IMF slams Help To Buy
The IMF echoed earlier warnings from Sir Mervyn King and the Treasury select committee that the scheme will raise house prices rather than improve access to housing.
To mitigate the issues the IMF believes the scheme could create it has recommended penalties for land banking.
Karelia Scott-Daniels, managing director of Manse & Garret Property Search, said: “The IMF has expressed the concern, held by many others, that the Help to Buy Scheme could backfire in dramatic fashion.
“There’s no doubt that the Government’s solution for the property market could prove to be the problem over time.
“Weak supply will naturally accentuate the situation. The weaker supply is the higher prices could rise preventing even more people from getting on the ladder.
“Even if supply improves, property values are likely to rise further pricing many people out of the market in the process.
“The property market appears to be recovering of its own accord without the need for further artificial stimulus in the form of Help to Buy.”
The Chancellors’ Help To Buy Scheme was a centrepiece of the recent budget and has controversial since its launch.
The Chancellor said he welcomed the IMF’s report but insisted his economic plan was working.
He said: “There are no easy answers to problems built up in the UK over many years. It’s a hard road to recovery.
“Of course there is further to go – and we have to go on confronting the difficult choices to help our economy to heal.”