View more on these topics

Adam Smith Institute calls for Govt to scrap Help to Buy

Douglas-Cherry-MM-Grey-250x255.jpg

The Government should scrap its Help to Buy scheme and instead focus on ideas to improve supply such as abolishing affordable housing quotas and releasing more farmland for development, according to the Adam Smith Institute. 

The Government’s Help to Buy scheme began operating earlier this year and is due to be extended in January with a £130bn mortgage indemnity scheme for new and existing houses where the Government guarantees up to 15 per cent of the purchase price, with the borrower putting down a deposit of between 5 and 15 per cent.

There has been growing concern from economists that the scheme could create a new housing bubble, with not enough being done to increase housing supply. The Government says the loosing of planning legislation and efforts to build more affordable housing will help push up supply as Help to Buy increases demand.

In a briefing paper published this week, the free-market think tank ASI attacks the Government for not taking up more radical ideas to address supply side constraints such as releasing limited amounts of farm land and abolishing mandatory affordable housing quotas.

It says: “What such solutions have in common is that the obstacles to their implementation are political and regulatory, not economic.

“Viewed thus, Government is not the solution to the housing crisis: Government is the housing crisis. With credit as inexpensive as it is today, injecting additional credit which is still less expensive does not seem a prudent or particularly effective long-term solution.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. David Cowell, Myddleton Croft 29th August 2013 at 2:00 pm

    It’s everything the Institute says it is but they are confusing economic reasons with political motives. Thinking politically, it makes a great deal of sense to stoke up the ‘feel-good factor’ prior to a general election.

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com