Conservatives Attempting To Push Ftb'ers Into Shared Ownership?

[Milton]

My Thanks to REDHAT SLY for the excellent link. I thought this deserved a thread of its own.

Property Market Debate 25th Jan 2011 Westminster

Some very insightful remarks from MP's on it. Much better than the opinionated filtered journalistic pieces.

As someone priced out of housing, I find some of the Comments from:

Conservative MP for Peterborough, Mr Stewart Jackson, and Conservative MP for Rugby, Mr Mark Pawson, downright ignorant and insulting:

Stewart Jackson, Conservative MP for Peterborough:

Does my hon. Friend agree that one problem with registered social landlords not developing more schemes for shared ownership is that the existing business model is one with a constant stream of housing benefit income - while the Government's reform of housing benefit will use the market mechanism to develop more innovative ways of getting people into shared equity?

Reply from Conservative MP, Mark Pawsey, Conservative MP, Rugby:

My hon. Friend makes a very sensible point. Shared equity offers a real opportunity. I like to see variable rates of shared equity, so that people may start with a 25% equity stake and increase that as their circumstances change. That is not happening as often as it should.Points were made about the availability of finance. People's ability to buy homes is very much driven by their ability to borrow, and there are real uncertainties in the market because of the current FSA proposals, which have been described as draconian. The harder we make it for people to get the level of finance they require, the less demand there will be for housing, and that will provide a disincentive for people to bid at a higher price, which in turn will lead to a further reduction in supply.

No First Time Buyers are interested at all in Shared Ownership. You would think they would realise that by now.

Stewart Jackson, Conservative MP for Peterborough:

We must not ignore the disparity between the joint income of young couples and the amount that mortgages are proffered at by lenders. That gap is huge, and we need to work with the Treasury and the FSA on the matter. I know that our right hon. Friend the Minister for Housing and Local Government is battling hard to make the FSA understand the practical ramifications of restricting the mortgage market, which will be disastrous for the housing market.

Did you have to borrow by offering proof of a joint or single income Mr Jackson, in order to buy your first home? What year was that?

It is clear that if prices fall to the same level of affordability relative to median household income earnings and interest rates, as they did in the mid-1990s, we are looking at a 50% + fall, from 2007 peak prices. FTBers will not borrow 6,7,8 x salary. We expect to borrow the long term average of 3- 3.5 x salary.

Probably the same as you did. [Although I suspect it may have been even less for you]

You seem to be suggesting the Ponzi/Pyramid Hosuing scam was a good idea, and should be re started?

Conservative MP, Mark Pawsey, Conservative MP, Rugby:

We have seen a massive growth in home ownership, to a peak of 71% of UK homes being privately owned by 2003.

Home ownership has remained at 70% for the last 21 years.

Stewart Jackson, Conservative MP for Peterborough:

We all support do-it-yourself shared ownership and intermediate housing to get people on the housing ladder so that we can become a property-owning democracy again.

Just dont get it, do you?

Stewart Jackson, Conservative MP for Peterborough:

I fear that the problem for my hon. Friend the Member for Watford is that he is looking through the wrong end of the telescope. The integral issue is mortgage availability and the fact that mortgage providers have failed to adapt and make progress in the market in terms of providing funding and mortgages to people.

Stop reading your paper, get off your ****, and go and talk to the people who are priced out of housing.

Affordability is the issue.

Stewart Jackson, Conservative MP for Peterborough:

I know it is heresy for any Conservative to say this-we have perhaps reached the limit of owner-occupation. If we consider comparative studies in Canada, Germany, Italy and France, people are happy to live in and pay rent for high-quality residential accommodation. We have not exhausted the possibilities of that here.

So we should work for nothing? No capital? Forced to pay for someone else's retirement and bankers bonuses? WE have already wasted tens upon tens of thousands in rent. We have been forced out of housing by the banks and the government. Its Theft.

If the bank bailouts had not occured, housing would have reverted to its long term average affordability. So our money is being stolen to prop up the price of other peoples houses. Whilst keeping us in debt slavery. And thats fine with the Tories? Supporting theft fraud?

