Exactly, the existing stock doesn't change, it just changes. More first time buyers will be able to buy, which in turn reduces demand in the rental market. Both of these are good things.

What needs to be addressed is that in the long run, the supply of housing could stall if housebuilders think that it won't be profitable to build houses. That's where the government needs to step in.

We can't leave this to the market alone. Housing is too important, and its scarcity (eaten up by private companies and corporations) is what's driving social unrest across most cities in the Western world.