Prime Minister plays down danger of potential housing bubble

Prime Minister David Cameron has moved to allay fears that the governmentís flagship Help to Buy Scheme is risking a potential ëhousing bubbleí in the market, branding the scheme as a ëcomplete successí.
Mr Cameron praised the impact the scheme has had in such a short space of time, and highlighted that over 700 houses had been purchased and another 6000 were experiencing some form of market interest since it begun earlier last year.
The government initiative was created with the goal of enabling prospective homeowners and first time buyers to climb onto the property ladder. The overarching aim was to help those who had sufficient money to make mortgage payments acquire a home, by lowering the amount they had to pay for high cost deposits. 
Under the scheme consumers can now enjoy obtaining a property by only having to pay a 5% deposit on houses worth up to £600,000. The government also guaranteeís 15% of mortgages given out by banks, which has made them more prepared to approve mortgage applications than before.
And Mr Cameron has said that the scheme has enabled young families, who couldnít have envisaged purchasing a property back in 2012 realise their dreams and manifest them in reality. 
He also highlighted that the current level of property prices are still significantly lower than back in 2007, and would be monitored closely to ensure that no dangerous outcomes are incurred as an effect of the Help to Buy scheme. 
Mr Cameron said: “Where we are today, house prices are still way below the peak they reached in 2007.
“Forecasters do not think they will get back to the level before the crash even in 2019. So there is no evidence of a problem.
“This is about helping people to achieve the security and stability they want of owning a flat or a home of their own.
London/UK divide
Mr Cameron also highlighted that the national increase in house prices outside of London and the South East was just 3% last year, and that it is only in these areas where any real danger lies.
He added that in other areas Help to Buy had been a dramatic success, whilst he also disclosed his belief that once the current wave of mortgage applications are approved, that just under £1 billion of mortgage lending would have been granted to prospective property owners. 
Currently, the average help to buy mortgage applicant has sought to purchase a property worth about £160,000, which is far below the national average of around £250,000. 
Furthermore, the average amount currently being paid a month by those who are currently utilising a help to buy deal is just £900, whilst their annual salary is above the UK average and stands at £45,000.
Over 75% of help to buy users are outside of the identified problematic areas of London and the South East, suggesting that the likelihood of a ëbubbleí is small.
New Situation
Despite the apparent success of Help to Buy in areas outside of London and the South East, business minister Vince Cable has called for a re-evaluation to take place of the property market in order to change the scheme to fit current circumstances. 
“There is a raging housing boom in London and the South East – not in other parts of the country,” he said.
The problem in these areas has been that there has been a lack of supply to meet demand, and where there has been house building it has often been for expensive property for foreign investors to purchase.
The reality of this has been that many people, who are already struggling with the higher cost of living in London, are being priced out because they simply cannot afford to take on the huge levels of debt necessary to afford being a homeowner in the capital.
Shadow housing minister, Emma Reynolds, has called for greater efforts to be taken in house building across the country, so that the countryís lower earners can afford to enter onto the property ladder as well.
She said: “Any help for first time buyers struggling to get on the property ladder is to be welcomed. But rising demand for housing must be matched with rising supply if this scheme is to bring the cost of housing within the reach of low and middle income earners.”

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