Help to Buy must do more for those who need it most
West Cornwall MP, Andrew George, has responded to Bank of England Governor Mark Carney’s warning of the dangers of the booming housing market by stating that the Government should place more priority towards helping young families and couples get on the first rung of the housing ladder with the ‘Help to Buy’ scheme.
Mr George said, “Mark Carney is right to highlight the risk of a housing bubble undermining the recovery. But, if the Government’s ‘Help to Buy’ scheme guaranteed the ‘intermediate market’ it would encourage the building of thousands of much needed homes to meet a desperate local need in those areas where the lowest rung of the ladder was out of reach of those on average local wages. This would make a real difference to hard pressed families in places like Cornwall and the Isles of Scilly with little risk of triggering a housing bubble.
“The presently designed Government ‘Help to Buy’ scheme will have precious little benefit in areas like West Cornwall and the Isles of Scilly. It is surely commonsense and common decency to direct the ‘Help to Buy’ scheme towards helping those who are looking for an affordable home on a new and lower rung on the housing ladder. It would be better to assist local families or couples in genuine need rather than those who want to buy a property for up to £600,000 with Government assistance.”
Mr George, who worked in the housing sector before becoming an MP, proposed to the Treasury last year that the ‘Help to Buy’ scheme should also act as guarantor to mortgage lenders who are reluctant to back shared equity/ownership models which allow first time buyers a chance to get into a market they are otherwise excluded from. He said that, “crucial Government backing would breathe new life to the struggling sector of the intermediate market of a shared ownership, shared equity and mutual housing models. This would create a housing market that is within reach of many people in places like West Cornwall and the Isles of Scilly; and run little risk of adding to inflation in the housing market, unlike the clear and present dangers of creating a new housing bubble through the existing rules of engagement of the ‘Help to Buy’ scheme.
“West Cornwall has an entrepreneurial spirit. It has a much higher than average amount of those who are self employed, but those who are setting up a new business or developing a business are often hamstrung from within the housing market. Many find that lenders are not prepared to offer them the opportunity to meet their housing needs, even those who have turned their entrepreneurial spirit into a business success story showing healthy profits. These local business owners are still not getting help from lenders or indeed the Government to buy their own homes.
“So instead of helping to create another get rich quick housing market, the Government should instead be focusing their energies towards freeing up the terms and conditions on lending for shared equity homes. This part of the market needs to be kick-started as it provides the best available chance for many couples, families and self starter business owners to take their first step on the property owning ladder.”
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