One of the most significant changes made by Chancellor of the Exchequer, George Osborne, during his recent budget statement was the announcement of a new Help to Buy scheme for the UK housing market.
Yet with transactions in the housing market remaining well below pre-crisis levels, is it likely to kickstart the UK economy? On the face of it, at least, it might actually do the reverse. The reason is that Help to Buy will not increase the credit available from the banking system. If credit availability remains static and mortgages start to move up to 90% of total purchase prices (from the current level of around 65%), surely a corresponding reduction in housing transactions would be the order of the day, with the available credit spread between fewer mortgages? The outlook for c...
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