Balls fury over house subsidy

Responding to Wednesday's budget the Shadow Chancellor warned that the government's Help to Buy scheme, aimed at first-time buyers looking to get onto the property ladder, will be hijacked by the rich.

He said the scheme had been thrown into "absolute confusion and chaos" after critics pointed out that buyers looking to purchase a second home worth up to £600,000 will be able to take advantage.

Help to Buy will offer shared equity loans for new-build homes as well as government-backed mortgage guarantees to help people struggling to raise a deposit on a property.

Support will be made available to those who can find a 5 per cent deposit of the value of a home worth up to £600,000, which the government will back with a loan worth up to 20 per cent - repayable when it is sold.

Mr Balls told the Chancellor: "Not only are you pressing ahead with a tax cut for millionaires, it now seems your mortgage scheme announced today will help people no matter how high their income to buy a subsidised second home worth up to £600,000.

"From what I can see so far, the government is basically saying that if you have got a spare room in a social home you will pay the bedroom tax but if you want a spare home and you can afford it, we will help you buy one."

He pointed out that the "spare-homes subsidy" would be on top of the tax cut for millionaires averaging £100,000.

"Surely people struggling to get a mortgage, those people who want to get their first home, they should be the priority for help not the small number who can potentially afford to buy a second home or a buy-to-let home," added Mr Balls.