Shared equity scheme will only benefit the few
The Chancellor, Gordon Brown, recently
announced a shared ownership scheme to help first-time buyers
into the property market. Purchasers would be able to raise a mortgage
on only a proportion of their home, the remainder being shared by the
government and the bank or building society.
Although it will only affect around 20,000 house buyers per year, some
see it as a sign that the government are terrified of a house price
bust and are desperately trying to shore up the bottom end of the
housing market.
There has been a shortage of
first-time buyers for years but buy-to-let
investors have filled the void. Recently, however, they have stopped
buying due to the saturation of the rental market and homes being
generally overpriced.
The Chancellor, who promised an end to boom and bust, knows that the
housing market is a major factor driving the economy at the moment. But
many observers think it’s irresponsible to use taxpayers' money
to encourage first-time buyers to take on huge debts at the peak of the
housing boom.
With the Land
Registry reporting falling house prices throughout the UK, some
fear that the scheme may keep house prices artificially high for
longer, making the crash worse when it does come. 16th June
2005
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