Were you keen on George Osborne’s plan to subsidise house-buying? Think again.
Here’s Richard Murphy of Tax Research UK:
Those earning less than £80,000 out of London and £90,000 in it (or let’s for simplicity say well over 90% of the population) will be allowed to buy homes on a subsidised basis.
But let’s be clear what this does. This is not a subsidy to buy homes. This is a subsidy to keep up house prices and to ensure people borrow the maximum possible.
George’s economic plans are critically dependent upon house prices increasing at 6% per annum, and they are not. The result is that he is giving state subsidies to make sure that they do. As a result he is using state money to increase the wealth divide in society, keep housing unaffordable and keep the vast majority off the housing ladder.
This is no panacea – except for the debt free, ageing baby boomer, and a desperate Chancellor. Please don’t read it any other way.
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