Councillor Kevin Price, Labour’s Lead on Housing at Cambridge City Council, has spoken out after plans to bring forward the government’s Help-to-Buy scheme from January 2014 to next week were unveiled by David Cameron. Under Help-to-Buy, buyers of homes worth up to £600,000 will only need a 5% deposit with the government backing the next 15% of the mortgage to reduce the risk to banks on future defaults by high risk customers on 95% loans.
Cllr Price said: “Because Cambridge is a high growth area with a limited housing supply, prices here are already high and on the increase. All that this scheme will do in Cambridge and the surrounding area is inflate house prices further as more people compete to buy the homes available. This may be good news for developers and even for those selling their homes but it is bad news for the thousands of residents on low or middle incomes who will be forever priced out of the market or end up renting privately at sky high rents.”
Cllr Price added: “What Cambridge needs are more homes built by social landlords at affordable rent levels not an artificial housing bubble created in Westminster. What’s more, if the government were serious about encouraging young first time buyers this scheme would not cover houses over £300,000 at the most.”