Soaring numbers of properties sold under the Help to Buy scheme are being snapped up by buyers who earn more than £50,000 or even £100,000.

David Byers www.thetimes.co.uk 

Campaigners complain that poorer families are being forced to remain in rented property while middle class buyers take advantage of interest-free government loans.

Some 58 per cent of Help to Buy properties in England were sold to people with household incomes of more than £50,000 in the six months to June last year, compared with 29 per cent when the scheme was launched in 2013. One in 14 properties went to buyers with a household income of more than £100,000, compared with one in 30 when the Help to Buy loan scheme was launched.

It was targeted at first-time buyers, but the Ministry of Housing figures show that about one in five homes were bought by people who had previously owned a property.

There has been an increase every year since 2013 in the proportion of Help to Buyers with a household income above £50,000. This shows that the government is increasingly throwing interest-free loans at middle-class buyers who might be able to get on the property ladder without them, campaigners said. They also criticised the scheme for driving up property prices — and builders’ profits in the process.

Meanwhile poorer families are being marooned in the rental sector.

The Help to Buy equity loan scheme lends buyers 20 per cent of the property price (40 per cent in London) interest-free for five years. You need to raise a 5 per cent deposit yourself and have to be buying a new-build home. At the moment loans are available on homes worth up to £600,000 in England, but lower regional price caps will apply when the scheme changes on March 31.

The 20 per cent loan allows buyers to get the cheaper mortgages that are available to those with deposits of more than 1 5 per cent.

It is thought that one reason for the increase in high-earning buyers using Help to Buy is that property prices have risen faster than wages, leaving more people unable to afford a home without help. It is also thought that many lower income buyers find it impossible to raise even a 5 per cent deposit, leaving more properties for wealthier buyers.

Lindsay Judge, a research director at the Resolution Foundation, a think tank focused on improving incomes for lower earners, said: “The scheme is clearly benefiting many who could have bought a property without financial support from the state. The time has come to restrict the scheme to those who need it most. At a point when there are so many other demands on the public purse, a household income cap would reduce the deadweight.”

Almost half (47 per cent) of the buyers who have used the loan scheme since it began had a household income above £50,000, and 5 per cent earned £100,000 or more.

About 279,000 homes have been bought under the scheme for a collective total of £75.06 billion. The government has lent a total of £16.46 billion. Reuben Young from Priced Out, a campaign for affordable house prices, said the government was “literally taking public money and investing it in rising house prices”. He added: “These stats are yet another nail in the coffin for Help to Buy. It is helping many who already could have afforded homeownership to simply buy larger homes than they otherwise would have.”

The average price of a property bought with Help to Buy money was £269,385 in June last year, about £33,000 more than the national average house price.

In 2019, 55 per cent of those who used Help-to Buy had a household income of more than £50,000 and 6 per cent earned more than £100,000. In the same year the National Audit Office, the public spending watchdog, calculated that 63 per cent of buyers who used the scheme could have afforded some sort of property in their area without it, and almost a third could have secured a big enough mortgage to buy the home that they wanted.

The government has made changes to target those who most need help. From April 1, Help to Buy will be available only to first-time buyers in England. Scotland is scrapping the scheme and Wales has extended it for a year. Builders and buyers want the existing scheme to be extended because of construction delays caused by the pandemic, however. Buyers hoping to get a loan fear that they will miss out on the homes they want because they will be caught out by the new price caps.

Mark Finch, a mortgage adviser specialising in newbuilds in the northeast of England, said the Help to Buy scheme continued to have an important purpose.

“The property market has been affected by a lack of mortgage availability for first-time buyers, and there are close to zero deals in the 5 per cent deposit bracket at the moment.

“If you have no family help, you have no choice but to use Help to Buy to get on the ladder.”

The Ministry of Housing was contacted for comment.

Help to Buy: the key numbers

278,639

Home sales since the scheme started in April 2013

143,038

Buyers who took out a Help to Buy loan with a household income of more than £50,000

13,114

Buyers who took out a loan with a household income of more than £100,000

49,743

Buyers using the scheme who had bought property before

49,020

Equity loans had been repaid by April 2020

1.93%

Interest rate payable from April 1 on a loan issued before December 31, 2013

Figures for England to June 2020. Source Ministry of Housing, Homes England

Has the government failed to control Covid because effective pandemic measures are incompatible with their ideology?

Claire Jones westenglandbylines.co.uk

When the pandemic hit, the UK was already battered by Tory austerity cuts. Hospitals were 40,000 nurses short, available beds were down from 22,000 to 13,000 and public health spend per head had been reduced by nearly a quarter. The UK had the third lowest number of beds, doctors and nurses in the EU. Tory underfunding and cuts meant that the UK was ill prepared from the very start.  It’s clear that with a socialist policy of proper funding the country would have faced the pandemic from a stronger vantage point.

