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Government schemes 'push up house prices', warns Shelter


09-03-2016

 

Charity criticises focus on Help to Buy at expense of failure to build housing stock

Government schemes 'push up house prices', warns Shelter

Government schemes designed to make it easier for people to buy houses are pushing up property houses, Shelter says.

Property Investor reports today that the housing charity has "slammed" the government for getting its priorities wrong.

Help to Buy, the Lifetime Isa and other incentives have come at the expense of creating badly-needed new stock, including affordable housing, it says, and by heightening demand, the government has added to the "supply-demand imbalance", the charity argues.

Pete Jefferys, the senior policy officer for Shelter, said: "Too much taxpayer money is going into schemes that risk pushing house prices up even further out of reach for ordinary families instead of getting new homes built.

"Rather than repeat the mistakes of the past and prop up a market which hasn't delivered, this government has the chance to face things head on and put in place measures that will not only stimulate housebuilding, but boost the economy as well.

"We're confident that the new government could achieve their targets and give hope back to the millions struggling day in, day out with sky-high housing costs, but there has to be significant reform of the house-building market to focus on actually building the homes we need to make this happen."

The amount of property on the market remains at close to 30-year lows, Rob Gardner of Nationwide told The Guardian this week, and surveyors are reporting that instructions to sell have declined recently.

According to the building society, the average cost of a UK home rose in August, increasing 0.6 per cent to 206,245.

Gardner said a reduction in supply was the best explanation for the rise in prices, which seems at odds with the news that fewer mortgages were approved during the same period.

The Daily Telegraph also reported that Help to Buy has boosted the profits of major housebuilders, with one company, Persimmon, enjoying a pre-tax profit rise of 29 per cent over the past two quarters. Half of its buyers use the scheme.

www.theweek.co.uk

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