Saturday, September 25, 2021

EU Wants UK To Scrap `Help To Buy` Scheme

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The European Commission has said that George Osborne’s flagship Help to Buy scheme must be reined in and that council tax should be increased to prevent house prices from spiralling out of control.

In an unprecedented intervention into UK Government policy, the commission has requested that the Chancellor “deploy appropriate measures” because of rising house prices, especially in London.
The commission has said that Mr Osborne should adjust the Help to Buy mortgage guarantee scheme and increase council tax on expensive properties.

George-Osborne-001image source: theguardian.com

The inference that Help to Buy is potentially fuelling a seriously damaging property boom is sure to anger ministers and comes as David Cameron prepares plans to reform Britain’s relationship with the European Union, before an in-out referendum is held in 2017.

Cameron is also struggling to prevent Jean-Claude Juncker, the former prime minister of Luxembourg, from being appointed as European Commission president when current leader, Jose Manuel Barroso’s term is over.

The proposals were made in a document intended to explain to Europe’s five biggest economies how they can “make growth stronger, more sustainable and more inclusive”.

“The commission recommends that the UK deploys appropriate measures to respond to the rapid increases in property prices, notably in London, for example by adjusting the Help to Buy scheme and mitigating risks related to high mortgage indebtedness,” the report said it also added that the Coalition must take “action” to increase housing supply.

The report repeatedly warns that rising property prices have not been matched by similar increases in council tax bands. It said that the owners of some of Britain’s most expensive properties are now paying relatively less council tax than the owners of cheaper properties.

“At the moment, increasing property values are not translated into higher property taxes as the property value roll has not been updated since 1991 and taxes on higher value property are lower than on lower value property in relative terms due to the regressively of the current rates and bands within the council tax system,” it said.

Rupert Snowden from innovo property has suggested that the Help to Buy scheme could be one of the main causes of the ‘super bubble’ London is currently said to be encased in.

The UK has also been told that it needs to “improve efforts” to cut youth unemployment and reduce child poverty, whilst it must also “improve the availability of affordable quality childcare”.
The Commision also criticises the government for not doing enough to encourage apprentices and has warned them that the “qualification system is too complex and needs to be streamlined”.

The unwanted input comes at a precarious time as Eurosceptic parties are on the rise across Europe, UKIP being the most notable of these in the UK. With public opinion decidedly against continued involvement in Europe, the average British citizen is sure to take Europe’s decision to try and meddle in the UK’s governmental affairs as a personal affront, and this may lead to a potentially dangerous rise in support for the aforementioned UKIP.

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Peter Black
Freelance blogger, main interests being real estate, property investment and green investments. studied in London, live in London, born in London. Chelsea fan!

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