CML leader in Help to Buy warning

Thu, 07 Nov 2013

CML leader in Help to Buy warning
The head of the Council of Mortgage Lenders (CML) has warned that the UK needs avoid becoming "addicted" to Help to Buy deals.

Nigel Terrington described the government initiative as a "short-term fix" and has warned that there needs to be an exit strategy for the home loan subsidy scheme.

Mr Terrington said: "It should be a time-limited intervention to correct what is seen by the government as a temporary failure in the market to provide high loan-to-value mortgages in quantity."

He added that Help to Buy should not be seen as a permanent feature and instead be approached as a temporary measure.

Since the scheme's second phase launch last month, critics have raised concerns that it could result in an inflated increase in house prices.

Unless more properties are made available to meet demand, it is feared that Help to Buy could directly lead to a housing bubble.

According to the Halifax, prices have risen by nearly seven per cent in the last year and 0.7 per cent within the last month.

Mr Terrington added that it was vital to find a balance between "short-term profitability" and "long-term sustainability".
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