Industry News

Help To Buy Scheme Will Make Things Worse!!!

The Bank Of England warned that the governments extensive roll out of their help to buy scheme could lead to another housing bubble, similar to the one that contributed to the 2008/09 economic crash.

It would now seem that this warning should have been taken more seriously by the government as since its introduction, house prices have risen sharply back towards where they spiked before the 2008 crash.

This further rise in house prices will in the long term make it even harder for first time buyers, with real wages being compressed by competition for jobs and a growing population. The government advised that the scheme would be rolled out in a controlled manner to prevent such a surge in house prices, however this has so far been proven as false.

It seriously conflicts recent data gathered by the Halifax last month, showing that house prices had already risen 7% since the new schemes launch.

The sole purpose of the help to buy scheme was to make it easier for first time buyers to get onto the property ladder, however with the average age of the first time now past 40, these appear to be desperate times for a desperate government, trying to give people the opportunities they once had.

It further shows that no matter what the government does, it cant take control over the natural economic force of supply and demand.

From a common sense perspective, the answer is really quite simple. A larger supply of property, suitable for families will in turn lower house prices overall.

The cost of homes at the lower end of the market are being pulled higher as one needs to achieve a higher asking price to make the much needed jump to the next tier of the property ladder, usually for new or growing families. Of course with a growing population as well, this is putting even further strain on resources not just at the housing level, but across all public services as well.

The price gap between the low and high end of the housing market is much larger than in the past and this needs to be massively narrowed to help us improve the cost of living.

Even if the government admitted that the only way out of the cost of living crisis is to build more homes, they don’t have the money or resources to achieve it, not to mention that these newly built areas will need the necessary increase in public service investment aswell.

In the meantime, there has never been a better time to start a letting agency as rents continue to rise, making it even more difficult for people to save up that much needed house deposit.

It certainly looks like the private lettings market is the future as the balance of the countries wealth shifts further and further away from the mainstream working class population, with no sight of it shifting back again anytime soon, if ever.

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