POLITICS

Vince Cable Warns Osborne's Help To Buy 'Not Helping' Brits Own Homes

06/10/2014 12:09 BST | Updated 06/10/2014 12:59 BST
Oli Scarff via Getty Images
LONDON, ENGLAND - JUNE 10: Business Secretary Vince Cable leaves Number 10 Downing Street after attending the weekly Cabinet meeting on June 10, 2014 in London, England. British Prime Minster David Cameron has backed Education Secretary Michael Gove's proposals for schools in England to promote 'British values'. (Photo by Oli Scarff/Getty Images)

George Osborne's flagship mortgage guarantee scheme "doesn't actually help you buy" as it pushes house prices up and further out of reach, Vince Cable has warned.

The Liberal Democrat business secretary launched a vicious attack on the chancellor's Help to Buy scheme, which backs mortgages for properties worth up to £600,000, when he spoke today in a policy debate at the Liberal Democrat conference.

This comes as new predictions by analysts suggest that Britain's soaraway house prices are set to dip across the UK next year.

Cable told party activists: "How do you stimulate supply? Mr Osborne has this policy called Help to Buy which doesn’t actually help you buy because it drives up the price and makes it less affordable. But what we really need is Help to Build. It’s small builders who desperately need credit and support for training in an industry.”

The Liberal Democrat business secretary also railed at Margaret Thatcher's "Right to Buy" scheme, telling supporters that it had done "enormous damage. "We have to stop it," he added.

The programme was previously dismissed by Lib Dem peer and erstwhile Cable ally Matthew Oakeshott as "Help to Buy Conservative votes".

Meanwhile, the Centre for Economics and Business Research (Cebr) said the UK property market has reached a turning point after its strong recent recovery.

The Cebr report, which used Office for National Statistics (ONS) data as a base for some of its findings, said: "Affordability has become such an issue in the more expensive regions of the UK that buyers are starting to baulk at high prices."

It said that although any rise in the base rate, which will lead to mortgage holders' costs becoming more expensive, is likely to be very gradual, "prospective buyers are likely to be startled by the first such increase - leading many to hold off from making purchases. This too will lead to lower prices."

Scott Corfe, head of macroeconomics at Cebr, said: "Tougher mortgage eligibility criteria, high deposit requirements and concerns about future rate rises are starting to take the steam out of the UK housing market."

He also moved to offer some reassurance, saying: "Price falls next year will be modest and we shouldn't be too worried about this - we are not anticipating a crash. The market is adjusting after getting ahead of itself at the start of 2014."

Vince Cable looking sad