Osborne denies funding London-only housing bubble

Chancellor George Osborne answers questions on the subject of the Autumn Statement in front of the Commons Treasury Select Committee
Chancellor George Osborne answers questions on the subject of the Autumn Statement in front of the Commons Treasury Select Committee
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CHANCELLOR George Osborne has rejected claims that his controversial Help to Buy scheme is fuelling a house-price bubble in London and the South East, insisting that the majority of applicants have been buying relatively modestly-valued homes in other parts of the country.

The Chancellor’s decision to set a maximum value of £600,000 for homes eligible for a 15% Government-backed mortgage guarantee under Help to Buy led to claims that the policy would fuel further rises in the already-resurgent housing market in the capital, rather than its intended goal of helping first-time buyers unable to scrape together the large deposits currently demanded by banks.

The chairman of the House of Commons Treasury Select Committee, Andrew Tyrie, challenged the Chancellor over allegations that the policy was “adding vodka to the punch bowl just as the party gets going”.

But Mr Osborne insisted that Help-to-Buy support was going to the right kinds of households.

“The early evidence from Help to Buy is that three quarters of those taken out are not living in London and the South East,” said the Chancellor. “The average house purchase that they have been looking for is £160,000 - that’s below the national average.

“In other words, it is dealing with exactly the families we want it to help.”

The exchange came as Mr Osborne was grilled by the committee over the details of his Autumn Statement last week.

He announced that next year’s Budget will be held on March 19.

But he resisted requests from committee member John Mann to estimate the cost of filling the tank of a Vauxhall Astra car with petrol, leading the Labour MP to taunt him: “I know that your colleagues suggest you are yearning for Chinese-style government, but you are here to answer questions.”

Mr Osborne retorted that, as Chancellor, he has no control over the global oil price, but that his successive decisions to freeze fuel duty meant that a litre of petrol was now 20p cheaper than it would have been under the plans he inherited from the previous Labour government.