A Solution For First Time Buyers?

[Milton]

If houses become affordable again yes there would be no real point in keeping the development trust going . If they don't then anyone who buys one now and is forced to sell it back at a reduced price in ten years will still be priced out of the housing market.

Yes. Im assuming certain things.

Like for instance there would be enough land banks to make this scheme available for all FTB's.

And that building that many houses would cause house prices to drop in value anyway.

But if that didnt happen, which would be unlikely given such an injection of supply, obviously the trust would have to guarantee a fair 'open market' value after ten years.

The entire point of this would be so FTB's could get onto the ladder now. [And begin to accumulate capital. Instead of renting for another ten years.]

[_w_]

Wow! Land seizures to back borrowing!

Is it 18th century france again aleady?

Spot on.

Unfortunately in this particular instance, we have a rule of law that would make it impossible.

[Milton]

thats interesting...why are they in hard assets like this?..bit illiquid for a bank that might need cash sharpish...even ignoring the 2007 crunch....surely the function of a good bank is to match capital with wealth creators...not store up speculative chunks of the UK.

Are you sure its not pension funds they run that have these tracts?

An article I read in the scotsman, stated a local authority in Scotland has agreed to sell land to a housebuilder for the nominal price of £1 in exchange for £19,000 for each property sold.

And 'state owned' bank's like Lloyds will be asked by housebuilders to 'give away' land to developers.

He said the scheme should appeal to banks such as Lloyds Banking Group left holding vast tracts of residential and commercial land banks following the collapse of several housebuilders and developers during the recession.

http://business.scot...erty.6729030.jp

[There' was another article, on iii.co.uk or LSE..about the particulars on the land banks..Ill find i and post it...]

Edited March 13, 2011 by Dan1

[miko]

Yes. Im assuming certain things.

Like for instance there would be enough land banks to make this scheme available for all FTB's.

And that building that many houses would cause house prices to drop in value anyway.

But if that didnt happen, which would be unlikely given such an injection of supply, obviously the trust would have to guarantee a fair 'open market' value after ten years.

The entire point of this would be so FTB's could get onto the ladder now. [And begin to accumulate capital. Instead of renting for another ten years.]

There is enough land .

If they built enough houses yes in real terms I think prices would drop , one reason is that if people started buying their first home at say 25 the BTL lot would not be interested in hording housing.

Another thing I would like to see is , and this is mainly for those in the south east and London is that the global rich should be stopped from buying up property in the uk and keeping our own FTB off the ladder.

[Bloo Loo]

An article I read in the scotsman, stated a local authority in Scotland has agreed to sell land to a housebuilder for the nominal price of £1 in exchange for £19,000 for each property sold.

And 'state owned' bank's like Lloyds will be asked by housebuilders to 'give away' land to developers.

http://business.scot...erty.6729030.jp

[There' was another article, on iii.co.uk or LSE..about the particulars on the land banks..Ill find i and post it...]

IC..well observed.....of course, they are probably reticent to sell these landbanks as they probably show up on their securities as Market value of x, whereas, as you have discovered, they are worth 0p on the £.

A sale would value the land and therefore the landbanks and they would have another capital ratio disaster....I fear the same scam is being perpetrated by Spanish banks....definitely in the US.

Of course, continued lying covers this up...but the reality is, while bankers doing this appear to have valuable empires to fall back on...they dont in reality.

[Milton]

Just updating the Forum.

Letter Sent to Grant Shapps and the Minister's response posted:

I will post Grant's further response when I Receive it.

Also, please do copy and paste this email to your local MP.

I think it is important that we all 'educate' our backbenchers that there are solutions for First Time Buyers.

Find Your MPs Email Address

Grant Shapps

Member of Parliament

Minister for Housing.

Minister,

Raising Capital Gains Tax to the same level as income tax, and raising Interest Rates, was the litmus test as to whether the government was committed to tax changes that spread the pain of deficit reduction fairly. [same as happened under Thatcher.]

You have completely failed to do this.

But surely If any government were serious about helping FTB, there are many ways in which you could make houses affordable for us again.

One way would be to award FTB with cheap land.

State Owned Lloyds Banking Group have been left holding vast tracts of residential [and commercial] land banks.

What is to stop the Government *retaining these vast tracts of residential land from Lloyds and selling them to FTB for a vastly reduced rate?

Giving/Selling Cheap Land to FTB should be more politically acceptable to the government than a 50% + House Price Crash occuring.

[Everyone already knows that for houses to become affordable once again, a 50% + crash, must occur, but it seems they intend to draw it out over ten years. Stochastically speaking, the ten year cycle seems likely.]

[However that leaves FTB working for another decade for nothing. Which is completely unacceptable. That would be over 20 years working for nothing. No capital. Forced to pay off someone else's mortgage and retirement. Already forced to waste tens upon tens of thousands in wasted rent. ]

[There are historical precedents for states giving away land, or selling it cheaply, to their citizens, for different reasons, in a number of countries]

Now would be the perfect time to consider it. Whilst the government own a stake in Lloyds, who hold huge land banks.

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The government could set up a Development Trust for First Time Buyer's. Allowing just One FTB to buy just one plot of land, from Lloyds Land bank, for a vastly reduced rate, [60% off current land values.]

