Wednesday, September 3, 2008
The latest measures do not address the underlying problem
One solution offered yesterday, that overstretched owners could sell all or part of their home to a council or housing association and rent it back, is an idea that owes much to the imaginative thinking broached by the Liberal Democrat Treasury spokesman, Vincent Cable. It is a good idea, and one that is least likely to distort the market. The same cannot be said of the interest-free loans for first-time buyers. It looks like a sop to overstretched construction companies complaining about being stranded with unsold stock. What is happening in the UK housing market is a correction [not yet a crash?]. This correction might be painful for existing home-owners, and the many branches of the economy that fed off the bloated market. But it is the best possible development for first-time buyers.