ingermany

Now we also have the totally legal jiggery pokey conducted by the government.

Was the talk given by David Willets MP, Secretary of State for Universities and Science? I've seen him on TV, and that was exactly what he said.

Describing buying property as a "noble aspiration" did it for me. Declaring war is something the government is struggling with these days, but that phrase is a clear signal of intent to punish anyone without a property or mortgage. Help to Buy will be expanded and extended. The house price bubble will be mercilessly inflated and taxpayers will be robbed to pay for it. Inflation will be given a stiff ignoring.

Some half hearted questioning by Marr on government commitment to negative interest rates whatever the consequences and the increasingly desperate attempts to pump up house prices and consumer debt. George's reply is a predictable "we're all in this together" and a statement of the central plank of economic policy to support the "noble aspiration" of the greedy to grab a piece of the HPI action. No mention of the equally noble aspiration of savers and pensioners to not see runaway inflation leaving them destitute after 40 years of work and saving. It's another clear buy signal for residential property. He is saying " buy a house or government will take your money".

But on the other hand, if you buy a house they'll give you a cheap loan. That's the plan. Make property investment more profitable than working.

Exactly. The size of the failed banking industry was so large that when it was "rescued" it actually became the government. The prorities and policies of subprime lenders and UK PLC are identical. The parasite has full control of the host. Education, Defence, Health are now secondary concerns. What really matters is getting those 125% loans restarted. The large rise in HB claimants is for the same reason. They have to make BTL pay, and the only way to do this is to ramp up the taxpayer subsidies.

Housing Benefit= HTBTL (Help To Buy To Let). Not surprising they are increasing it. It's part of the plan.

What, even people whose parents have property in Scotland? Surely they should be exempt from UK taxes.

Not only can they not stop it, they will have to increase it. As it "succeeds" in driving HPI above wage inflation, government will have to guarantee bigger and bigger deposits. The base of the pyramid can only be supported by government.

Don't know about MIRAS but certainly expect an escalation in government intervention. The more money they pump in, the more they need to add to it to prevent "losses". They will make it impossible for anyone to sell a house for less than they paid for it, with government underwriting the "price promise" guarantee to protect buyers and lenders. That's how markets work.

That does appear to be the intent of government and central bank. How else does one interpret the "rescue" of the housing market? Government is paying the 20% deposit for buyers as well as owning the lion's share of the biggest mortgage banks, at the same time as manipulating interest rates to negative territory. It has made insanely over-valued property affordable to new buyers whilst keeping up returns on property investment. And yes, it does appear that the taxpayer is picking up the tab. Problem is that once you start refunding pyramid scheme losses to investors, you create the moral hazard which attracts more mal-investment in the belief that government is standing behind the scheme. In the case of housing this does appear to be the case as government and central bank are the principal backers. It's not so much a case of "where does it end?". It's a case of once you embark on this path there isn't a way back. Hence the gloating about being outside the EZ, because now they can print their own money for the housing stimulus.

The use of the word "affordable" in defining house prices is the new paradigm here. Artificially low interest rates, easy credit, interest only repayments, and government funded deposits can make expensive houses affordable. Even if the average price is over a million by next year (bringing joy to Express readers) the houses can be made affordable, even if earnings are static. It's just a question of increasing the taxpayer subsidy as much as is necessary. I think that this is the real game changer. Interest rates and economic policy are slaved to the house price index. For clues about what could happen next, you need to look at the student finance bill. Telegraph; DON'T CALL THEM DEBTS Government says (and repeated in the above article by Martin Lewis) that these loans are not actual debts, but are really a type of tax or contribution, to be paid gradually when and if earnings allow it, whilst accepting that large amounts may never be repaid. I can seriously see this being the model for future government intervention to keep house prices elevated. More mortgage debt is needed to inflate house prices. What is to stop government from supplying the finance and reclaiming some of it via tax codes? How else can they stop house prices from falling?

But banks can borrow at 0.25% from the BoE so long as they re-lend it to mortgage customers. This surely trumps any calculation based on economic fundamentals in the short term. As far as mortgages go, they are 0.25% plus the lender's profit margin. And I think the FLS has been extended and can be extended ad infinitum.

So for pre owned properties, there has been a rise of around 4-5% in 9 years. With inflation averaging just under 2% pa. I realise that new dwellings have risen more, but still on average just in line with inflation. And wage growth in Germany has been positive, above core inflation for a couple of years now. Nominal wage growth around 2.6%. So yes house prices are rising, but not in the way they rose in UK from 2005-2007. This isn't a credit boom based on house price speculation, and hopefully won't be. In contrast your 100k sterling in 2005 would have bought 150k euros. It is now only 114k. To anyone being paid in pounds its make German property now look very expensive compared to 10 years ago. New houses are now similar price to middle England.

