Extract from an article by Bert Provan
The Government’s pledge to extend the “Help to Buy” programme is a further mistaken investment in a policy which has had little impact on extending home ownership to lower income households, explains Bert Provan. So, the £2bn investment in “social and affordable housing” is, while welcome, wholly inadequate to meet the pressing and increasing need for low cost rented housing for households in most need.
The wish to stimulate “low cost home ownership” is a policy goal which has remarkable appeal to governments in both emerging and advanced economies. While the first such scheme could be said to date from 1769 in response to the devastation of the Seven Years War, a more contemporary assessment in 2011 by the IMF indicates that subsidies and incentives – through tax breaks, preferential loans, or other guarantees – are common in over half the countries surveyed. And the 1982 Thatcher “Right to Buy” legislation has seen over 2 million properties sold to sitting tenants (although over 40% were subsequently sold on to become private rented properties).
Since the 1990s cross-party English housing policies have included some form of commitments to help “first time buyers” to get onto the property ladder. These policies include both subsidising the construction costs of homes for targeted sale to first time buyers, mortgages with subsidised rates or lower deposit requirements, subsidised savings schemes, and “shared ownership” programmes which let these buyers initially buy half the house (or less), then increase their equity at a later date (renting the rest in the meantime)..(continues)
SOURCE: Bert Provan, “How ‘Help to Buy’ helps mainly the privileged”, British Politics & Policy at LSE, 23 October 2017
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