With the caveat that each FTB must borrow from Lloyds, to build a house on their plot. The Trust could include a clause which states that FTB'er's cannot sell the land/house for ten years. And then only back to the Development Trust for a fair market value.

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Consider:

It would spread the pain of deficit reduction more equally, whilst still letting the air gradually out of the housing bubble. [House Prices rose threefold over ten years]

The gov's intention must not be to turn a profit……[Hence setting up a Development Trust.]

In one fell swoop the Coalition would win a lot of voters back on side. And it would not affect homeowners as much as an outright crash would. The House Building Industry would also be kickstarted.

Lloyds cannot sell their land anyway. This solution would be much 'fairer' and preferable to the millions of Lloyds shareholders, than governments plans to give away Lloyds shares for free indiscriminantly.

Lloyds could supply the mortgages for all the plots, via the trust, to FTB's.

Lloyds, in defiance of the monopolies commission, hold over 33% of UK mortgages.

Instead of giving away Lloyds shares to everyone, the government should be seeking to redress the balance in the housing market, by spreading the pain of deficit reduction more equally, between those who own property and those who do not. Especially considering it was systemic fraud which fuelled high house prices, resulting in a threefold increase for over ten years.

Surely this would be a much Fairer democratic balance, and a more equal spread of deficit reduction, than stealing FTB money to bail out Lloyds?

[FTB, are paying to keep 'everyone else's' property massively overinflated, ensuring FTB'ers can never afford their own property, and remain in 'debt slavery'. Why should the people who do not own property be forced to pay to keep Lloyds properties massively overinflated? Its ridiculous and criminal]

Whats stopping the government from doing this?

Surely this is a win win solution for the government? And it's a much more democratic, 'fairer' solution.

[Any agreement would also have to entail relaxed planning, for those who wanted to build Eco/Straw bale/Cob style houses. Which have been built in the UK for centuries. And are cheaper to construct]

-----------------------------------------------------------

Rough Cost Estimate:

Development Trust Land: £200k

House: £50k

Present Open Market Value: £250k

FTB pays a 60% reduction on the land value: Borrows £130k from Lloyds. [£80k for land £50k for house.]

House Prices are manipulated to drop by 50% over 10 years.

So that £250k house is now only worth £125k

Tenth year, the Trust pays the FTB the going market rate, 'or' allows the FTB to sell on the open market for the going rate of £125-£130k

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It's a simple enough concept. Sell FTB land cheaply. [but do not allow FTB to sell it onto anyone else.]

As the government gradually deflate's the housing bubble over the next decade, to become affordable once again, the prices of the trust's house's will gradually meet them.

[Hence FTB cannot sell for ten years, for a 'quick profit'.]

Another ten years forced to work for nothing, as a direct consequence of government sponsored theft and fraud, would be like a life sentence.

Sincerely

Daniel *****

Response From Housing Minister, Grant Shapps:

Dear Daniel,

Many thanks for your email. I just wanted to let you know that I've received it and will be getting back to you with a more detailed response shortly. Please note that my further response will come from my departmental email address. So if you have any email or spam filtering set up on your inbox then please ensure that any messages from @communities.gsi.gov.uk are allowed through (or whitelisted) If you would like to follow up on your email, you can speak to the correspondence team on 0303 444 4260.

Warm regards, Grant

The Rt. Hon Grant Shapps MP

Minister of State for Housing

Edited March 16, 2011 by Dan1

[Milton]

......

Edited March 17, 2011 by Dan1

[Milton]

......

Just wanted to add to this thread that IMO Grant Shapps does not give a f@rking monkeys about helping FTB's onto the property ladder.

[The message I received, is an automated message. It does not mean it was even read.]

The only thing he is interested in is transferring debt onto FTB's via such schemes as shared ownership, or helping hand.

I called the number above, and it is manned by a bunch of civil servants.

Conclusion is that after much research, the coalition, Tories, Lib Dems, Labour, are all worthless shits Im afraid.

I waited for ten years for some justice.

None of them have FTB's interests at heart.

IF YOU ARE A FTB, DO NOT VOTE LIB DEM, CONSERVATIVE, LABOUR IN 2015. NONE OF THEM WILL HELP US.

I THINK IT IS IMPORTANT TO PUSH THIS MESSAGE FOR THE NEXT FOUR YEARS.

Edited March 22, 2011 by Dan1

[Milton]

Response Received from my Conservative MP:

Dear Mr ******

Thank you for your email.

The point I was making was that this Government could not unbail out the banks once it had already been done which you seem to appreciate in your latest email.

House prices are governed by supply and demand. The best way for the Government to help reduce house prices is to get a proper grip on immigration which has had a huge impact on the demand for housing over the last decade. With regard to selling land to first time buyers at a reduced rate, what happens when the first time buyer wants to sell up – are they left with the capital gain they were bequeathed? If so is that fair on other people in the country?

Ultimately I believe that these matters are best left to the market, and the Government support being given through reducing demand for housing. However there will not be many first time buyers if they are faced with the prospect of huge falls in housing prices as you wish to see.

Best wishes

************

MP

Edited March 23, 2011 by Dan1

[Saberu]

Will never happen, land and property prices dropping is the last thing the boomer generation (who control government and big business) want. They will let inflation rip before they let the housing crashing we want so badly occur.

The house price crash IS happening right now, but in gold not sterling

The question is how far are they willing to push it, will they risk hyperinflation instead of allowing a HPC.