ingermany

Does this mean that government has successfully placed a floor under average house prices in UK? Using vast amounts of tax payers' money of course, and by diverting money that could have been spent making peoples' lives better, safer and longer. Nevertheless, using an effort and resources on a par with those needed to defeat Naziism in 1945 they may have succeeded in establishing a "minimum house price" for the duration of the next economic cycle. It must mean though that government has to escalate the intervention on a year by year basis, spending more and more of the public purse on house price support measures. It has already outstripped defence spending and will soon overtake education and health. Social security will need to be protected as this budget is integral to the HPI support mechanism. I can't recall any historical precedent for a government expending so much in order to punish its own citizens. The Stalinist excesses of pre-war USSR may have been more vicious and destructive, but they were certainly not more expensive.

If anyone sees a competitive market economy can they let me know? Currently UK property investment is more subsidised than European agriculture was at the time of the legendry wine lakes and butter mountains. Free market has absolutely no part in this.

And if you watch North Korea Evening News it is full of stories about how people think the nuclear weapons program is a sure sign of national success, alongside heart warming tales of Kim Jong Un's sporting prowess. It's not what's true that matters. It's what they can be induced to believe.

Yes I agree. To the masses and the media the housing crisis is the fact that people who bought for £500K 7 years ago can't now sell for £1m. There is an assumption of doubling HPs every 7 years. To the masses the crisis is nothing to do with homelessness, overcrowding and unaffordable rents. Even though this is the real impact, people ignore it. Instead, what they want is house price doubling every 7 years because they believe, by some mystical formula, that makes us all rich. So, if help to sell pushes up prices artificially the intervention will be cheered from the rooftops. Even for those not on the "housing ladder" many believe that maintaining scarcity and high prices is in their long term interests. So powerful is the HPI meme-virus.

Come off it, the media and most of the population positively salivate at the prospects of rising house price inflation. They look upon HPI as a surrogate measure of national wealth.

Remember it is not the buyers who get the subsidy from government. It is the sellers. The £120k subsidy per £600k house is going to the seller so they don't have to drop the price by £120k to sell. Government is using this subsidy to force up housing costs for everybody. I'm not convinced by their logic that assumes everybody will feel richer as a result. It seems to me that at least as many people will be disadvantaged as a result of the intervention, and those on the receiving end of benefit cuts, tax rises and deficient public services will number among the losers. When they realise that the winners are those with assets of over £1/2 million will they be angry? So far it seems the answer is no.

And we learn that the NHS has an immediate £30 billion shortfall. 8 hour waits in A and E, massive numbers of excess deaths, and is in complete meltdown. But the taxpayer can spend another £120 billion on artificially ramping up house prices with gifted deposits and guaranteed loans to allow people with houses they can't sell to sell them on for up to £600k thanks to a government subsidy. The wheels will come off this artificial and wholly government backed gravy train. But not before we see Egypt type mayhem on the streets. We took the money from here to fund Help to Buy

If they apply this model to RBS, HSBC, Lloyds and Barclays your £85k is going to buy a day's supply of peanuts.

That's what Cameron means by "we're all in this together". When his city friends look like losing money, the government just takes from the rest of us to make good the losses. We certainly aren't in in together when they get the seven figure bonuses.

Tax people and spend the money on buying up the slack supply, creating a shortage, so that everyone gets to pay more. That's how housing subsidies are used.

So they are increasing the lending of money they don't have to people who can't repay. And the government is chipping in 20% of every bad loan. The problem for HPC is that house price rises are becoming a matter of national survival. The financial system, and even the state, is so heavily invested in the scam that HPC now will wipe the country out and leave us nationally destitute. Perhaps we are already destitute and don't know it yet?

No twigs, no windows and no door. £142K. They are having a laugh. Like the colour though.

Yes, that's the real reason for higher education. Your "JSA" becomes a loan that you repay over the next 30 years, as does the money you pay to the university for the ability to study rather than claim benefits. Now if all benefits, like LHA, SMI etc. were classed as loans the playing field could be described as being close to level. The need to falsifly unemployment stats is also the reason why over 3 million unemployed people were reclassified as disabled.

Yes, a tax on the young. Also a UK tax, the liability for which is determined by your parents' income. And if you are lucky enough to have parents who are resident in Scotland you are exempt from the tax for life. What sort of taxaction act would be overtly drafted in these terms?

