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The Public Accounts Committee is accusing the government of violating Treasury guidelines by going ahead with the Help to Buy scheme without assessing whether it was the most effective way of helping the housing market.

The PAC - an influential committee in the Westminster bubble - says the government has committed spending up to £10bn of taxpayers' money without identifying whether Help to Buy will achieve its objectives.

"The Government has yet to demonstrate that the Help to Buy scheme provides value for money, says Margaret Hodge MP, chair of the PAC.

The Department for Communities and Local Government will not carry out a comprehensive evaluation of the scheme until 2015, by which time billions of pounds will already have been spent she says.

Hodge beleves that evaluation must look at whether HTB actually helped more people buy, whether more houses were built than they otherwise been the case, and whether the scheme had a detrimental effect on house prices.

Housing minister Kris Hopkins has dismissed the criticism, and has rounded on pundits saying there is a market bubble in the making.

I have spoken to people here and they don't believe we are anywhere near the house prices of pre-crash. Lots of people have invested in housing and want to see that return, and this will give them confidence as prices grow in a sustainable way he says.

Hopkins says it is crucial to distinguish between the housing boom in London - where the average price is now £485,000 and one in 15 homes are now selling for £1m or more - and those outside the capital.

There are lots of different markets across the UK, he said. In London, where the narrative is, prices have always been high. I am sure in Plymouth they have not reached pre-crash prices and they are not expected to until 2017-18.

Comments

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    It seems as though the PAC haven't really thought this through. What a shame that they have to waste taxpayer money before they evaluate their scheme!

    • 20 June 2014 11:12 AM
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