Member Article

Help to Buy critics need to suggest alternative

A leading North East property expert has challenged critics of the government’s flagship Help to Buy scheme to come up with a better plan for solving Britain’s housing crisis.

Business Secretary Vince Cable MP this week became the latest high profile figure to voice concerns about the policy – which offers loans of up to 20% to buyers of new homes and helps people purchase properties with deposits as low as 5% – warning it could provoke “a new housing bubble”.

Although Help to Buy was this week hailed by house-builder Taylor Wimpey for kick-starting a 24% rise in new home ordersand making the housing market “more confident”, Dr Cable joins a list of prominent figures to publically criticise the policy, including outgoing Bank of England Governor Sir Mervyn King and former Chancellor Alistair Darling.

Ajay Jagota of KIS Lettings, however, believes the recent rise in Britain’s GDP, increased output in the construction industry and other builders such as Bellway aslo reporting rising sales suggests Help to Buy is already proving it’s worth.

Ajay, who manages properties for 700 landlords from branches in South Shields, Sunderland, North Shields and Welwyn Garden City , said:

“There’s no denying that Help to Buy contains an element of risk and of course no-one wants to out of control property prices and interest rates, least of all landlords – but the value of any investment may go down as well as up. Nothing is truer in property and nothing will ever change that.

“The fact is Britain needs at least 200,000 new homes every year. So to those criticising of Help to Buy I have just one question. What’s your alternative?

“We live in a free market where the primary role of government when it comes to house building is giving private sector builders the confidence to build – and right now there is every indication that Help to Buy has done exactly that.

“Doing nothing is not an option. Expecting the government to personally pick up to tab for building hundreds of thousands of new homes is not a viable or realistic option. If you ask me, Help to Buy is the only game in town.

“With the government’s financial exposure pretty minimal, I believe if lenders lend sensibly – which given their recent reticence to lend at all seems fairy likely – and common sense steps are taken to ensure things do not get out of control, current criticisms of Help to Buy should prove massively exaggerated, while the benefits speak for themselves.”

This was posted in Bdaily's Members' News section by Ajay Jagota .