Morning Call: pick of the papers

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

1. Housing crisis is the scandal of our age (Daily Telegraph)

Rents must be brought down and investment shifted from welfare into building the homes that Britain needs so desperately, says Mary Riddell.

2. Out of Europe, Britain faces a weak future (Financial Times)

If the prime minister is to call a referendum, the only real choice is between being fully in or out altogether, says Jonathan Powell.

3. A betrayal of principle on same-sex marriage (Independent)

Cameron talked big; what he delivered is a cobbling together of compromise and cowardice of which he should be ashamed, says an Independent leader.

4. Culture wars are an unwelcome American import (Daily Telegraph)

By supporting gay marriage, David Cameron risks sowing division where none previously existed, argues a Telegraph editorial.

5. This lily-livered marriage bill must make room for all of us (Guardian)

Gay people are still being denied marriage, while straight people are deserting it in droves, writes Gaby Hinsliff. The institution itself is a mess.

6. Who should we back in this Sunni-Shia war? (Times) (£)

Syria is not a struggle between tyranny and freedom but a fight for dominance between two visions of Islam, writes Paddy Ashdown. 

7. Japan should scare the eurozone (Financial Times)

Japan’s two consecutive lost decades are precisely what Europe should not want to emulate, writes Sebastian Mallaby.

8. Northern Ireland is not at a crossroads it's stuck on a roundabout (Guardian)

The recurring violence of a minority in Northern Ireland reflects a wider lack of faith in its politics, says Peter Shirlow.

9. The rioters shouldn’t worry – Ulster is safe (Daily Telegraph)

As the census shows, a united Ireland has become an outdated nationalist fantasy, argues Ruth Dudley Edwards.

 

 

10. Sorry Mr Cameron, Television debates are not optional (Independent)

The PM's bid to weedle out of pre-election live debates in 2015 makes a handsome Christmas gift to Ed Miliband, says Matthew Norman.

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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.