He said: "We need to look instead at ways of increasing housing supply, and in that way keep house prices down, instead of pushing them up. The government seems to have learnt nothing from the housing boom and bust of the last decade. Returning to the same policy approach that got us into so much trouble makes no sense.
"The government's initiative to support new mortgage applications from first time buyers does not address the fundamental issue, which is a shortage of new housing supply. A similar scheme in the UK (Help to Buy) has been widely criticised by bodies, such as the OECD, for simply blowing up property prices and not addressing supply. This scheme gives control of housing back to banks and developers.
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"The reality is that we are only building a fraction of the houses we need, and the banks are not going to be able to provide the development finance required. Instead of relying on mortgage demand to stimulate construction activity, we should be using innovative new ways of building public housing through partnerships between local government, housing associations and Real Estate Investment Trusts (REITS). The government should also work to professionalise the private rented sector and introduce effective rent controls to protect people from the excesses of the market."
(CD/MH)
