Wednesday, Jul 11, 2007
Brown comes out on policies
FT.com: Brown to rethink property developers’ tax
Gordon Brown on Wednesday in effect ditched government plans for a tax on property developers, saying a bill for a planning gain supplement would be introduced provisionally while ministers sought a better alternative.
Mr Brown put a drive to provide more affordable housing at the centre of his legislative agenda, promising a total of 3m new homes across the country by 2020. He also pledged to increase the annual housebuilding target for England by 2016 from 200,000 to 240,000.
The Treasury is to consult on a new regime for “covered bonds”, which would make it easier for mortgage lenders to provide more affordable 20-25-year fixed-rate loans, he said.
Posted by dohousescrashinthewoods @ 04:17 PM (194 views) Add Comment
2 Comments
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1. tipping point said...
Does anyone know what is meant by "covered bonds". Are these bonds where the government ie the tax payer covers the risk?
In addition won't the effect of introducing a planning gain suppliment tax and telling everyone it's temporary just have the effect of limiting supply of building land until it's reprieve. Protectionist practices like these would make a mafia laundry owner blush.
2. confused76 said...
covered stands for "secured". There is the security of the collateral (the house) but these are the standard mortgages. i think it is some sort of "state financial engineering" a la Freddie Mac whereas the cost of very long term loans is not so determined by the market of corporate debt
http://www.freddiemac.com/
the downside of that (for the borrowers) could be much more regulation to ensure responsible lending.
But still it escapes me where Gordon is trying to go with this. No way any product can be launched to beat Abbey's introductury rates on trackers. So "affordability" is going to go down in the short/medium term. Gordon is talking about a solution for the next 20 years. Does he want to subsidize ftb's now? Can he? If he increases public spending, kiss currency goodbye