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Morning Call: pick of the papers

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

1. This is no recovery, this is a bubble – and it will burst (Guardian)

With policymakers unwilling to introduce tough regulation, we're heading for trouble, says Ha-Joon Chang. 

2. A battle over Ukraine can be avoided (Financial Times)

To stop the country being torn apart its fate must be decided by the Ukrainian people, writes Gideon Rachman. 

3. Mrs Merkel can’t give Cameron what he needs (Times)

Germany’s Chancellor lacks the political freedom to agree the kind of renegotiation Tory Eurosceptics hunger for, says Rachel Sylvester.

4. Why are Eurosceptics still so gloomy? (Independent)

Those who insisted Britain must not join the euro have achieved all that they wanted, writes Steve Richards.

5.  David Cameron’s election gamble could electrify British politics (Daily Telegraph)

A "no deals" promise would be a rallying cry to the right, says Benedict Brogan. 

6. Dear Rebecca Adlington, they're the ugly ones (Guardian)

This is my message to the best British swimmer of her generation, writes Laurie Penny. If you've had a "nose shrink", it's OK. I've got your back.

7. Cameron must not dampen this Eurosceptic momentum (Guardian)

 If Alternative für Deutschland wants to join the Tories in Europe, it should be allowed to, no matter what Merkel thinks, says Paul Goodman. 

8. We misjudge Merkel’s vim for EU reform (Financial Times)

The real error is to overrate her capacity to deliver change, even if she wanted it, says Janan Ganesh. 

9. Salmond has to answer some serious questions (Daily Telegraph)

Scotland's First Minister is uncomfortable confronting certain policy areas, but they need to be addressed, says a Telegraph editorial. 

10. Piers Morgan did gun control more harm than good (Times)

In the US, weapons co-exist with a peacefulness that puts Britain to shame, says Justin Webb. 

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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.