I don't think so. There are enough policies in place to protect the rented sector and control prices. Also, the need to own a home for 10 years before selling it to avoid taxation means that a bubble is unlikely. What Germany has had since 2007 is steady slow house price growth or at least stability. Observed from UK it looks like a boom only because of sterling devaluation. As the city am article points out, UK is attempting to achieve competitiveness solely through devaluation rather than controlling wages and costs. Why the author sees this as a good thing is beyond me. In spite of the devaluation in sterling, UK manufacturing is dead and balance of payments firmly in the red. Meanwhile Germany continues to export luxury autos because they don't even to attempt to compete on price. And they are still the nation that supplies the engineering that allows Chinese factories to export disposable crap to UK credit card owners.

One of the most nauseating features of the 2008-9 "crash" was the sight of the Prime Minister making solemn statements about the need to spare no effort to assist the victims of the tragedy (that started in America). As if a 10% correction in house prices was on a par with an overwhelming natural disaster. Of course, as it turned out the reaction of the state eclipsed any historical reaction to any natural catastrophe of days gone by. Only the post WW2 Marshall Plan was bigger in scale than the rescue plan for overstretched house buyers. Agaist this background, one can see that buying off plan is again seen as a one way bet.

My rent for 4br detached is less than in 2001. Cost to buy over same period is slightly up, but only by 10-15%. Midlands. Much depends on whether the feared boom in HPs really happens. Next 2yrs is critical.

The recovery will have arrived when the base rate exceeds CPI

I don't think people get away with this with a new BTL mortgage. It's the people who start on OO mortgage and then rent to sell because of a work move. Do they inform the lender and convert to a more expensive mortgage? Or do they rent out the property whilst forgetting to inform the bank. They will of course remember to tell the insurance company, utilities and the local authority so they can stop paying those pesky bills. If the bank challenges them they just plead amnesia. It's only fraud if you can prove intent.

I also heard a similar conversation yesterday. I guess this is an issue of the amateur "accidental" landlords rather than the likes of the Wilsons. I can see why they do it. They get a cheaper repayment schedule and if things go wrong they can still pose as "hard working families" in order to get state assistance with repayments and to avoid repossession, rather than being treated as a business. And while things go well they can be treated as a business for tax purposes. It's a win win situation.

My link Interest only 70% LTV at just over 3% fixed for 5 years. Max age 85. You need 30% equity and I assume government won't chip in with Help to Buy . I am also assuming that you can't claim SMI if you take out your IO mortgage after you've stopped earning. And, obviously you'll need to prove ability to repay at the time of signing the loan, so actually would need a private pension or other income to satisfy the lender. I think that self-cert IO is tricky to find now, but I bet all that will change as well if (big if) they can get house prices rising.

But OAPs get their mortgage interest paid ad infinitum if they are on pension credits. They may still owe up to £200k when they die, but nobody is expecting them to repay whay they borrowed within their lifetime. If I was 64 and about to retire on a basic pension I'd make sure I got myself onto income support with a £200K mortgage just before I turned 65. Could probably use the cash for a "helping hand" mortgage for grandchildren. One way or another the taxpayer is going to finance the IO only loans fiasco. And remember that a large portion of IO loans are a result of forebearance by banks. Government and FSA have actively promoted IO in this sense even after the banking crisis was plain to see. Got to stop repos. Got to keep house prices up.

It may not be free, but payments are deferred for 5 years, by which time the borrower will hope that house prices have risen enough to repay the loan. This is the same principle that has allowed the forbearance and wholesale movement of "home-owners" to interest only loans. Repayment is deferred indefinitely. It might not be free money, but nobody seems bothered about collecting what is owed. Any attempt to apply normal rules of financial prudence will crash the housing market. I still say that far too many have a vested interest in maintaining the illusion of rising house prices to allow this to happen. The only question is one of just how much further they will go. The current government stake in housing is 20% of every house sold. There is nothing that limits it to 20% in the future.

In a free market, yes. But what if "help to buy" is expanded progressively, to give bigger and bigger interest free "equity loans" that enable FTBs to take on mortgages that far exceed the commercial maximum? If the interest free deferred loan makes up 60% of the price then your FTB on £20k a year can afford his £250k house. This forces prices up so that he can pay off the equity loan with the profit when he sells. I know that statement has all the hallmarks of a pyramid scheme, but is that a surprise? Seems to me this is the only way to keep the pyramid from falling. Such a course of action sounds improbable, but right now a FTB can already claim a government gift of £120k as a deposit on a £600k house. At a stroke this has lifted the threshold of affordability by 20% and pushed up prices. They are going to have to increase this to keep prices up and I would not bet against it.

100% of benefits are spent on subsidising house prices. That is the wholle purpose of the £130 Billion budget.