Sánchez’s home guarantees have raised prices in England

2023-05-09 02:03:56

Measures similar to the latest Government proposal to facilitate access to housing for the most disadvantaged groups, that the State guarantee 20% of the first residence mortgage through the Official Credit Institute (ICO); have contributed to increase housing prices in those countries where they have been applied. The most recent documented case is that of England. This country launched the “Help to buy” program in 2013, which it ended last March, to allow families with fewer resources to obtain a mortgage loan guaranteed by the State of up to 95% of the value of the home. The aid, although it has enabled 340,000 families to find a home, has also contributed to inflating prices.

“The government’s homebuyer aid scheme has pushed up house prices in England and has failed to offer good value for money for taxpayers”warns a report prepared by the British House of Lords that was released at the beginning of last year. The document adds that “with the current scheme, prices are inflated above the value of the aid, especially in areas where it is most needed”. In this regard, the analysis abounded in that the “Help to buy” system had caused that in the British capital and in those points where there were more demand problems, the aid went directly to the price.

The guarantee system, announced last weekend by Pedro Sánchez and which will be approved in the Council of Ministers today, has not been well received by its partners, neither in the government nor in parliament. We can assured yesterday directly that it is a «infamy» that goes against the necessary measures to prevent housing bubbles.

In a similar sense, the leader of More Country, Íñigo Errejón, which warned that it will only serve to inflate prices. “That the State works as a guarantor for the purchase of housing for those who can already afford it is a transfer of public money to private hands,” warned Errejón.

Faced with criticism from its allies, the Government maintains that the guarantees are a good measure. The Minister of Transport, Mobility and Urban Agenda (Mitma), Raquel Sánchez, assured that it is a good option that will be implemented as soon as possible and added that the purchase of housing in this country cannot be “demonized”, that it continues to be an option for many people and to which an answer must be given . Regarding how the guarantees will be articulated, Mitma sources assured that they are analyzing the average prices of housing by territories, in order to “establish differences depending on the autonomous communities”. “We want to enter the definition of the criteria, see the average prices of housing and, based on that, establish differences,” sources from the Ministry of Transport explained to Efe.

Up to 50,000 beneficiaries

The minister defended the guarantees, which she calculates can benefit up to 50,000 people, after meeting together with the chief executive with representatives of the housing sector, to whom both explained the measures that the Government is taking in the matter and to those who invited join this “great national cause”. The minister assured that the sector “expressly” recognized the good work that the Government is doing in terms of housing and she recalled the measures that, together with the guarantees, will be approved tomorrow by the Council of Ministers. Thus, he referred to a new agreement with the ICO worth 4,000 million euros for the construction of 43,000 affordable rental homes with European funds, the measures to mobilize 50,000 Sareb homes or the 20,000 homes to be built in the land of the Ministry of Defense through the State Land Entity (Sepes).