I agree that not everyone needs a degree. If you want to work in sports hospitality, you can probably learn all you need by working in the industry, and a degree in the subject is not really going to help anyone other than the establishment running the course. But perhaps, given the strategic long term requirements to train engineers, scientists, doctors, and the like, government should be working with industry to support a sustainable higher education infrastructure designed to meet predicted future needs. It doesn't need centralised control, but it could do with some targeted investment. Medical degrees are not just another consumer commodity to be sold on credit. Instead the higher education system has been put out to the free market, whilst the mortgage finance industry has been nationalised, and centrally controlled, at a cost to taxpayers of at least 40x the cost of higher education. All so that the average 55 year old mortgage owner can buy a new 4x4 every year from his housing equity. Short term support of consumer spending and house prices has become the only economic and social priority. I'm not just blaming the UK though. I was listening to a HSBC analyst on the radio explaining why China's most important industry is......the housing market. It feels like everyone else is slowly sinking to our level. .

You're right, but that effect will not impact for another 5+ years. The big "giveaway" in free money is being engineered now to push up house prices (and therefore spending) between 2013 and 2015. What happens after that doesnt matter.

The thing that I can't get my head around is, that faced with a budget deficit, the government have prioritised for aid homeowners with houses valued at £600K, who are being given an interest free loan of £120K for 5 years to prevent them having to drop their property price by the same amount to sell it. In contrast, stduents have had their charges trebled and are being charged pay-day lender levels of interest by comparison. This implies that government believes that our economic future lies more in the hands of estate agents than with science and engineering graduates.

Telegraph The treasury are starting to realise that much of the annual £3 billion in tuition fees loans will be written off. So they will decrease the income threshold that triggers repayment. I wonder what the corresponding calculation is for the "Help-to-Sell" property investor government aid package of £16 billion. And of course where property investors get an interest free loan (gift) from government, students get charged crippling interest of RPI+3%, at a time when RPI is being deliberately stoked up by government interference. Level playing field?

Barking Mad Also known as the Paul Daniels Plan. You can apply to get the "free" shares on the basis that government decides later how much you have to pay for them. Not that it matters that you've already bought them in 2008, or you did if you have been paying tax. And this gives everyone a nice £1650 windfall in 2015. Oh yes, and only registered voters are eligible. Do we not have an electoral commission or something similar? This has got to be the most corrupt idea since the "Bribe to Buy" housing scandal of 3 months ago.

Game Over I'm afraid, at least for a year or two. Government has decreed a "minimum property price" and will effectively use public money to buy all property that can't sell on open market. This is the implication of help buy etc. Government ends up "owning" 20% of UK residential property that comes on the market. It's operating in the same way as EU agriculture subsidies, but bigger and less free market. It was the doomsday scenario predicted by many on this forum, though fewer people believed government would actually do it, and I suspect many still doubt that it can really work. Time will tell.

Bed blocking has been a problem ever since I was a junior doctor almost 30 years ago. The causes, effects and solutions haven't changed. Fact is that hospitals are, and always will be, the last refuge for the helpless in society. Providing an alternative would take imagination, money and compassion, none of which are in plentiful supply.

Also a bit of justified payback for the hubris of the co-op as I believe they were the original lender to "help" FTBs by offering 100% shared equity loans in partnership with housing associations and councils. Maybe someone will get the message that trying to prop up asset values against market forces is a route to failure

Robert Peston is being very careful about they way he reports this one. PESTON. Very restrained...probably literally so.

Help Buy will be the next really big mis-selling scandal. Borrowers will seek compensation for being given massive loans that are commercially non viable (without government subsidy). They will justifiably argue that they should never have been encouraged to take on debts that were clearly unaffordable based on the calculations of the major high street banks. They will also justifiably argue that they weren't appraised of the risks, having been told repeatedly that they can't lose and it's a great time to buy. Add to the mix the fact that the scheme is Treasury funded so the average consumer would reasonably argue that they were led to believe it was a government guaranteed investment. There will be a £130 billion compensation bill plus legal costs.

You can sense the mis-selling angst building. Although the man from the FCA did say "it is exactly what it says on the tin...interest only". Mis-selling is just the latest manifestation of compensation culture in UK. Time was if you bought something you didn't really want or need (who hasn't?) you had to sort out the mess yourself. Now we have firms of lawyers specialising in the subject.