Morning Call: pick of the papers

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

1. The worst thing the Tories can do is catch the Ukip bug (Guardian)

Eastleigh punished Cameron for not finishing his modernisation project, says Jonathan Freedland. Now Conservative voters have somewhere else to go.

2. The case of Brussels and banker bonuses (Financial Times)

Europe has found a way to attack the UK that is sure to be favoured by much of the British public, writes Martin Wolf.

3. Two fingers up, but government not down (Times) (£)

The Eastleigh result means Clegg can still work with Cameron, writes Matthew Parris. That’s more important than any UKIP protest vote.

4. I used to argue when people said 'all parties are all the same’. I don’t now (Daily Telegraph)

Voters are punishing politicians who have lost touch with normal human instincts, says Charles Moore.

5. We have a long way to go before our immigration system is fair and simple (Independent)

I support tough controls on immigration, but the government has focused on the wrong end of the stick, says Labour's shadow immigration minister Chris Bryant.

6. Can Cameron prove himself a winner? (Daily Telegraph)

A new path to prosperity is the only means by which the Prime Minister and the Chancellor can return the Tories to favour, says a Telegraph editorial.

7. The west babbles on, and Assad is the winner (Independent)

Talks in Rome did nothing to hide the fact Syria's people have been betrayed, says Robert Fisk.

8. Grotesque myth that Red Ed leads a 'one nation' party (Daily Mail)

This electoral snub proves the party’s complete disconnection from hard-pressed and striving voters in the south of England, says Simon Heffer.

9. Beware of misreading Eastleigh result (Financial Times)

The by-election is a political, not electoral, problem for David Cameron, writes Robert Shrimsley.

10. What Labour could learn from Hollywood (Guardian)

Persona is as important in politics as it is in the movies, writes Marina Hyde. If only Ed Miliband would dump Ed Balls and recast Alistair Darling.

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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.