How Help to Buy Helped To Fuel Property Bubble

The Chancellor declared at his Mansion House speech that the government’s Help to Buy scheme “is not fuelling house price inflation in London”. This statement demonstrates either political hyperbole or that the Chancellor needs to brush up on his basic economics, for it is just plain wrong. There is clear evidence that the Help to Buy scheme has played a role in fuelling the London property price bubble. The government’s defence of Help to Buy has been vigorous, spurred by the belief that this is a vote winner. Ministers assert that only 5% of Help to Buy mortgages have been in London (and account for less than 1pc of London mortgages). The average mortgage borrowed nationally under the scheme was £152,000, below both average house prices and the £600,000 limit of the scheme. The government is presenting this as evidence that Help to Buy does not equate to the increase in house prices either in London or in higher priced property brackets. Read more on the Daily Telegraph website.