The failure of Help to Buy 1: homes aren't being built where they're most needed

London is set to see the highest growth in households, but only around 5% of new builds were in this area.

Help to Buy Part 2 - the one where government guarantees mortgages to borrowers with a 5% deposit has attracted huge controversy, with experts going so far as to brand the policy "very dangerous". It’s too early to say whether it will, as some fear, lead to another housing bubble that the Bank of England may have to burst before it’s too late. But in the meantime, new figures revealed yesterday show the performance of Help to Buy 2’s less controversial older siblings, "NewBuy Guarantee Scheme" and "Help to Buy: Equity Loan Scheme", which provide government support for purchasers of new-build homes. Catchy titles.

The housing affordability problem is fundamentally driven by a lack of supply. As in all markets, when demand increases, but supply is constrained, prices tend to go up. And so the precursors of Help to Buy Part 2 seem, in contrast, relatively benign. Government uses funds to help people get on the housing ladder, but the funds are linked to the building of a new home. Supply increases with demand, limiting the risk of a housing bubble.

But yesterday’s figures suggest that these schemes are hardly ones to pin our hopes to, despite ministers' insistence that Help to Buy will encourage more house-building. So far, in six months, 5,375 properties have been bought with the support of the Help to Buy Equity Loan Scheme. 4,450 home purchases have been made with NewBuy since March 2012. In comparison, a range of projections suggest that we have a shortfall between the homes we need and the houses we are building of 100,000 to 150,000 homes a year.

What’s more, houses aren’t being built in the right areas. London is set to see the highest growth in households between now and 2021: almost a quarter of growth is set to come from this region. But only around 5% of the Help to Buy: Equity Loan Scheme loans for new builds were in this area.

Sources: DCLG, Household projections by district, England, 1991- 2021 Live Table 406; DCLG, Help to Buy: Equity Loan scheme and NewBuy statistics, released 21 November 2013.

We need much more radical policies to deliver the homes we need and these shouldn’t be limited by tying new builds into home ownership schemes. These schemes are unlikely to have done much damage so far, but they also have not come close to solving the problem. Demand for new housing, and the prices houses go for, are already high enough to encourage developers to build more. The problem is on the supply side: the planning system and the structure of the development market that’s stopping them from building the houses we need. The early Help to Buy schemes were always going to struggle make a significant dent into the housing shortfall whilst these problems remained unaddressed. Sadly, we’re in even less need of a Help to Buy Part 2. 

George Osborne speaks to construction workers at the Berkeley Homes Royal Arsenal Riverside development in Woolwich on March 21, 2013. Photograph: Getty Images.

Nida Broughton is Senior Economist at the Social Market Foundation.

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It's Gary Lineker 1, the Sun 0

The football hero has found himself at the heart of a Twitter storm over the refugee children debate.

The Mole wonders what sort of topsy-turvy universe we now live in where Gary Lineker is suddenly being called a “political activist” by a Conservative MP? Our favourite big-eared football pundit has found himself in a war of words with the Sun newspaper after wading into the controversy over the age of the refugee children granted entry into Britain from Calais.

Pictures published earlier this week in the right-wing press prompted speculation over the migrants' “true age”, and a Tory MP even went as far as suggesting that these children should have their age verified by dental X-rays. All of which leaves your poor Mole with a deeply furrowed brow. But luckily the British Dental Association was on hand to condemn the idea as unethical, inaccurate and inappropriate. Phew. Thank God for dentists.

Back to old Big Ears, sorry, Saint Gary, who on Wednesday tweeted his outrage over the Murdoch-owned newspaper’s scaremongering coverage of the story. He smacked down the ex-English Defence League leader, Tommy Robinson, in a single tweet, calling him a “racist idiot”, and went on to defend his right to express his opinions freely on his feed.

The Sun hit back in traditional form, calling for Lineker to be ousted from his job as host of the BBC’s Match of the Day. The headline they chose? “Out on his ears”, of course, referring to the sporting hero’s most notable assets. In the article, the tabloid lays into Lineker, branding him a “leftie luvvie” and “jug-eared”. The article attacked him for describing those querying the age of the young migrants as “hideously racist” and suggested he had breached BBC guidelines on impartiality.

All of which has prompted calls for a boycott of the Sun and an outpouring of support for Lineker on Twitter. His fellow football hero Stan Collymore waded in, tweeting that he was on “Team Lineker”. Leading the charge against the Murdoch-owned title was the close ally of Labour leader Jeremy Corbyn and former Channel 4 News economics editor, Paul Mason, who tweeted:

Lineker, who is not accustomed to finding himself at the centre of such highly politicised arguments on social media, responded with typical good humour, saying he had received a bit of a “spanking”.

All of which leaves the Mole with renewed respect for Lineker and an uncharacteristic desire to watch this weekend’s Match of the Day to see if any trace of his new activist persona might surface.


I'm a mole, innit.