Friday, Jan 16, 2009
What could possibly go wrong?
BBC News: Mortgage rescue plan is extended
Under the scheme, the housing associations will buy homes after the market price at an independently assessed market price. Successful applicants will remain in their property either as tenants on "affordable" rent, or as owners after receiving a loan from a housing association. It is intended that once their financial situation improved, the householder could pay back the loan in part or full.
Posted by quiet guy @ 08:22 AM (977 views) Add Comment
16 Comments
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1. phdinbubbles said...
In the words of Rick in Casablanca: 6000 households don't amount to a hill of beans in this crazy world
2. Orcusmaximus said...
Wow. For once a sensible scheme! Take up would be limited to vulnerable families (young children/disabled/OAPs), and it wouldn't be something for nothing. I fully approve of this scheme.
3. inbreda said...
It also leaves those stupid enough to buy at the peak of the market out to dry, rather than bailing them for being stupid. Thumbs up. Particularly because it won't stop the slide in house prices.
4. gardeniadotnet said...
"independently assessed market price"
How can this be done properly during an accelerating house price crash?
5. monty032 said...
Get the calculator out. A £200m scheme divided among "up to 6,000 households" means £33,333 per household. In most of the UK you can't even buy a studio flat for that. A more realistic price of £100,000 per house means 2,000 households saved. It's a drop in the ocean and simply more Government window-dressing. Luckily they just don't have the money to save the housing market.
6. it_is_going_with_a_bang said...
6000 is a drop in the ocean.
"The scheme is targeted at families with small children, households with a disabled member, pensioners or those deemed "vulnerable" in another way. "
The point being that these people would qualify for a housing assistance if they did not have a home.
So one way or another the taxpayer would be funding their housing anyway would be one point of view.
£200 million is not a lot of money in the over all scheme of things.
7. will said...
Clearly the 'right to buy your council house' experiment has failed.
8. Sold My Soul To The Never Never Never said...
Call me cynical but New Labour is so obsessed with statistics that this is nothing to do with keeping people in their homes but putting a lid on repossession figures so that they do not go as high as they did in the last recession.
9. Imminent_plunge said...
BBC don't seem to want to accept comments though ostensibly offering them
10. Charliesays73 said...
200 million will be the first phase, they will come back for more once its run out, and more after that.
However this money will be leveraged say by 10 and controlled by one of our newly nationalised banking entities possibly guaranteed by the taxpayer as well. What is worse is that taxpayers wont even see any of the upside once inflation kicks in and the houses are once again the darling of dinner party conversations.
THis is a ridiculous idea, once its started it will be difficult to stop and what is wrong with the existing welfare system, which if they are vulnerable will be able to help them.
Trying to prop up the market is not the solution and will just delay the day when the market eventually bottom out, in the mean time we will be on the hook for millions of pounds that are about to be debased further by hairbrain ideas like this, it is malinvestment every way you look at it.
200 million is around £4 for every man, woman and hermaphrodite in the country, that is a huge amount of money when you dont have any. FFS
Sorry about the ramble, its been emotional.
11. inbreda said...
@8 - I think that particular milestone has already fallen.
12. p. doff said...
Won't a lot of people who are facing repossession be in negative equity? If they 'sell' their house to a housing association at the current value, what happens to the rest of the debt?
13. stillthinking said...
will @7,
I don't see that the "right to buy" experiment has failed. The whole point of right-to-buy was that council tenants were in a position of paying rent over their lifetime that exceeded the value of the property i.e. rip off. At that time it was extremely difficult to get a mortgage for a private purchase.
Certainly events have moved on and right-to-buy is stupid during a bubble, there is nothing intrinsically wrong with the idea. Consider the situation that existed in the UK not so long ago, a tiny proportion owning all the land, the rest of the population with no other choice to but to rent. In other words, land ownership had been successfully cornered.
Right-to-buy was an attempt, which may well have failed recently, to remove the extensive ownership of land by the state, a move which is now being reversed. Personally, it sticks in my throat that rents are artificially supported through my taxes.
I think that state involvement in land ownership should be restricted whenever possible, the role of the state should be to -regulate-, not own. Look at what a disaster is unfolding from the government attempts to mitigate the house price falls for purely political reasons.
BTL was never regulated, as a result, some areas with infrastructure suitable for families became relegated to transient renters, leading to school closures (all family houses converted). What a mess !
Council tenants shouldn't be able to buy the property where they live ?!? Why not ban private ownership of land altogether? Also you are suggesting a rule for others that I doubt very much you would like yourself.
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15. shipbuilder said...
Stillthinking, the fact that land is privately owned and that all of the benefit from that land goes into private hands is a major reason for the wealth inequality in this country and other countries, the reason why we tax and restrict economic activity instead.
If you agree that the people of a country have a natural birthright to the land and the resources contained therein, then surely either state ownership and rent or a land tax is the only just way of raising revenue for public services, that then go to enhance and increase that land value. Privately owned, non-taxed land is subject to non-productive speculation, as we have seen in the housing boom - the land value that should be for our common use ends up in the pockets of the rich, while our infrastructure etc. is underfunded.
16. stillthinking said...
I see nothing wrong with land ownership. I don't equate land ownership and inequality. Actually, I agree with asset based taxes. I broadly agree with LVT as well. I just, personally, have this sad pathetic hope that one day I won't have to pay the government or the bank and I will be free.( I don't count poncing off the NHS when I am sick in this !)