Comment Plus: pick of the papers

The ten must-read pieces from the Sunday papers.

1. Nick Clegg sets the test which will make or break this coalition (Observer)

Clegg's political survival depends on whether this government can implement spending cuts without the savagery of the Eighties, says Andrew Rawnsley.

2. How everyone could win from the "cuts" (Sunday Telegraph)

Elsewhere, Janet Daley says that the cuts should be part of a fundamental reconstruction of the way public services are funded and delivered.

3. Cable on manoeuvres (News of the World)

Vince Cable wants to be seen as the unofficial leader of the anti-Tory resistance, writes Fraser Nelson.

4. Labour's lads fight to be twice as nice (Sunday Times)

The next Labour leader needs to learn that niceness is a weapon of war in politics, writes Martin Ivens.

5. We were wrong to allow so many eastern Europeans into Britain (Observer)

Ed Balls says that Britain was wrong not to impose transitional controls on migration from the new EU member states in 2004.

6. Obama and the oil: from "Yes, we can" to "No, we can't" (Independent on Sunday)

Barack Obama's helplessness in the face of the oil spill shows a grim pessimism is taking hold in the US, writes Rupert Cornwell.

7. In the midst of horror, be amazed at the goodness of the survivors (Observer)

The dignity and strength of the people of Cumbria shows just how far from a broken Britain we are, argues Henry Porter.

8. Cameron's "Manny State" can wean us off big government (Sunday Telegraph)

Elsewhere, Matthew d'Ancona says that David Cameron's measured response to the Cumbria shootings proves how determined he is to end our reliance on the state.

9. The deadly closing of the Israeli mind (Independent on Sunday)

The international condemnation of Israel's assault on the Gaza flotilla will not prompt the country's leaders to think again, writes Ilan Pappé.

10. Fair pay can't be defined, but still the snoops are after our wallets (Sunday Times)

The publication of private-sector pay would be a dangerous attack on privacy and freedom, says Minette Marrin.

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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.