Chief secretary to the Treasury Danny Alexander defended the government’s Help to Buy scheme on Radio 4’s Today programme this morning. Critics of the scheme, which launches today, have said that it will create a surge in demand for housing, and will push prices up, creating a “housing price bubble”.
Alexander said that there was no housing price boom, and that the scheme would help people who did not have “piles of cash”.
“People who think that there’s a housing bubble should get out more. They should get out of Kensington and Chelsea, and go to Manchester or Birmingham, and major towns across the country,” he said.
Asked if he thought that a housing bubble could form as average house prices were rising faster than raises in income, Alexander replied: “I’m not sure it’s right to say that house prices are so high.”
However, as NatWest and RBS’s 95% mortgages became available today through the scheme, the launch was overshadowed by a warning from the chairman of the Commons Treasury Select Committee, Andrew Tyrie, who said that any problems with the scheme could lead to “threats to financial stability”.
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