George Osborne's Help To Buy Scheme Is 'Crude Attempt To Buy Tory Votes', Say Top Lib Dems

Britain's Chancellor of the Exchequer George Osborne leaves 11 Downing Street in London on June 19, 2013. AFP PHOTO/ANDREW COWIE (Photo credit should read ANDREW COWIE/AFP/Getty Images)
Britain's Chancellor of the Exchequer George Osborne leaves 11 Downing Street in London on June 19, 2013. AFP PHOTO/ANDREW COWIE (Photo credit should read ANDREW COWIE/AFP/Getty Images)

George Osborne's flagship Help to Buy scheme has been dismissed as a "bribe" to win Tory votes by senior Liberal Democrat politicians after the Chancellor announced it would come into effect from next week rather than next January.

It comes amid reports that the first time Lib Dems heard of the move was when David Cameron announced it in a Sunday Telegraph interview.

The second phase of Osborne's mortgage guarantee scheme, which is due to last for three years, aims to support buyers for any home up to the same value with deposits of 5-20% on properties worth up to £600,000.

The Chancellor has already asked the Bank of England to annually review the scheme's effect on the housing market as a cautionary measure.

Vince Cable warned earlier in September that Help to Buy should be rethought as it risked causing another housing bubble. LibDem critics said that the scheme was a "cynical" measure to push up house prices, thanks to the sluggishness of government housebuilding schemes.

Lib Dem peer Matthew Oakeshott, who used to be a coalition Treasury spokesman, told the Huffington Post UK: "Cameron's cynical policy is Help To Buy Conservative votes. House prices and rents across Southern England are already unaffordably high, 2008 was a dangerous price spike and we mustn't go back there.

"We must build to get prices and rents down, not bribe to push them up. The Bank of England should not be flooding the market with mortgages at unsustainably low rates now which will bite overstretched families back hard after 2015."

Lib Dem MP Annette Brooke, head of the All Party Parliamentary Group on Housing, told HuffPostUK: "I think this needs careful monitoring, stimulating demand on a rising market, unless supply rises in response, obviously can lead to potential overheating in the market."

Meanwhile Lib Dem MP Adrian Sanders told HuffPostUK: "Conference season is all about rushing policies out but in the grand scheme of things, a move forward of three months won’t make this much more or less a questionable policy."

George Osborne's Help to Buy scheme has sparked fears of another housing bubble

The Lib Dems' mounting concerns come as house prices in England and Wales saw their biggest month-on-month increase in more than six years in September. According to a Hometrack survey, house prices rose 0.5% from August and up 2.4% over the same time last year.

Speaking this morning on BBC News, Osborne said that the scheme was not a "weapon of mass destruction".

He added: "Is this generation that have got homes prepared to say to the next generation: 'You know what, you are never going to be able to afford a home'? I think that would be a very, very bad step for our society."

Lib Dem grassroots groups have rallied against the scheme, with the chairs of Liberal Reform, Social Liberal Forum and Liberal Left warning in a joint letter that they fear "the new element [of Help to Buy] may simply lead to another house price bubble."

Gareth Epps, chair of the Liberal Democrats' Social Liberal Forum, told HuffPostUK that the scheme was "risky and wrong" because it fails to address the "lack of supply in the housing market".

He added: "It does seem to be a fairy crude and contrived attempt by Conservatives to buy support for certain of their core constituencies."

Despite reports that the acceleration of the next phase of Help to Buy was decided just by the Tories, the Liberal Democrats insist they were kept fully aware.

A Lib Dem spokeswoman told HuffPostUK: "The Liberal Democrats were aware that the Conservatives would be announcing their plans to accelerate the Help To Buy scheme."

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