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Comment: We’re building a house of cards

Emphasis on subsidised mortgages just exacerbates availability issues

Edwards-Dave-Personal-Touch-2017The Government has announced an extra £10bn of funding for the Help to Buy scheme in a desperate bid to kickstart the market.

Introduced in 2013, the programme has already helped more than 200,000 property aspirants to secure a mortgage. The Government is confident the latest round of spending will enable another 135,000 people to follow suit by 2021.

However, many experts are concerned an emphasis on subsidised mortgages merely exacerbates availability issues and worsens market conditions. So, what are we to make of Help to Buy?

UK house prices have risen by an average of £10,000 over the past 12 months and are continuing to grow modestly. The principal reason for this is the severe and ongoing shortage of properties.

Political uncertainty, historically low levels of housebuilding and the stifling impact of duty tax increases upon pensioners refusing to downsize are just some of the reasons for this continuing malaise. But, according to the Adam Smith Institute, Help to Buy is entrenching market difficulties by stimulating unrealistically high demand, thereby raising house prices beyond reasonable affordability.

Within this context, price growth represents a symptom of market decay as opposed to the badly needed green shoots of recovery.

As wages struggle to keep pace with inflation and rising interest rates push the price of a mortgage beyond the reach of more people, fewer borrowers will be able to afford new homes even if the Government manages to greatly increase availability.

Help to Buy does little more than paper over the cracks at the heart of our social and economic institutions. Low property stock will inevitably lead to higher prices, while low wages and high inflation and interest levels will further reduce affordability.

If we really want to pre-empt a catastrophic housing crisis and the paralysis of profitability within the property industry for years to come, we need a greater commitment to build both new homes and a better standard of living.

Dave Edwards is commercial director at Personal Touch



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For a job as big as managing the auto-enrolment changes, it’s important to know what has been completed and what still lies in front of you to give you the reassurance that everything is in hand. Getting the planning and project management right at the outset can help you see the path ahead and ensure everyone knows their roles and responsibilities. To help with this, Johnson Fleming has produced a checklist outlining every step that needs to be taken when preparing for auto-enrolment.


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