Richard Harrington, Watford, Conservative MP

I should like to take this opportunity briefly to consider shared ownership schemes, which are a very important way of increasing home ownership, and of helping the demand and supply sides to meet.

Again. We want to be able to work for and pay for our own homes. The same as you did.

These MP's need their eyes prying open. Where is the debate on raising CGT/IR/Tax BTL at Income Tax Levels/dereg planning/Build more social housing. Bring the price of land down etc etc. Land Levy Tax, offset against income tax for those who do not own property? etc etc

If that's the best you can do Grant. You can forget the FTB'ers vote in 2015.

After reading that debate, one could come to the conclusion, reading between the lines that the Tories are going back to trying to push FTB'ers into SHARED OWNERSHIP?

Edited January 27, 2011 by Dan1

[R K]

to develop more innovative ways of getting people into shared equity?

Grantley Chapps favourite mot du jour.

The Tory boys will ramp it even harder than the last lot, mark my words.

[bendy]

The harder we make it for people to get the level of finance they require, the less demand there will be for housing, and that will provide a disincentive for people to bid at a higher price, which in turn will lead to a further reduction in supply.

riiiggggggggggggggghhhhhhht!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Edited January 27, 2011 by bendybogle

[tomandlu]

After reading that debate, one could come to the conclusion, reading between the lines that the Tories are going back to trying to push FTB'ers into SHARED OWNERSHIP?

It must look like an attractive option for the government. Without silly loans, FTBs can't afford silly prices, but to let prices crash would trash the banks' assets... solution, let the FTBs pay one price but value the houses at another, whilst getting the FTB to take on as much of the liability for the difference as possible.

[Si1]

isn't a mortgage a kind of shared equity where you share the equity with the bank and slowly pay it off?

isn't that the whole darned point?

[Milton]

It must look like an attractive option for the government. Without silly loans, FTBs can't afford silly prices, but to let prices crash would trash the banks' assets... solution, let the FTBs pay one price but value the houses at another, whilst getting the FTB to take on as much of the liability for the difference as possible.

If the banks are not forced to take a haircut. [And they should have been in 2008, if not for EVIL Labour] Then FTB'ers are in debt slavery, working for nothing for their entire lives.

F@@K this country

[tomandlu]

If the banks are not forced to take a haircut. [And they should have been in 2008, if not for EVIL Labour] Then FTB'ers are in debt slavery, working for nothing for their entire lives.

F@@K this country

I think both the banks and gov know a haircut, at some point, is unavoidable. They're just hoping to grow some hair first. The trouble is, how can they recapitalise when the current stand-off reduces the options for meaningful enterprise?

[winkie]

...very skeptical about shared ownership...paying mortgage and rent, having all the responsibilities of ownership but not the freedom...paying rent that could increase but sill having to pay all the maintenance and upkeep.

Anyone know what the shared ownership resale market is like....that is if you can sell it?

[Georgia O'Keeffe]

...very skeptical about shared ownership...paying mortgage and rent, having all the responsibilities of ownership but not the freedom...paying rent that could increase but sill having to pay all the maintenance and upkeep.

Anyone know what the shared ownership resale market is like....that is if you can sell it?

at some point somebody sensible might ask themselves if it makes sense to take on a full mortgage for the same proportion of property they have been giving away on ex council houses for the last 20 years

Edited January 27, 2011 by Tamara De Lempicka

[eric pebble]

It must look like an attractive option for the government. Without silly loans, FTBs can't afford silly prices, but to let prices crash would trash the banks' assets... solution, let the FTBs pay one price but value the houses at another, whilst getting the FTB to take on as much of the liability for the difference as possible.

It must look like an attractive option for the government. Without silly loans, LIAR LOANS, FTBs can't afford silly prices, but to let prices crash would trash the banks' assets... solution, let the FTBs pay one price but value the houses at another, whilst getting the FTB to take on as much of the liability for the difference as possible.

Spot on!

[winkie]

at some point somebody sensible might ask themselves if it makes sense to take on a full mortgage for the same proportion of property they have been giving away on ex council houses for the last 20 years

Yes, why did they once give up to say 70% of the true value away in the past....when today they want to charge you twice for less....madness.

