The more I hear about this government’s NewBuy housing scheme to subsidise housebuying the more clear it is just how far this Conservative government has strayed from its core values.
On the one hand the conservatives have legislated and used the FSA to stop banks lending at high loan-to-value, the prime cause of the subprime boom. Meanwhile, on the other they then replace that with a cashpayer handout to achieve the same high leverage. It would be comical if it wasn’t so depressing.
There is a good reason for demanding a 10% deposit. It acts as a cushion should house prices fall – which is more than possible given the amount of uncertainty in the world economy.
Repossession and negative equity favour neither the owner or the lender, which in this case includes you and I, whether you like it or not.
Most important of all, the media plays along with the official line that this is somehow designed to help housebuyers get on the housing ladder. Clearly that is nonsense. Allowing house prices to fall naturally would help new buyers far more than these handouts.
The Newbuy housing scheme is another desperate scheme designed to put taxpayer money in the hands of the house-builders, and to prop up the house value of existing house-owners.
True liberal, free market-conservatives continue to be betrayed by this government. What will they dream up next?