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Britain’s Help to Buy mortgages rising, but EC asks UK to rein in scheme

On the surface, the British government’s Help to Buy scheme may appear not to make a dent on the country’s homelessness problem. Since the second phase was introduced in October 2013, only 7,300 people have taken in up equivalent to GBP £1 billion (USD $1.67 billion).

That’s not even a drop in the bucket for a nation with 63 million people.

However, records would show that the number of Help to Buy mortgages are going up rapidly every month that the European Commission (EC) asked Chancellor George Osborne to rein in his flagship. At the same time, the EC sought an increase in the council tax to prevent house prices from going up and out of control, especially in London.

The EC noted in its report that “At the moment, increasing property values are not translated into higher property taxes and the property value roll has not been updated since 1991 and taxes on higher value property are lower than on lower value property in relative terms due to the regressivity of the current rates and bands within the council tax system.”

Economists have warned Osborne that the scheme could result to a housing bubble.

PressTV pointed out that the scheme goes beyond the amount of money involved, but the message it is sending – that the British government supports the current housing market even if it is considered unaffordable to millions.

However, it pushed the government to go beyond providing Brits the ability to borrow but to increase the supply of new homes by easing planning restrictions, providing incentives that would convert dying high streets into houses and placing restriction on time that developers could sit on acres of unutilised land.

Providing homes need not involve so much new construction since homes for more than a million people are not occupied, especially in London which are investment properties owned by foreigners. PressTV urged the government to encourage their owners to sell or subsidise new builds.


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