Journo: 'Help to Buy' Is Misconceived Scheme that Doesn't Solve UK Housing Market Problems

Sputnik: First of all, can you tell me what "Help to Buy" is?

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Andrew Lockley: Help to Buy is a government scheme with two branches. One is shared ownership and the second one is the equity loan scheme, which is perhaps the more controversial of the two. And this involves the government basically giving people mortgage finance, essentially on very favourable terms to top up the mortgages that they can get from private sector providers in order to help them buy a home. Which sounds like a very noble thing. But the problem with that is, you've got to look at where the government's money could be used instead, and what the effect on the wider housing market of providing this additional funding into the housing market is doing to everyone else's house prices.

Sputnik: And in the report today it said that almost two-thirds of home buyers who used the Help to Buy scheme could have afforded a home without it. Is this a surprising outcome to you?

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Andrew Lockley: Well Help to Buy has a very significant number of problems. The narrow availability is one of the most significant issues. It basically helps people who were already fairly wealthy to become more wealthy in a market that has traditionally risen since the Second World War.

So the scheme as such isn't necessarily targeted to help the people who are most in need of government support. It generally goes to the kids of wealthy voters. And it's not really that surprising that in a country where the young and the poor are less proportionately likely to vote, that schemes that benefit wealthy families get voted in.

This is a very short term scheme that the government has introduced without proper consideration of its longer-term wider effects on the housing market.

Sputnik: Now you mentioned that this doesn't actually help a lot of people that require assistance to get on the housing market, what steps do you think should be taken to make that a more realistic goal for people in this country?

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Andrew Lockley: Well, that's a fascinating question. And that cuts really to the heart of the issue. The problem that we have in the UK is not so much a matter of too few homes, although there is a problem with on the building, as we've had a population increase in recent decades. But the central problem is that the built stock of houses that we've got is wrong for the needs we have. We have too many large family homes, and too few homes which are smaller, and designed for smaller households, often single person households, or for a rising number of people who wish to share homes.

And what we've seen in recent years is that the ageing population hasn't been matched with any kind of policy to help older people move en masse. There is some talk of reducing the stamp duty for people to trade down. What we need to do is to get ageing boomers out of their large family homes, to free those up for young families. That's the central problem we have in housing.

We also need to make sure that it is not difficult, or troublesome or full of red tape to convert larger family homes into house share accommodation. And the planning process has been severely restricted by many councils to make it harder and harder for landlords to invest in properties to convert them into house share accommodation. So what we've got in the country is a large number of houses which are too large of households and not designed for modern living. In my view, this is a fundamentally misconceived scheme that doesn't solve the problem.

The views expressed in this article are those of the speaker and do not necessarily reflect those of Sputnik.