The government’s Help to Buy scheme has pushed house prices to unaffordable levels in Islington, according to Labour Party figures.
Tom Copley AM, Labour’s Housing Spokesman for City Hall, made the comments as the Chancellor, George Osborne, is expected to announce that the housing scheme would be extended to 2020 in his budget speech tomorrow.
Help to Buy scheme
Help to Buy is designed to help those without the money for a large deposit to buy a house costing no more than £600,000.
It was one of the surprises of last year’s budget and is credited with boosting construction and the housing market in the UK.
Mr Osborne is expected to announce that the scheme will be expanded to newly built homes, and told the BBC the plan would see 120,000 new homes built.
Labour criticism
But critics, like Mr Copley, worry that Help to Buy is contributing to ever-rising house prices.
He said: “I think the whole plan should be scrapped. The government should not be in the business of underwriting people’s mortgages.”
Last week, Islington Now reported that house prices had gone up in our borough by 9 per cent in just one year, with the average property price now above £500,000 in most of the borough’s post codes.
Mr Copley said the scheme was contributing to increasing house prices in areas like Islington.
“Help to Buy has helped push up house prices in inner city areas,” he said. “And while it may help some people get on the ladder, it makes it difficult for the vast majority of people.”
These comments were echoed by Councillor James Murray, Executive Member for Housing and Development at Islington council.
He said: “In Islington we have a situation where house prices and rent are going through the roof, and any scheme that helps push up house prices, which is what Help to Buy seems to be doing, is clearly not solving the problem.”
Expert’s view
Jules Bee, an estate agent in Bairstowe Eves’ Archway office, said Help to Buy was one of a number of factors contributing to a property boom in Islington.
“There are ten buyers to one property here. So if houses are priced strategically, you will get more than you put them on for. We just had a property at the weekend that went for £40,000 more than the asking price. In the long term, Help to Buy has worked well in some patches of the borough, such as areas with new flats being put up, like City Road, and parts of N5. Since the scheme came out, house prices have gone up more and more, but in truth it’s probably only contributed a little bit.”
Islington’s inequality
The announcement of the budget comes at a time when there are increasing fears that middle income families are being forced out of the borough due to high house prices.
In October last year, the Cripplegate Foundation published a report which said that Islington was becoming the preserve of the ultra-rich and ultra-poor.
Those interviewed for the report said they feared the borough, which is home to Emma Watson and London Mayor Boris Johnson among others, is losing its sense of community.
Cathy Daniels, 62, bought her house on Bryantwood Road with her husband in 1994 for £140,000. Twenty years later, she has agreed to sell it for close to a million pounds to two Australian lawyers. She admits that she and her husband could not afford to move to the area today.
She said: “When we moved here, Islington was filled with settled working-class areas and immigrant communities. There were middle-class people, people who were professionals, lefty, arty people who put quite a lot of effort into community programmes. But these days a lot of the young people moving into Islington are in the private sector, and they don’t seem to have much time for community things. It’s becoming much more faceless. People like us are being squeezed.”
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