It has to.
If it weren't there, banks would lent less to any given first time buyer, would could only offer less, keeping prices lower.

I'm worried about the risk to the tax payer here too.

Initially it will mean up to £30 billion in extra revenue for the treasury but since the property market is overvalued and when it collapses as it inevitably will then the losses will be immense. It is the same for QE. The bank of England are logging profits of £40 billion from QE but once interest rates rise the losses will be well above £100 billion. And guess who gets to pay for that? The tax payer is being sacrificed again to save the banks, just a lot more subtly. All this scheme is for is to boost home values in a very thin market so the banks balance sheets look good.

Actually they will make a few hundred million http://www.bbc.co.uk/news/business-24427274 not Billions so in general goverment spending terms chicken feed
Also house prices will not crash esp not in the SE (where this scheme is mainly aimed at) as there is and will be for a long time a high demand and not enough supply
Even after the crash of 2008 house prices in the SE just stagnated and have already overtaken the 2008 prices

Yes in the south east prices are back to peak levels and London is well above it. The revenue was based on a fee on the entire loan so that was why it was higher. The problem is that wages are not keeping pace with house prices so Loan to income multiples are getting unaffordable again. It will not crash overnight. It could be years but they are still unaffordable for most people.


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While I agree on the unaffordability at least the multipliers (as far as I can see) are staying around the x3 – x3.5 of Sal and cant (after a very quick look) find anywhere doing the x5 / x6 / Self Certification mortgages that caused most of the issues

Option 1: Get a job not in the SE (easier said than done in some industries)
Option 2 : live in a shed

Options 3 buy something ex-council

See option 2

As long as multipliers are fixed at 3 times salary then the real issue is will there be enough high earners being able to buy who need a deposit? Where I live prices are ten times average earnings and that is unsustainable. The problem is that so many people are using their homes as a pension that as they come to sell there will be few who can afford to buy.