Financial experts question Help to buy claims
The independent body that scrutinises public spending has questioned whether the initiatives announced in last week’s Budget will increase house building.
Giving evidence to the Treasury select committee yesterday, senior figures from the Office for Budget Responsibility said the £3.5 billion ‘Help to buy’ scheme would drive up house prices but have a limited impact on development.
Chancellor George Osborne last week said the measure – which extends existing shared equity and mortgage guarantee schemes – was a ‘dramatic intervention to get the housing market moving’.
But yesterday Steve Nickell, one of three members of the committee that leads the OBR, suggested it would boost prices without driving house building.
‘The key issue is, is it going to just drive up house prices?’ he said. ‘By and large, in the short run, the answer to that is yes. But in the medium term, will the increased house prices stimulate more house building? Our general answer would probably be a bit, but the historical evidence suggests probably not much.’
Responding to Mr Nickell’s comments, shadow housing minister Jack Dromey said: ‘The Budget represented a huge missed opportunity to get Britain building – we should be helping first time buyers and people who find themselves shut out of the housing market.’
