“Depressed, excluded, hopeless.”
That's how 29-year-old Meg Jorsh reacts as she peers through the shop window of a realtor’s office in London looking at the houses and apartments for sale.
“I’m not broke. I’ve got a job. My partner has a job. We’re reasonably well paid. But there is no chance that we'll ever be able to afford to buy an ordinary home in this city,” she says.
Like hundreds of thousands of other Brits, Meg and her partner can’t get a big enough mortgage because lending standards are too tight here. And they feel like they're being priced out of the market by landlords buying property to rent.
But the government says it is riding to the rescue. Finance Chief George Osborne is extending a plan called 'Help to Buy,' offering homebuyers an interest-free loan worth up to 20 percent of the purchase price of a property.
The government hopes that this will allow more people to get their foot on the first rung of the property ladder.
Real estate is the single biggest item of household wealth in Britain -- so the hope is that the plan will boost the British economy.
But Britain’s economic recovery is already gaining momentum, consumer spending is up and house prices have been rising at their fastest rate for seven years. In London -- already one of the world’s most expensive real estate markets -- prices are up 8 percent over the past year.
"There isn’t a single economist that I’ve spoken to, who thinks that the government’s current scheme, 'Help to Buy,' is a good idea," says author Shiv Malik. "As everyone gets in on this taxpayer-funded bonanza, house prices will rise and a lot more people will be left behind."
Critics say the government is setting up another house price bubble which will inevitably burst and this time taxpayers will be directly underwriting billions of dollars worth of home loans.
"The idea that the U.K. would now be picking up the same kind of a scheme to my mind is simply bonkers," says Gillian Tett of the Financial Times.
She describes it like a re-run of Fannie Mae and Freddie Mac in the U.S.