Corporate DispatchPro - - Di­plo­ma­tique.Ex­pert Meets... -

mortgages at fixed in­ter­est rates, and then sell­ing those loans to in­vestors seek­ing long-dated re­turns, such as pen­sion funds. Yet this mar­ket is untested.

The quick­est fix would be for the gov­ern­ment to step in by pro­vid­ing guar­an­tees. Un­der John­son’s pre­de­ces­sors, David Cameron and Theresa May, the Bri­tish gov­ern­ment guar­an­teed over 270,000 “Help to Buy” mort­gage loans in which the gov­ern­ment takes the risk on the most vul­ner­a­ble slice of a 95% mort­gage.

Like all gov­ern­ment in­ter­ven­tions, “Help to Buy” can push up house prices. There­fore, any new mort­gage sub­sidy will have to go hand in hand with a sub­stan­tial house-build­ing pro­gramme. Ideally, cheap loans would only be avail­able on new prop­er­ties. That would make it harder for John­son to achieve his 2 mil­lion tar­get, but it could still be a step for­ward.

Newspapers in English

Newspapers from Malta

© PressReader. All rights reserved.