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Osborne's Help To Buy scheme labelled moronic

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One of "the most stupid economic ideas of the past 30 years". That was the verdict on George Osborne's plan to boost the housing market through the state underwriting mortgage lending. This was not a piece of cheap party political invective cast across the House of Commons either; it came from a leading City analyst at Societe Generale.

The Help To Buy scheme, whereby the government will guarantee lenders with up to 20 percent of a mortgage, was an attempt to help potential buyers onto the property ladder. It came in for extensive criticism for propping up inflated house prices, but the comments from analyst Albert Edwards went much further.

"This is madness," Edwards said, angered by a scheme that he claims is designed to encourage young people to take on huge debts in order to buy overpriced property. "Why don't we call this policy by the name it really is," he added. "Namely the indentured servitude of our young people".

He pointed out that elsewhere in the world, property had become affordable because of the recession. In the UK though, property remains overvalued, thanks in part to Osborne's willingness to subsidise purchases.

"I believe it truly is a moronic policy that stands head and shoulders above most of the stupid economic policies I have seen implemented during my 30 years in this business," Edwards said, delivering quotes that will be manna to Osborne's numerous critics.

Even Sir Mervyn King, the outgoing governor of the Bank of England, might join their ranks, concerned that the scheme amounts to the government underwriting mortgages."We mustn't let this scheme turn into a permanent scheme," King said. "When is the right time to terminate it will depend on economic conditions at the time."

Help To Buy is of limited advantage to would-be borrowers. The scheme might make it marginally easier for them to borrow money, but it also means that they are paying tens of thousands more for a property than a rational market would dictate.

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