[Timm]

[tomandlu]

It must look like an attractive option for the government. Without silly loans, LIAR LOANS, FTBs can't afford silly prices, but to let prices crash would trash the banks' assets... solution, let the FTBs pay one price but value the houses at another, whilst getting the FTB to take on as much of the liability for the difference as possible.

Spot on!

Eric, I think I've said this before, and I don't want to derail this thread, but IMHO 'liar loans' is a red-herring. The banks wanted to lend more and more - liar loans was just one of the mechanisms that allowed them to do this. If LLs had not been an option, they'd just have said "oh, lending 10*income is fine" or whatever. Blaming LLs is like blaming the make of the car when some toss-pot runs you over...

[eric pebble]

Eric, I think I've said this before, and I don't want to derail this thread, but IMHO 'liar loans' is a red-herring. The banks wanted to lend more and more - liar loans was just one of the mechanisms that allowed them to do this. If LLs had not been an option, they'd just have said "oh, lending 10*income is fine" or whatever. Blaming LLs is like blaming the make of the car when some toss-pot runs you over...

Lending 10 x income IS A LIAR LOAN!!

LIAR LOANS are THE FUEL - Without which the whole hpi scam could not have happened.

ALSO - Remember: Person A goes to street A to "buy" a property with a LIAR LOAN: Within a week - ALL the property in the neighbourhood and further is affected - priced upwards - thanks to that one LIAR LOAN.

SO - if 30 LIAR LOANS are issued - they go to streets, hamlets, villages, towns, [etc etc.] all over the country - and they are like CANCER --- they spread their poison far and wide. THAT IS WHAT HAPPENED!

ANYTHING OVER 3.5 x REAL NON-LIAR i.e. real/truthful INCOME - is a LIAR LOAN.

Edited January 27, 2011 by eric pebble

[Patfig]

Lending 10 x income IS A LIAR LOAN!!

LIAR LOANS are THE FUEL - Without which the whole hpi scam could not have happened.

ALSO - Remember: Person A goes to street A to "buy" a property with a LIAR LOAN: Within a week - ALL the property in the neighbourhood and further is affected - priced upwards - thanks to that one LIAR LOAN.

SO - if 30 LIAR LOANS are issued - they go to streets, hamlets, villages, towns, [etc etc.] all over the country - and they are like CANCER --- they spread their poison far and wide. THAT IS WHAT HAPPENED!

ANYTHING OVER 3.5 x REAL NON-LIAR i.e. real/truthful INCOME - is a LIAR LOAN.

3.5 x income Eric but that wont even buy a second hand caravan.................. maybe next year

[Timm]

Increasingly, UK/USA is rich because it is good at selling debt obligations to the rest of the world. In return, we get cheap goods and energy.

But recently, we sold a bunch of real junk to these guys. They got stung hard and quick. So they only want the good stuff. Stuff that actually looks like it might perform to term.

So what we need is for more people to take on more debt. But those people must have good, stable jobs, and they must provide addittional security (deposits) so that in the case of default, the asset can be sold without loss, and they must be able to service the loan (affordability), and they must not have a record of defaulting in the past.

Problem is, there are not enough of theose people who want to get loads of debt.

[Milton]

Increasingly, UK/USA is rich because it is good at selling debt obligations to the rest of the world. In return, we get cheap goods and energy.

But recently, we sold a bunch of real junk to these guys. They got stung hard and quick. So they only want the good stuff. Stuff that actually looks like it might perform to term.

So what we need is for more people to take on more debt. But those people must have good, stable jobs, and they must provide addittional security (deposits) so that in the case of default, the asset can be sold without loss, and they must be able to service the loan (affordability), and they must not have a record of defaulting in the past.

Problem is, there are not enough of theose people who want to get loads of debt.

Yes. A Debt Transfer has been implemented on a scale unseen, which destroys so much of what we once took for granted in our own lifetimes in this Country.

Attacking, human rights, civil rights, our liberties, and individual freedoms.

