Help to Buy - An obsession with the housing market.

It could be good or it could be bad, who knows? But what we do know is that we as a country are obsessed with the housing market linking it dangerously close to our economy. A house price is seen as a filler in our money bags and shows our wealth increasing year on year. What could possibly go wrong?

Though I ask, have we or do we ever learn from our previous mistakes? Hindsight is clouded in our minds as we forget the years before and see our houses as the knight in white armour coming to pull us from sluggish growth into the boom era again. It seems we have forgotten the credit crunch already and the real root of the cause of it. Our houses as bloated as our minds and our pockets with hypothetical cash fuelled our buy now spend later mind-set.

Although,  you may ask why would encouraging growth in the house market have a negative effect on our economy and what lessons should we have learnt from the credit crisis? Well firstly, in the pre-crisis period the housing market was at its prime with house prices or value skyrocketing each year. This then led people to an illusion in which they think they had more money because their house was worth more. As a result, people had the opportunity to borrow a vast amount of money for personal consumption whether it be reinvestment into their property or general spending. People in all countries were high on getting more than what they earn.  However, while it was easy to spend it was less easy to pay and when the repayments came in the sweet turned soon sour. Their houses devalued, the market drained, pay cuts, pay freezes and redundancies meant they paid the price for easy cash.

So why would help to buy scheme's be a bad thing? While I'm not saying it is a bad thing to help people to buy their own home, it is a matter of wrong timing. Our economy is heavily bloated by the expansion of the housing market which has been clearly shown is and always has been extremely fragile. It is an addiction we have and a short term fix to our economy that we need to be less dependent on. Therefore, we should be addressing other factors of our economy whether it be jobs, education or infrastructure if we are to build a sustainable economy.