. Loans with deposits of less than 10 per cent have just risen to a five-year high.

The main problem with these indirect effects, apart from their nebulousness, is that they are difficult to draw back. The Bank of England’s Ben Broadbent was surely right to say that, if you’re “worried about the growth of credit, I doubt that ending Help to Buy … would be sufficient to the task” – after all, it’s only 2 per cent of sales. Stopping it tomorrow probably wouldn’t change much. But, insofar as it has turned up the heat under an overheated housing market, the scheme has probably already wrought its change. And that change is for the worse.

Of course, the Chancellor is erecting his defences, including this new policy to allow the Bank to cap mortgage lending. This is wise, particularly with higher interest rates approaching. But it also tells its own story, that we should need such measures. The housing market is a mess. Help to Buy has helped in only a very limited sense – if that.

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