The policy is also unlikely to help with very low housing supply, Fitch says that the "impact on the number of new homes built is less clear". House builders stand to benefit, but as a result of "rising house prices, rather than increased volumes".
It is not yet possible to gauge the likely take-up of the scheme, despite the willingness of most lenders to participate, as affordability tests may filter out a high proportion of applicants. Furthermore, the full details of the scheme, including the fee to be paid for the guarantee have not yet been disclosed.
This morning Halifax said that house prices rose by a larger-than-expected 0.9 per cent in July, while Nationwide reported that they rose by 0.8 per cent in the same period earlier this month.
The IEA's Kristian Niemietz has argued in City A.M. that while Help to Buy is troubling, the restrictions on creating new housing stock are a bigger problem. Help to Buy seems not to be helping to increase this supply.
Credit subsidy schemes are definitely not the solution, but neither are they a big part of the problem. The problem is a combination of a restrictive planning system and well-organised nimbyism. These make it impossible to build sufficient quantities of new homes in the places where the demand is.