Johnson’s balancing act

The government’s ensuing incompetence is also regarded as a significant cause of the UK’s world beating death toll. This is true in the respect that Johnson, through weakness of character, has been dogged by his inability to make unpopular decisions. When pushed by huge public pressure (e.g. the school meals scandals) he has taken firm action but only at the last minute. In the main, when decisiveness is required he has opted for disastrous ‘compromise’ policies instead.

Two opposing voices have caused Johnson’s allegiances to spin like a weathervane. On the one side is his hard line, business first, back bench rebel contingent, including the European Research Group (ERG), the Covid Recovery Group (CRG) and Sunak. On the other side is the scientific advice, the unions and public opinion. Where public opinion is itself divided Johnson gets away with vacillating feebleness, a case in point being whether schools should close. But, in a narcissistic balancing act aimed at preserving his popularity with both sides, he has generally produced ‘loose’ Covid strategies that are partly fashioned by the ideology of his back bench.

Throughout the pandemic Johnson has been pressured by the backbench to ease or remove lockdown restrictions. Their argument is that strict lockdowns damage the economy and ultimately lead to even greater loss of livelihoods, deteriorating health and increased pressure on the NHS. But this argument is weak – whilst Johnson’s initial dithering was perhaps excusable, by the end of the first lockdown it was clear that robust measures with the goal of maximum Covid suppression were the most effective ways to control Covid. The government was warned by Independent Sage and others that half measures such as a natural herd immunity strategy were doomed and that suppression was likely to be the only successful route. This view was born out by the success of nations that went for early suppression such as NZ, Australia, Thailand, South Korea, Taiwan, Finland, Singapore, Norway and Vietnam and also by Sweden’s failed herd immunity approach.

Certainly, robust suppression would have caused some short term pain. But Johnson’s half baked, bet hedging measures caused far more protracted economic damage, far more unemployment, far more Covid deaths, far more non-Covid deaths, far more mental health issues and far more Covid circulating in the population than a robust, early Covid suppression would have done. So why did the rebel back bench doggedly persist with their pressure on Johnson to temper restrictions, despite the lethal implications?

Backdoor Business and compliance

The ERG and CRG support free market capitalism, the mission of which is to shrink the state, lower taxes and deregulate business. So one reason why full Covid suppression was resisted is because it is an anathema to this libertarian ideology. Full lockdown is a “dystopian”, “draconian” tactic that smacks of state control. High Wycombe MP Steve Davis describes it as “devoid of any commitment to liberty”. In terms of business, the “liberty” in question is for businesses to make money and create profit. But  keeping as many businesses open as possible, whatever the risk, is a “liberty” too far. One example is that controls at the UK’s borders have been woeful for almost a year. Whilst this might be simple ‘incompetence’, it is more likely to be driven by the motive of profit before people – closed borders would have curtailed business travel and the tourism industry.

In particular, keeping businesses open meant that the government could save money by not having to support them properly. Unlike in Europe and America, assistance for many UK small businesses took the form of loans which they will struggle to pay back, whilst a wide range of self-employed people slipped through the furlough net altogether.

Backdoor business was also promoted by the conveniently leaky definitions of ‘key worker’ and ‘essential business’, expanded in lockdown 3 to include everyone from bankers to estate agents, the DVLA, car factories and flower shops. Many people are working who shouldn’t be. The problem here is that effective suppression of Covid requires strong compliance. However, this loose terminology enables businesses in our zero hours gig economy to operate with no government plan to introduce proper financial support or legal protections for employees regarding Covid safety.

For example, employees tend not to report breaches of safety rules (e.g. lack of PPE) because they fear losing their jobs. (99% of employees don’t make a formal complaint). Complaints that are reported are not acted on. At the time of writing there have been 2,500 reports of employers breaking lockdown rules but not a single one has been dealt with (Dr Emma Runswick, Chair of the People’s Assembly, at the Zero Covid Conference on 28 November 2020).  Similarly, employees are being forced to return to non-essential jobs on pain of being fired. Some are even issued with a ‘letter’ stating falsely that they are doing essential click and collect work in case they are stopped by the police (BBC News interview with Birmingham employee in high fashion retail). Employees currently have no effective, quick legal protections against practices such as these.

A consequence of this lack of legal protection is that self-isolation compliance is catastrophically low – 18% according to Robert West from Independent Sage at the Zero Covid Conference. So many more are working who shouldn’t be. This could have been mitigated by financial support from the government. But, financial aid packages for people self-isolating have only just been introduced. Sick pay stayed at £95 pw, again forcing potential Covid carriers back out to work. Here the UK government’s approach contrasts sharply with other countries, e.g. Portugal – 100% of basic salary for 14 days, Germany – 6 weeks of full pay.

