It is fashionable now to criticise government housing policy. Some people argue that helping more to buy their own home through Funding for Lending and Help to buy will simply fuel a new boom. They then often go on to criticise the tendency for others to invest in buy to let properties, as savers seek some way of earning a real return on their savings at a time of ultra low interest rates. If you do not like either of these it just seems to leave the idea that the government should borrow or print even more money to build more Council houses.
I appreciate some here simply want to stop all inward migration and say we have enough homes. This is not about to happen, with only the Conservatives of the 3 main parties in Parliament pledged to make a substantial reduction in net migration, and with continuing membership of a common work and border area with the rest of the EU the will of this Parliament’s majority. There would still need to be some new additional homes in popular parts of the country anyway. In some parts of the UK there are plenty of homes, but in others, there are acute shortages at affordable prices.
I favour helping home ownership. Most people either own their own home or wish to do so. It is the most flexible type of housing, leaving you free to sell and move in a way which you cannot do from social housing. It is the kindest on the elderly, as by the time you retire you will have repaid the mortgage. If you live in rented accommodation you will pay the dearest rents in your elderly years when you have less income, which is far from friendly. It is the best to give you the greatest freedom to adapt, decorate and enhance your property as you see fit, and change it over the years as your family needs change and fashions evolve. It also means you own an asset, which may be useful as security for borrowings if you wish to venture in other fields.
I have no problems with the government helping bridge the gap for people with too little savings to make the large deposit for a first home. Banking Regulators have lurched from allowing or encouraging banks to lend far too much against each home, to letting them lend too little. The government has decided to intervene directly whilst the banks and their regulators are being so cautious.
Of course I have no wish to see another unsustainable boom like the 2005-8 one. The government is limiting the time for its Help to Buy and Funding for Lending scheme. If it started to trigger high price rises and overheating they would need to wind it down or reduce it sooner. If we wish to see more homes built where people want them then we do need to ensure a sensible flow of finance to the home market. Recent years have seen all too few new homes built, making it more difficult for people to find the home they need in the parts of the country under pressure.
I am also intrigued by the hostility towards Buy to Let. It was not so long ago fashionable commentators were urging the UK to be more like the continent and have a larger private rented sector. Now it is expanding it has its critics. I see nothing wrong with people using savings or prudently assessed borrowings to own and rent out property. Government has not been a great landlord, and is itself so hugely overborrowed that it is not in a good position to borrow to build Council houses on a big scale.