It is becoming clear that any British Government will support this Malum In Se

Edited January 27, 2011 by Dan1

[IWantItNow]

...very skeptical about shared ownership...paying mortgage and rent, having all the responsibilities of ownership but not the freedom...paying rent that could increase but sill having to pay all the maintenance and upkeep.

Anyone know what the shared ownership resale market is like....that is if you can sell it?

You're right to be sceptical, it's a joke. Imagine trying to sell a house you own now in this market with approvals at an all time low. Now imagine, with the reduced pool of people willing to buy, taking out 90 odd percent of that pool because they don't want a shared ownership property. Result = No sale. Have fun in your overpriced egg box.

[Bloo Loo]

most people see the price on a house as like one on a bag of tomatoes in Tesco.

thats the price.

I dont know why they keep referring to the housing "market" in that case.

As for banks assets being trashed, the Billions of US MBS our banks hold are all mark to model, US banks holdings of mortgages are mark to model....why shouldnt ours?

[ccc]

Here are details of the Jock Lift scheme.

Lift

Nice example they give.

One below looks to be a deposit of about 3%. Now I am sure this sort of thing happened before and led to some issues. Anyone care to remind me........

An example of how the Open Market Shared Equity Pilot works

Mandy is single, lives in Falkirk and earns £18,000 a year.

She has £8,000 saved towards the cost of buying a property. She may keep £5,000 and must contribute 90 per cent of the £3,000 balance. Therefore she can make a contribution of £2,700.

After being accepted onto the Open Market Shared Equity Pilot, she identifies a two bedroom property which has been valued at £79,500. This is within the maximum price of £80,000* that can be paid for a two bedroom property in Falkirk. The maximum mortgage that Mandy can secure is £54,000. This sum, together with her savings of £2,700, means that Mandy can contribute £56,700 towards the purchase of the property.

The Scottish Government is able to fund the balance of the purchase price of £22,800.

After the property has been bought, Mandy has a 71.32 per cent equity stake in it. The Scottish Government holds the remaining equity stake of 28.68 per cent.

* Figure accurate at March 2009.

[bomberbrown]

You're all looking at this from the wrong perspective, Shared Ownership is a fantastic deal!!........................ if you can secure a deal where you buy 0.01% of it and rent the other 99.99%.

Any other buy/rent ratios are simply a secured tenancy for a massive premium. Avoid at all costs!!!

[retz]

Hmmmphh. This was essentially what the Home Buyer Direct scheme was, but the ConLib Government did the math and realised the return on their money was negligible so they scrapped it.

I think the Tories want shared ownership to be done via private companies who build housing (usually designer flats) and allow people to buy in at 25% and staircase their way out, these sort of things usually have a stipulation in the contract that you can only ever buy 95% of the property, the private company always keeps a 5% share.

Edited January 27, 2011 by retz

[tomandlu]

Lending 10 x income IS A LIAR LOAN!!

...

ANYTHING OVER 3.5 x REAL NON-LIAR i.e. real/truthful INCOME - is a LIAR LOAN.

And if borrowers had been honest about their income and lenders had still lent 10*income, would we be in a better position?

My point is that LLs were just a mechanism to allow the banks to lend. They would have found another mechanism if LLs had not been available, hence my car analogy.

[Bloo Loo]

And if borrowers had been honest about their income and lenders had still lent 10*income, would we be in a better position?

My point is that LLs were just a mechanism to allow the banks to lend. They would have found another mechanism if LLs had not been available, hence my car analogy.

you mean there was fraud on the bondholders of banks, and the depositors in banks?

you mean that the quality of MBS stock was not AAA as advertised?

[Stars]

And if borrowers had been honest about their income and lenders had still lent 10*income, would we be in a better position?

My point is that LLs were just a mechanism to allow the banks to lend. They would have found another mechanism if LLs had not been available, hence my car analogy.

Absolutely

Which is why talking about 'liar loans' is missing the point

The loans made perfect sense at the time. The borrower's ability to repay with their work didn't matter a jot because the market was such that people who owned property didn't have to repay with their work. Lending to a goldfish to buy a house would have made sense, so long as tyhe goldfish owned the house.

Edited January 27, 2011 by Stars