Help to headline

The last week has seen a multitude of discussion pieces on the BBC asking whether the Help to Buy scheme is leading to housing bubble.

Partly this is due to the Government's decision to bring phase two forward. This means that the potential mortgagee only has to pay a 5% deposit and the Government will underwrite the next 20% but even so the bank or building society has to provide the remaining  95%.

Before the financial crisis there had been 95% mortgages, I bought my flat on one such mortgage in 2001 - way before the housing market over-heated. It was a little later that 100% mortgages became available, and even later that 125% mortgages became available which seems to make no sense apart from relying on house price inflation. It did become bizarre. But we are nowhere near that.

Without help to buy you would probably need 20% deposit to buy a house - which puts most property beyond most. If most people can't buy property and are stuck where they are, there will be no reason for new houses to be built unless they're mansions affordable by only people with a stash of cash. House prices would jump higher given the housing shortage.

The purpose behind help to buy is to enable people to jump on the housing ladder, get the market moving, give impetus to build and make everyone feel better.

The basis of debate is whether a more healthy housing market will lead to unsustainable housing inflation and a bubble. We know that it might if we don't build more houses, so we need to get building, but the housing market needs to be moving first. At least the Government has tried to relax planning rules to make it easier.

But do people really believe we're on the verge of a boom only 6 months after talk was of a triple dip and after 5 years of dire horrible news. It's way too early! Get a grip! The IMF revised our growth rates up to 1.4% this year and 1.9% next year, that is no way like boom territory (which is more like 3% against our trend rate).

Even if this did start to cause a boom, the Government can very quickly withdraw support for new mortgages and even close the scheme at a few days notice!

Which makes me think why is this all over the BBC? What would make the impartial BBC devote so much time to a boom where there isn't one? Can't understand it.

Squiffy.

David Cameron Speech: Verdict

I was away on the day of David Cameron's speech, so didn't cover it on the day but I thought I'd say a few words about the speech for completeness.

The speech was ok. He didn't have any new policies, but was trying to form an argument. It was reasonably effective, but didn't blow your socks off.

I know David Cameron is a good speaker, but he has done the best speeches when his back is against the wall. His speech for the leadership, and again when Gordon Brown was thinking of an immediate General Election were his best. They both were when he did the speech without notes. I believe he thinks this makes him look less Prime Ministerial, but he needs to inspire. Especially now, when he has an upbeat message.

Next year, he either needs to do a speech without notes (but none of the cheesy geekiness of Ed Miliband) or find a Sam Seabourne/Toby Zeigler combo to give his oratory the lift it needs.

Squiffy.