Mr. Robert Nicholson:

As we said, the detailed criteria have to be finalised, but we can give the shape of our thinking. On both affordable purchase schemes, it is intended that they would be targeted at those who can afford the home with the equity stake. If one is in a position where one can afford any home that is made available, depending on the area, through a standard mortgage, one is not eligible. If someone is on an income level where he or she cannot afford to buy that home and it is a home that is suitable for his or her needs - they are all modest - he or she is in the space of being eligible, if the equity stake that is available can bridge the gap. They are the general criteria. Measures on affordability can be very blunt instruments if one gives a straight percentage, so what we suggest is that we try to develop the schemes around the individual. We say affordability is not a question of how much, but how much is too much for whom and in what circumstances. That is the broad model we are trying to use in the affordable purchase schemes.

On cost-rental, again the criteria are not finalised, but the likely lower threshold will be those who are not eligible for social housing, somewhere around the space of middle income earners just over the gap. We have not fixed on the higher threshold. Obviously, it is going to be informed by the ultimate rents, and the rents are informed by the cost of construction and the level of subvention provided. However, we can explicitly say that it will be hard-pushed middle income earners.

I wish to clarify the affordable purchase scheme and some of the references earlier to the UK. It is important to say that the affordable purchase scheme, at present, would probably only assume approximately 1% of the transactions in the market, and perhaps a little above.

Compared to some of the other schemes it is relatively low in terms of its capacity to impact on inflation more broadly. If it is only 1% of housing transactions per year or a little over, it is relatively low. I can comment more on the UK scheme in terms of the 1% figure. The people referenced were explicit around the inflationary effect being 1%. In fact, when they looked at it in detail, they referred to some of the other published reports that analysed the help-to-buy scheme. They commented that those reports referred to inflation rates of between 5% and 20%. They looked specifically at those reports and found that the estimates did not compare similar properties and so did not accurately assess any additional premium paid by those using the scheme.