George Osborne stated that he has not seen the evidence that his controversial Help to Buy scheme is causing a rise in housing prices.
He made this announcement to MPs on the Treasury Select Committee, despite Nationwide and Halifax’s market research indicating that it is.
Three quarters of the Help to Buy homes bought are outside of the London hotspots for rising prices, according to Osborne, and that the average property value bought through the scheme is below average.
Nationwide apparently reported that the average price of homes rose by 9.2% since this time last year. There are fears that the Help to Buy will inflate another housing bubble. The flow of credit in the mortgage market is increasing, but while the base rate is low, so when this rises more people will be affected by the rise in the rate of their variable rate mortgages .
David Cameron has written that he is “delighted to see that over 17,000 people have taken up our equity loan and mortgage guarantee schemes and own a home, including 226 people in Birmingham and Solihull,” showing that the schemes are in fact asking a difference to many people.
Help to Buy continues to divide, with many people and experts thinking it is risky and could see the economy back at the low it was in just a few years ago, and the government insisting that everything is fine and that we shouldn’t worry.