Sunday, Apr 19, 2009
Darling wants to use our taxes for mortgages
Guardian: Chancellor's £50bn home loans boost
At a time when public finances are in an absolutely wretched state, the government is proposing to commit £50,000,000,000 of public taxes to try to boost the mortgage market. Darling appears to be trying to wrest the title of the UK's Worst Ever Chancellor away from Gordon Brown and the government is showing its contempt for savers. This must be one of the worst ideas NuLabour have ever come up with :(
Posted by quiet guy @ 06:08 PM (2423 views) Add Comment
26 Comments
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1. paul said...
Let's be blunt - out and out lies are not beyond the morals of our banks when it comes to reporting house price movements but when they do so, they are effectively spending their indices' credibility.
With that in mind, the only thing that will convince potential buyers to part with their money is when house prices start rising 'proper' (not statistical bumps due to small numbers blips but concerted rises). Buy to let is risky and will, in general, be largely avoided by mutuals not wishing to damage their fragile current ratings.
So that leaves first time buyers who are still not interested in coming to the table - in this game now, first time buyers are the only players too. This means that the £50bn of our cash paid in tax can't easily be spunked on the housing market. It's the transmission mechanism again.
The wildcard is the government owned banks, but they needn't be so. If Northern Rock starts offering cheaper mortgages than everyone else, the other banks/mutuals can legitimately cry foul to the EU Commission, and the IMF will almost certainly take a very dim view of the government directly intervening to protect prices in an industry against the interests of its consumers just so the government's tax funded streetparty can get going again.
This of course, is why Labour will be bailed out by the IMF eventually. They are incapable of self-restraint and refuse to call time on their spending habits of recent years. The IMF will call time, and will set out a very stringent ruleset to ensure their loan is repaid.
I doubt that tax revenue from taxpayers buying and selling houses to each other will be a part of that plan.
2. house said...
What I do not understand is that there are motrgages available but the amount the banks are willing to lend compared to the value of the property is a problem because the banks feel that the property is over valued and has further to come down. That is the problem. Perhaps what the government is hoping for is that by propping up the property market means that the prices may not come down means that the banks can lend without the fear that prices are going to come down so that the loan is better secured. Whatever way you look at it, it is inflationery and ultimately it will have it's consequences.
3. house said...
Paul do you honestly believe that other financial institutions would call foul to EU. Also will IMF get involved in it as the NU Labour do not appear to understand fair competition but their own interest. They are so worried of the next election means they will do anything to try to win.
4. taffee said...
underpinning markets is lunatic....our kids are financially alienated as we talk
low interest rates and debt caused the problem....so the solution surely isn't more debt?
brown just wants to get re-elected....zimbabwe here we come
5. Philip9134 said...
So 50bn pounds is given to the banks when that is gone what next, another 50bn. How long will it take before international investors look upon the UK in the same way that the UK looks at Zimbabwe. This may appear a little over the top however, it was not that long ago that Zimbabwe had a thriving economy.
6. uncle tom said...
Before getting too hot under the collar, try reading Matthew Parris in The Times yesterday:
http://www.timesonline.co.uk/tol/comment/columnists/matthew_parris/article6115437.ece
In case you can't be bothered, he highlights how GB's high profile promises generally come to nothing, and how we can expect a little clutch of empty headline grabbers as we wait for the budget speech..
7. flintster1994 said...
Does anyone honestly believe that within our current system of democracy/government, that any other party will make one iota of difference?
We need a new age of modern thinkers to come to the fore!
8. This comment has been removed as it was found to be in breach of our Blog Policies.
9. jackas said...
At any cost
10. mytimeisnigh said...
@ watchingthewheels2, that is the seventh time you've said 'whoops....wrong comment to wrong article...sorry' and I cannot remember you ever making any other comments. You're obviously not sorry, what on earth's on your mind.
11. mark wadsworth said...
The 'other' party, i.e. The Tories, will not say a word, because they need the home-owner vote as much as Labour, so they will not speak out against these lunatic measures to prop up house prices.
Also, let's not forget that most MPs own two or three homes, so for every £1 that house prices fall, they lose £2 or £3. That's why they are so desperate to keep the bubble inflated.
And that's why every £1 fall in prices fills me with two or three times as much malicious glee.
12. it_is_going_with_a_bang said...
Darling will struggle a whole lot more if he thinks he is going to get banks to pass on cuts to borrowers.
