Labour challenges Cameron's Help to Buy boasts with call for more housebuilding

While the PM hails figures showing 750 homes have already been bought under the scheme, Labour remains focused on increasing building from its post-war low.

While it's hard to find an economist with a good word to say about Help to Buy, the Tories are convinced that the policy is political gold. Three months after the launch of the mortgage guarantee scheme, David Cameron is hailing new figures showing that 750 homes have been bought with state assistance (so much for not 'intervening' in markets) and that 6,000 people, or 100 a day, have made offers on properties. 

The Tories are particularly keen to draw attention to figures showing that, contrary to what some predicted, more than 80% of applicants are first-time buyers and three-quarters live outside London and the south east. On average, households are seeking to buy homes worth £160,000, below the average UK house price of £247,000. Cameron says: "The New Year is often a time when people look to make those big life-changing decisions like moving home or taking that first step on the housing ladder. But too many people have found themselves frozen out of the market in recent years as a result of the size of the deposit required.

"That is why as part of our long-term economic plan we introduced the Help to Buy scheme, so hardworking people with sufficient earnings can get on, fulfil their aspirations and enjoy the security of owning their own home. In less than three months, the scheme has already helped thousands of people. I want to see that continue in 2014 and for Help to Buy to help thousands more realise their dream of home ownership."

In an attempt to emulate Margaret Thatcher, who was memorably photographed handing over the keys to those who bought their council homes under Right to Buy, Cameron has asked staff to ensure that he meet couples benefiting from the policy whenever he makes a regional visit (he will be in Southampton today). 

For Labour, Help to Buy represents a political challenge. Those who benefit from the scheme will naturally be grateful to the government, while others who do not, or who lose out through price inflation (one of the ill-disguised aims of the policy), may not necessarily blame the coalition. But by warning that only more housebuilding will bring prices under control, and that the government is failing to build enough, Labour can offer a distinctive message. Shadow housing minister Emma Reynolds said in response to Cameron: "Any help for first time buyers struggling to get on the property ladder is to be welcomed. But rising demand for housing must be matched with rising supply if this scheme is to bring the cost of housing within the reach of low and middle income earners.

"Instead under this government housebuilding is at its lowest level since the 1920s. You can't deal with the cost-of-living crisis without building more homes. That's why Labour has committed to building 200,000 homes a year by 2020."

On this point, Labour is at one with economists, who argue in the FT's annual survey that more building is the best way to restrain an incipient housing bubble. Charles Davis of the Centre for Economics and Business Research says: "The simple, crucial fact is that there remains a massive, basic discrepancy between the demand and new supply of homes in the UK. Until that is solved there is likely to be a real appreciation of bricks and mortar, especially while monetary policy is still as loose as it is."

John Llewellyn of Llewellyn Consulting says: "The best way to restrain the housing market is to allow more houses to be built. That implies releasing land; and building better transport infrastructure so that people can commute within their one to one-and-a-half hour travel-time budgets." And Andrew Simms of the New Economics Foundation says: "Increasing the supply of housing will go some way to reducing price inflation and that can be done in a number of ways: properly promote new, low-cost, energy-efficient house building, renovate unfit housing stock and compel many of the estimated 900,000 plus empty homes in the UK to be brought back into the market."

Ministers' response is to point to figures suggesting that greater demand is stimulating greater supply. In the 12 months to September 2013, annual housing starts totalled 117,110, up by 16% compared to the year before (although annual housing completions fell by 8% to just 107,950). But this remains progress from a very low base. Unless the rate of building increases dramatically, Labour will still be able to warn that Help to Buy is not addressing the greatest problems in housing and continue to flesh out its plan to do so. 

David Cameron meets first time buyers Kayleigh Groom and Chris Day, as he visits a housing estate in Weston Favell. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Donald Trump vs Barack Obama: How the inauguration speeches compared

We compared the two presidents on trade, foreign affairs and climate change – so you (really, really) don't have to.

After watching Donald Trump's inaugural address, what better way to get rid of the last few dregs of hope than by comparing what he said with Barack Obama's address from 2009? 

Both thanked the previous President, with Trump calling the Obamas "magnificent", and pledged to reform Washington, but the comparison ended there. 

Here is what each of them said: 

On American jobs

Obama:

The state of our economy calls for action, bold and swift.  And we will act, not only to create new jobs, but to lay a new foundation for growth.  We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together.  We'll restore science to its rightful place, and wield technology's wonders to raise health care's quality and lower its cost.  We will harness the sun and the winds and the soil to fuel our cars and run our factories.  And we will transform our schools and colleges and universities to meet the demands of a new age.

Trump:

For many decades we've enriched foreign industry at the expense of American industry, subsidized the armies of other countries while allowing for the very sad depletion of our military.

One by one, the factories shuttered and left our shores with not even a thought about the millions and millions of American workers that were left behind.

Obama had a plan for growth. Trump just blames the rest of the world...

On global warming

Obama:

With old friends and former foes, we'll work tirelessly to lessen the nuclear threat, and roll back the specter of a warming planet.

Trump:

On the Middle East:

Obama:

To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect. To those leaders around the globe who seek to sow conflict, or blame their society's ills on the West, know that your people will judge you on what you can build, not what you destroy. 

Trump:

We will re-enforce old alliances and form new ones and unite the civilized world against radical Islamic terrorism, which we will eradicate completely from the face of the earth.

On “greatness”

Obama:

In reaffirming the greatness of our nation we understand that greatness is never a given. It must be earned.

Trump:

America will start winning again, winning like never before.

 

On trade

Obama:

This is the journey we continue today.  We remain the most prosperous, powerful nation on Earth.  Our workers are no less productive than when this crisis began.  Our minds are no less inventive, our goods and services no less needed than they were last week, or last month, or last year.  Our capacity remains undiminished.  

Trump:

We must protect our borders from the ravages of other countries making our product, stealing our companies and destroying our jobs.

Protection will lead to great prosperity and strength. I will fight for you with every breath in my body, and I will never ever let you down.

Stephanie Boland is digital assistant at the New Statesman. She tweets at @stephanieboland