Examples such as these suggest that the government, driven by the free market, libertarian ideology of its back benchers, has no real intention to control business, to protect workers’ rights or support people unable to work as this would negatively impact business and the economy. Inaction here is a double whammy for the government since it simultaneously both saves money and increases profit. The upshot is that Covid has continued unsuppressed.

“The UK government’s [Covid response] is a very concrete expression of the idea that left unchecked, the market will rationally distribute resources to where they are needed. it is the traditional pillars of the Thatcherite economy – principally large businesses and landlords – which have so far benefitted most from the government’s largesse”.

Tom Hoctor, LSE British Politics and Policy (1 September 2020)

Effective compliance requires the introduction of a raft of socialist measures such as legal protections, increased wages and financial support none of which the government has been prepared to do. As Dr Emma Runswick and Richard Horton, editor of The Lancet argued (also at the People’s Assembly Zero Covid Conference), the government had an opportunity to attack the deep inequalities exposed by the pandemic but the chance was ignored. Instead cronyism has ruled – vast amounts have been spent on handing deals to Tory donors whilst big pharma and Serco make huge profits from Covid.

The conclusion is inescapable

I have suggested that stringent Covid measures are inimical to Tory ideology. The back bench has dictated our pandemic journey by pushing a weak Prime Minister into taking a compromise position which has, in turn, dangerously weakened our ability to resist the virus. Failures of policy have kept Covid circulating in the community and led to avoidable deaths. The new vaccine programme is a wonderful thing but it also masks the fact that right wing ideological unwillingness to tackle systematic inequalities has, up until now, fuelled viral spread.

The Tories could have avoided our shocking landmark death toll by biting the bullet and introducing some fundamentally socialist policies. But they chose not to.

“Jumping Jupp Flash” rehearses what we already know as he plays the “Dick Barton” gambit. 

Doesn’t mention the woeful state we’re in: economy, death rate etc. – Owl

Simon Jupp www.midweekherald.co.uk

The vaccination programme only started a few weeks ago and nationally 6,221,850 people have been vaccinated, as I write this. 157,181 people have had the jab in Devon. It’s a remarkable achievement!

 We have an exit plan with the vaccine. Everyday we get closer to lifting restrictions and closer to be able to hug our family once more. As I mentioned in my last column, I want to shed some more light on the vaccination programme here in East Devon.

 The opening of the new NHS regional mass vaccination centre at Westpoint last week highlights the community spirit in Devon. Over 800 people have volunteered to help at Westpoint alongside the staff from the RD&E and Network Rail. I was invited by the RD&E to visit Westpoint and I’d like to take this opportunity to thank everyone involved, including the volunteers who’ve given up their time to help.

 Westpoint will increase the capacity to vaccinate on top of those already being offered at the RD&E, Exmouth Tennis Centre and local GP surgeries. The team at Westpoint are inviting those aged over 75 to book a vaccination. If you get an invite but don’t want to travel, you can still be vaccinated by a local GP service. Please do not worry or contact your GP, they will contact you as soon as they can. Once you have been vaccinated, you’ll still need to follow the restrictions. 

In my mailbox this week, I’ve been alerted to a scam email doing the rounds. This particular scam says that you have been selected for the vaccination on “the basis of family genetics and medical history”. Once you accept the vaccination, they ask for your card details. 

 You will never be asked for your card details to receive the vaccine. It is free of charge for everyone. Please share awareness of this scam with those you know and do contact me if you receive any other scams and I’ll highlight them in future columns. The police are aware of this scam and I hope those behind it are brought to justice.

Last week we revealed Government had cancelled all orders with Abingdon Health for antibody lateral flow tests because it had failed to gain approval from the MHRA for home use of those tests. 

Today, an explosive story in the Daily Mail reveals that “On April 6, Mike Batley, the Department of Health and Social Care’s deputy director of research, wrote to senior colleagues warning that although Lord Bethell and Mr Hancock already seemed to have approved the deal, ‘this all happened over the weekend without any engagement with us’. It was, he added, ‘no way to do business’.”

You can read the full story here. 

We have long thought the award of contracts to Abingdon Health was unlawful. That is why, some months ago, we took the decision to bring judicial review proceedings. However, Government continues to resist those proceedings and so we must continue to pursue them.

If you are in a position to do so, you can donate to our legal action here. It’s only possible to take this case thanks to the support of hundreds of people.

Thank you, 

Jolyon Maugham QC

Director of Good Law Project