Banks now need to be 'seen' to be making good money and good profits with their products.
The policy of limiting lending to reasonable mutliples of salary and some LTV is what is killing the marklet - as indeed it should.
The money is there and people can borrow - just reasonably.
I can remember a rather smug Gordon Brown harping on about lowest interest rate for 30 years some years ago when property was just getting really out of hand. Instead of seeing this and putting in measures to "stabilize" the economy the opposite happened.
The country is in a bad way because of record debt and an inability to basically pay for it. The solution is apparantly borrowing more money. That is not a solution - this was always going to happen. Gordon's miracle express train was always going to run out of track, time and ultimately money.
13. alan said...
If the House Price indices start showing rises, then the fish will start to bite! The next housing feeding frenzy is not far away, the vanguard of the movement (Times, BBC) are sure to show encouraging headlines and the housing bubble will re-inflate.
One thing which will be missed out of the ramping is the current low interest rates. No mention will be made of potentially large rises. When IRs go up many people will be caught out and end up wage slaves forever.
This is a nasty trick by the manipulators in this country, played upon an unsuspecting public. Do our MPs care?
14. timmy t said...
"I am concerned that as we move into a housing market recovery, we make sure that there is the availability of funds for people to get mortgages," That's OK then - by the time we move into a housing market recovery, he won't be Chancellor.
I was listening to 5Live a few days ago, they were talking about teachers pay rises. If things like this actually happen, the time will come when we have no teachers or nurses - they just won't be able to afford to live unless this bubble is allowed to burst.
15. amjidk said...
surely 50 billion can't prop up the housing market??
16. Enoughalready said...
@13 TT - Teachers and nurses are doing very nicely, thank you. It's the private sector workers (not the banker types btw - but the factory workers etc) who are going to be completely priced out. Many have already lost their jobs - let alone had pay rises.
I fully agree that it is criminal that the already super-inflated house prices are being encouraged to rise yet again. The bubble should be allowed to burst - for all our young first time buyers' sakes.
17. enuii said...
Two horse party politics is ruining this country, the worse thing people do in this country is let a political party have more than two consecutive bites at the cherry. NuLiebor are now that deeply entrenched and so ethically bankrupt that they will run this country into an economic abyss to retain power rather than do what is right for the country as a whole.
Power corrupts and we are witnessing it at a grand scale and at our long term expense to boot as the current bunch do everything in their power to make this country a single party state.
18. amjidk said...
@ enuii -i think i'll vote for the lib dems, nuLab and the Tories are two cheeks of the same backside...
19. hpwatcher said...
It's a Labour gamble.......these ****s are going for broke......it's going to be all or nothing.....
20. general congreve said...
That's it Brown and Darling, keep at it, the pound will be destroyed soon with your idiotic Mugabe accounting antics. Continuing pound devaluation will be a vital step in the forthcoming global death of fiat currency. I'm right behind you boys, do your worst, come on!!!
Gordon or Gold?
21. charlie brooker said...
Politicians using tax payers money to interfere in the running of free markets for no other reasons than to prop up an asset bubble and save their political skins?
This is grossly immoral it makes me feel sick.
22. crash n burn said...
I'm well up for a march around Westminster with banners etc, shouting out how idiotic this is. Any chance of grabbing a whole bunch of people?
23. This comment has been removed as it was found to be in breach of our Blog Policies.
24. inbreda said...
10. mark wadsworth said...
most MPs own two or three homes, so for every £1 that house prices fall, they lose £2 or £3.
Seeing as they claim everything on expenses, falling house prices probably will put a stop to their purchase of properties on expenses, so it will have a double effect of saving taxpayers a few quid - unless of course the scumbag politicians can find some other way of theiving money off us.
@20 CaB - would love to go on a peaceful demo, but don't really want to get beaten up by the police, and held without charge under anti terrorist laws.
25. crash n burn said...
Oh no. Don't get me wrong, I would never condone anything other than a peaceful protest. But I do not believe we should be intimidated by the police - this would just mean that us HPC'ers have completely given up on our right to democracy and free speach. So I'm up for a banner parade if anyone would care to join. Maybe we should get a HPC movement together?
26. Neil B said...
Oh no...50bn of our tax into another accounting black hole. This will just prop up house prices and cause even more bad debt.
It's time we got rid of these idiots before they ruin the UK for good: We should demand a general election.