We have all (those involved in the wonderful world of UK property) heard about the Help to Buy scheme; the government's latest way to help first-time-buyers on to the property ladder. In fact according to the rumblings it seemed like the government had actually gotten it right for a change, with a lot of surveys directly citing it as being behind the recent recovery.
That changed today however. Although the boss of Taylor Wimpey Pete Redfern agreed that the scheme, which guarantees the lender 20% of a loan on behalf of first time buyers has helped in the recovery, he said that if it is left in place in definitely it poses the risk of a "serious hazard" to the economy.
Redfern called attention to the recent fears raised by economists that the scheme could unbalance and distort the economy, which he said were well founded.
Redfern said fears of a fresh housing bubble were overblown, but he said: "Where I would agree with the concerns is if successive governments find it too difficult politically to exit Help to Buy – that's where there is a genuine hazard."
He added: "I think there needs to be thought given now to a sensibly managed withdrawal – even if the timing isn't firm, at least what the methodology is, because as we get closer to that date, it will start to figure more highly in the minds of banks and individual home-buyers. Everybody needs a sense of confidence about what the plan is."
The latest data from Hometrack, which is a highly regarded index shows prices rose across more than a third of Britain, the biggest upswing in 6 years according to the body. So few could question the positive effects, just let's hope that the government manages the exit from the incentive, which has already proven to be a problem during the course of this financial crisis.
- Wednesday 03 July 2013