This morning the government announced an extra £10bn would be used to revive the Help to Buy scheme. This will do nothing to increase the supply of housing, an issue we've looked at in detail recently, but could increase demand and so exacerbate the housing crisis it's targeting.
Sam Bowman, Executive Director of the Adam Smith Institute, decried the move saying:
"Reviving Help to Buy is like throwing petrol onto a bonfire. The property market is totally dysfunctional because supply is so tightly constrained by planning rules, and adding more demand without improving the supply of houses is just going to raise house prices and make homes more unaffordable for people who don't qualify for the Help to Buy subsidy.
"London has the second highest property prices per square metre in the world, only behind Monaco. New build houses are even smaller in the UK than in the Netherlands, despite being the most densely populated country in Europe. Only 2% of England is built on, but we're fenced in by NIMBYs and planning laws that block development nearly anywhere.
"To improve the housing market you need to change the rules of the game, so that damaged parts of the green belt can be built on, so we can have more dense and efficient development of existing urban areas, and so that locals benefit from new developments near them. Reviving Help to Buy is an astonishingly ill-judged move that may prove economically and politically disastrous for the government."
For further comment or to arrange an interview please contact Matt Kilcoyne on 07584778207 or email firstname.lastname@example.org.