European Commission urges UK to adjust Help to Buy scheme
The recommendations, based on “detailed analysis” of the UK’s economic system, are intended to help boost growth, increase competitiveness and create jobs in the coming year.
The European Commission said the UK should respond to rapidly rising property prices, particularly in London, by adjusting the Help to Buy programme and reducing the risk of people falling deeper into debt to buy homes.
The Commission also said the UK should reconsider how property is taxed.
It called the current Council Tax system “regressive”, meaning a greater tax burden falls on those least able to pay it, and suggested adjustments in the band and rates within the system to shift the balance.
Further efforts to increase the supply of housing were also recommended.
The Commission has today issued wide-ranging recommendations to all EU countries.
European Commission President José Manuel Barroso said: “This is about helping Member States firmly out of crisis and back to growth, with the country-specific recommendations acting as a compass showing the direction.
“If politicians show leadership and summon the political will to see reform through – even though it is unpopular – we can deliver a stronger recovery and a better standard of living for everyone.”
Other recommendations for the UK include broadening the tax base, ensuring that welfare reforms deliver adequate benefits with “clear work incentives and support services” and improving in the affordability of childcare.