Interest-free loans to cover deposits, so more people can get mortgages, is the wrong choice by the Chancellor for the country’s economy.
As the National Housing Federation said yesterday (20th March), investing £3.5 billion this will cost in cheap housing could deliver up to 175,000 homes.
Private sector completions have stayed fairly consistent over a long period, albeit with a small dip last year, so the market has found its level. But completions of low cost or social housing (the term “affordable” is pretty meaningless!) are almost non-existent.
Spending huge amounts to help people get mortgages – putting more of our money into the banks’ coffers – will stimulate demand, without increasing supply: so house prices are likely to go up, which does not help the economy.
An active construction industry is good for the economy as a whole, as money spent on materials, direct labour, contractors and services spins off and multiplies in the economy as whole. And we all know a lot more low cost housing is needed.
It is not rocket science: if there are billions of pounds available for the housing sector, the right choice would have been to build more housing!