Thursday, 21 March 2013

Helping the Rich get Second Homes

Ed Balls has raised an issue with the budget, one that could become a bigger issue that the pasty tax, if it is not properly handled. This issue is the that loans that the government is planning to give out, loans of up to 20% of a house's value, will simply be used for the rich to get a spare home if they wish. If we see this in the light of the bedroom tax, which is seeking to remove spare homes from those who receive benefits, then it paints a really worrying picture. Osborne could have messed it up again.

Claiming that there was confusion over the plans, Ed Balls has stated the that these loans, which are designed to make it easier for people to be able to buy a house, are just another way of helping the rich, rather than something that has been decided to help those who are struggling to get a mortgage. Looking at the scheme, we can see how he would think this, as it would significantly help those wishing to buy a house, irrelevant of whether that happens to be the 2nd, 3rd or 4th house that they have had.

In addition, the many critics have highlighted that theory that the plan will force up inflation. This is a very serious risk, and could affect the worse off in society even more. By allowing more people to buy houses, the price of homes would fly up, meaning that it became even harder for those who are young and looking for a first home. In this sense we can see that the plan is a failure.

However, this is not the end of the story, and it is not all doom and gloom when it comes to this plan. For example, the final details of the plan have not yet been worked out, meaning that its full effects cannot be truly estimated. If the scheme was limited to those who needed it most, like people after their first homes, then not only would it prevent it being a second home subsidy, but it would also reduce the effect on the price of homes as well as overall inflation.

In addition, people really need help when it comes to buying houses. People are simply being priced out of the market. So, the government helping them out is a really welcome event. It is one of the policies that might actually help people, even if it is sometimes used by the rich. Hopefully, this plan will be the start of things getting a little bit easier when it comes to taking the momentous step of choosing to own your own home.

This plan seems like a good idea at the moment, as long as Ed Balls warnings do not come true, something that can hopefully be sorted out when finalising the details. It seems, however, that Labour are after finding something in the budget that is as big a howler as the pasty tax. They are scraping the bottom of the barrel at the moment, as this could be one of the best budgets that Osborne has presented.

Well, that is only if he gets the finer details right.


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