You are here: Home - Mortgages - First Time Buyer - News -

Vince Cable calls for Help to Buy rethink

Written by:
Business secretary Vince Cable has called on his own government to consider whether the second stage of the Help to Buy scheme should go ahead.

Recent figures released by the Halifax said the first part of Help to Buy, the equity loan, and the Funding for Lending Scheme had already sparked the biggest rise in house prices since 2010.

Figures like this have led Cable to suggest the government rethink whether it wants the second phase of the scheme to go ahead.

“The controversy is over the second part of the scheme, which is a guarantee scheme that does not take effect until the new year,” he told Sky News.

“Obviously the government is going to have to look at that in the light of the way the market is developing.”

The Liberal Democrat was then questioned whether the second half of the scheme should be cancelled or altered and said: “We should certainly think about how it should come into effect, whether indeed it should come into effect, in the light of changing market conditions.

“We don’t want a new housing bubble.”

Cable joins former Bank of England governor Mervyn King, the IMF and the Adam Smith Institute as critics of the scheme.

Earlier this week Chancellor George Osborne issued a vigorous defence of Help to Buy, one of his flagship policies.

He said high LTV mortgages were not ‘exotic weapons of financial mass destruction’ and that government intervention was still needed.

However, Cable said there were now large parts of the country which had no need for a mortgage guarantee scheme and that its implementation could cause prices to spike.

“There are people out there, the Royal Institute of Chartered Surveyors yesterday were warning this was a real risk. I think in many parts of the country it clearly isn’t a problem.

“If you are in Northern Ireland or Wales or indeed the East Midlands you would wonder what all this is about. But certainly in London and the south east, in the north east of Scotland, in other areas, there are serious housing inflationary pressures.”

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week