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Taxpayers funding next property boom

The government is laying the foundations to the next property boom with your taxes.

It seems the government is determined to do everything possible to repeat the mistakes of the past and create another property boom. There can’t be anybody who does not acknowledge that the last property boom was a major cause of our banking and economic crisis. Yet hardly a day goes by without a politician, estate agent or journalist encouraging first time buyers to ‘get a foot on the first rung of the property ladder’.

Not only is this irresponsible but it shows the depth of ignorance of basic economics and the lengths some people will go to promote self interest.

To ‘get the economy moving’ the government has launched no less than four schemes to help people buy a home. Following the Stamp Duty holiday, there is the First Buy scheme (5% deposit), the New Buy Guarantee scheme (guaranteed 95 per cent mortgages) and now the Right to Buy scheme – a plan to sell off council houses to 2 million tenants at a possible £75,000 discount depending on length of tenancy.

Launching the scheme Mr Cameron said, “It’s no good hoping people will climb the property ladder if the bottom rung is missing. Affordable properties and available mortgages are vital. So we’re working with leading housebuilders and lenders to get the scheme under way.” There is a severe shortage of ‘affordable houses’ but Mr Cameron says that the money from the sale of council and housing association houses will be used to build new, low cost dwellings. Some hope.

All these schemes use taxpayers’ money at a time of severe cuts in public services. To repeat Mrs Thatcher’s ‘property owning democracy’ policy seems particularly inept. What needs to be done?