Morning Call: pick of the papers

The ten must-read comment pieces from this morning's papers.

1. Cameron’s demolition job risks tearing the country from its past (Daily Telegraph)

Whichever is the more conservative party is likely to win the next election – and right now that looks like Labour, writes Mary Riddell.

2. An unhappy marriage: union influence may cost Labour election chances (Independent)

By threatening more strikes union leaders prove they have not adjusted to poorer times - and their selfishness will only push voters away, says Steve Richards.

3. Democracy loses in struggle to save euro (Financial Times)

The sight of the German representative on the ECB being isolated and outvoted was chilling, says Gideon Rachman.

4. Why the whiff of success clings to Brand Boris (Times) (£)

David Cameron must rediscover the qualities that won him the leadership to see off the Mayor’s challenge, says Rachel Sylvester.

5. The universal credit programme is on course for disaster (Guardian)

Iain Duncan Smith's plan to streamline our benefits system is practically unachievable, says Frank Field.

6. Tories may regret their disdain of Romney (Financial Times)

It is folly to have such poor relations with a party that could soon hold the world’s mightiest office, argues Janan Ganesh.

7. Alzheimer's could be the most catastrophic impact of junk food (Guardian)

There is evidence that poor diet is one cause of Alzheimer's, writes George Monbiot. If ever there was a case for the precautionary principle, this is it.

8. Europe's Dutch barometer (Independent)

Holland’s fragmented politics have become more divided than ever, says an Independent leader.

9. Conservative party: cheers, fears and falling ratings (Guardian)

Mr Johnson may be the Tories' prince over the water now, but golden summers and victory parades do not last for ever, says a Guardian editorial.

10. Black Wednesday: The day that Britain went over the edge (Daily Telegraph)

Black Wednesday was a fateful moment that changed our country – and shaped a future prime minister, writes Philip Johnston.

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I was wrong about Help to Buy - but I'm still glad it's gone

As a mortgage journalist in 2013, I was deeply sceptical of the guarantee scheme. 

If you just read the headlines about Help to Buy, you could be under the impression that Theresa May has just axed an important scheme for first-time buyers. If you're on the left, you might conclude that she is on a mission to make life worse for ordinary working people. If you just enjoy blue-on-blue action, it's a swipe at the Chancellor she sacked, George Osborne.

Except it's none of those things. Help to Buy mortgage guarantee scheme is a policy that actually worked pretty well - despite the concerns of financial journalists including me - and has served its purpose.

When Osborne first announced Help to Buy in 2013, it was controversial. Mortgage journalists, such as I was at the time, were still mopping up news from the financial crisis. We were still writing up reports about the toxic loan books that had brought the banks crashing down. The idea of the Government promising to bail out mortgage borrowers seemed the height of recklessness.

But the Government always intended Help to Buy mortgage guarantee to act as a stimulus, not a long-term solution. From the beginning, it had an end date - 31 December 2016. The idea was to encourage big banks to start lending again.

So far, the record of Help to Buy has been pretty good. A first-time buyer in 2013 with a 5 per cent deposit had 56 mortgage products to choose from - not much when you consider some of those products would have been ridiculously expensive or would come with many strings attached. By 2016, according to Moneyfacts, first-time buyers had 271 products to choose from, nearly a five-fold increase

Over the same period, financial regulators have introduced much tougher mortgage affordability rules. First-time buyers can be expected to be interrogated about their income, their little luxuries and how they would cope if interest rates rose (contrary to our expectations in 2013, the Bank of England base rate has actually fallen). 

A criticism that still rings true, however, is that the mortgage guarantee scheme only helps boost demand for properties, while doing nothing about the lack of housing supply. Unlike its sister scheme, the Help to Buy equity loan scheme, there is no incentive for property companies to build more homes. According to FullFact, there were just 112,000 homes being built in England and Wales in 2010. By 2015, that had increased, but only to a mere 149,000.

This lack of supply helps to prop up house prices - one of the factors making it so difficult to get on the housing ladder in the first place. In July, the average house price in England was £233,000. This means a first-time buyer with a 5 per cent deposit of £11,650 would still need to be earning nearly £50,000 to meet most mortgage affordability criteria. In other words, the Help to Buy mortgage guarantee is targeted squarely at the middle class.

The Government plans to maintain the Help to Buy equity loan scheme, which is restricted to new builds, and the Help to Buy ISA, which rewards savers at a time of low interest rates. As for Help to Buy mortgage guarantee, the scheme may be dead, but so long as high street banks are offering 95 per cent mortgages, its effects are still with us.