George Osborne has recently announced plans to prop up the UK mortgage market with £12 billion of state guarantees. The ‘help to buy’ scheme that was announced at last month’s budget offers buyers two solutions. Both these options are designed to help make buying and building a house far more affordable for the majority of the UK population.
The question is, will it work?
MPs have expressed deep concern about the viability of the ‘help to buy’ scheme. Many of the MPs who have criticised the scheme seem to acknowledge that, in principle, the scheme is a good thing for the UK economy. After all, making mortgages and property more affordable for families and first time buyers should always be a primary concern when a country is coming out of an economic recession. However, the criticism for the scheme has been directed at Osborne himself for not supplying MPs with enough information and for not answering a number of their key questions.
After the ‘help to buy’ scheme was announced it was discussed by MPs and George Osborne was questioned on a number of the details. Following this debate, MPs were left with 19 ‘outstanding questions’ that they felt still needed answering. Among these were questions like, ‘will the scheme apply to those purchasing second homes?’
As is often the case, MPs were quick to make comparisons between this scheme and the other recently shelved government plans. The overall criticism? These schemes should be fully thought out and planned for before they are announced.
