Morning Call: pick of the papers

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

1. The coalition gives Clegg a veto on arming Syria (Independent)

The greatest vindication of the Lib Dem leader's decision to take his party into government may still be to come, says Mary Dejevsky.

2. Borrowing for homes and roads would be popular (Times)

George Osborne is in no position to give lectures on borrowing, writes Mark Ferguson.

3. What's holding Britain down isn't benefits. It's low pay (Guardian)

Our brand of capitalism has become cannibalistic, writes Zoe Williams. The minimum wage isn't enough, and has become a profound drag on our economy.

4. Ashcroft and the Tories should part company (Daily Telegraph)

The Conservative peer's vicious and damaging public criticisms of the PM have gone too far, says Peter Oborne.

5. Stephen Hester's departure is a huge gamble, and one I fear will backfire (Daily Mail)

Changing the captain at this stage could be a huge error and, in the end, actually slow repair and recovery, writes Alex Brummer.

6. Ahmadinejad: we’ll miss him when he’s gone (Daily Telegraph)

Iran’s president was the bogeyman the west loved to hate, writes Richard Spencer. But his successor will be much tougher to deal with.

7. Big data has to show it’s not Big Brother (Financial Times)

We do not know yet what this new technology of data analysis and artificial intelligence means, writes John Gapper.

8. Europe must condemn Erdoğan, but without hubris or illusions (Guardian)

Europe should support those who stand up for our shared values, but don't expect miracles from Turkish democracy, writes Timothy Garton Ash.

9. Do you mind being snooped on? Take a test (Times)

Whatever your view, we all need to trust those who act in our names and the laws governing their activities, says David Aaronovitch.

10. NSA surveillance: who watches the watchers? (Guardian)

It's not the widening of state intrusion that's wrong, but the weakening of the safeguards that should be there to protect us, says Paddy Ashdown.

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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.