The Times reports that the government’s Help to Buy scheme has enabled a thousand homebuyers to take their next move on the property ladder.
The scheme, which is available on new-build homes worth up to £600,000, has fuelled demand and in turn helped to boost prices.
Experts have suggested that the second phase of Help to Buy – a £12bn mortgage guarantee scheme that will not be limited to new builds – will boost confidence further.
Source: The Times
We say: These two items are not unconnected! We’re probably being dim here – there are lots of things we don’t understand about macro-economics. For example, remember the car-buying incentive scheme?
We never worked out how it helped the UK economy to bribe owners of perfectly good cars £1,000 to scrap them and buy a new vehicle made in the Far East.
Equally, when house prices are widely regarded as too high, we’d have thought the last thing you’d want to do is use scant public money to boost demand: surely the rational thing to do is increase the supply.