Is the chancellor’s mortgage plan a help or a hindrance?

Did somebody say “populism”? As part of her “Leeds reforms” to financial services, the chancellor wants to make it easier for first-time buyers on relatively modest incomes to own their own homes.

- SEAN O'GRADY

Echoing the complaints of a generation of younger people, Rachel Reeves argues that tenants shouldn't be helping other people to pay their mortgages through exorbitant rents, and instead could be making themselves more financially secure in the long run. It all sounds very appealing, but there are problems, too...

What does Reeves want to change?

She wants to allow banks and building societies to lend money at 4.5 times a person's income, whereas the norm was once about two to three times, and to lower the minimum salary qualification from £35,000 to £30,000 per annum. She will also make permanent the government's mortgage “backstop” guarantee scheme, which protects banks from default. The Bank of England is also ready to permit the banks to make riskier loans.

Who is it designed to help?