Jump to content
House Price Crash Forum
Sign in to follow this  
moonriver

Telegraph Suggests Budget To ....

Recommended Posts

http://blogs.telegraph.co.uk/finance/ianmcowie/100009868/budget-help-for-savers-first-time-buyers-and-house-prices/

Budget help for savers, first time buyers and house prices

Savers may be given Government-guaranteed protection against inflation and first time buyers offered 20pc deposits to get onto the housing ladder in the Budget today.

Sources close to Treasury consultations suggest that Chancellor George Osborne intends to restore National Savings & Investments’ ability to provide index-linked certificates in a bid to restore the confidence of savers, who outnumber borrowers by six to one. On the other side of the balance sheet, first time buyers with less than £60,000 a year income who can put down a 5pc deposit may be offered an extra 20pc loan at low interest rates for five years to help beat the mortgage famine.

While this move might restore affordability and support house prices, critics may claim it would be better to allow market forces to bring prices down. However, with most first-time buyers only able to secure mortgages worth 75pc of a property’s value, Mr Osborne is expected to argue that the new loans will give more young people the ability satisfy tighter lending requirements following the credit crisis and protect 40,000 jobs in the construction industry.

Index-linked certificates were withdrawn from sale abruptly last July after fears of rising inflation prompted an inflow of £5.4bn in three months. A total of 580,000 investors held about £17bn in these five and three-year fixed-term bonds when sales were suspended for the first time in 35 years.

Their return would prove popular with savers who can rarely obtain guaranteed real returns – that is, in excess of inflation – from conventional bank and building society accounts. While wishing will not make it so, some experts said last night they also expect the new bonds to be linked to the Retail Prices Index (RPI) - unlike many State and public sector pensions, which will switch next month to follow the consistently lower Consumer Prices Index.

Dr Ros Altmann, director general of Saga, said: “One of the biggest disasters for over 50s savers has been the Government’s decision to withdraw its inflation-linked certificates, just at the time when the Bank of England was pursuing its emergency policies of quantitative easing and ultra-low interest rates. The decision to withdraw these was the ultimate kick in the teeth for Britain’s hard-pressed savers.

“Saga believes the Government must act to protect savers. Sustainable growth relies on people saving for their future, borrowing and spending will only produce growth in the short-run, but in the long-run the money will run out and growth will be hit. That is how we got into this mess, let’s wake up to the real problems.”

As opposed to the bad news of the "help" to be given to FTB'ers (builders), this could be a bit of good news for HPC'er savers.

Share this post


Link to post
Share on other sites
protect 40,000 jobs

Isn't that figure a bit low? Otherwise they should as well spend the money directly into useful infrastructures to stimulate the construction job market.

Edited by finalgrunt

Share this post


Link to post
Share on other sites

http://blogs.telegraph.co.uk/finance/ianmcowie/100009868/budget-help-for-savers-first-time-buyers-and-house-prices/

As opposed to the bad news of the "help" to be given to FTB'ers (builders), this could be a bit of good news for HPC'er savers.

As much as I enthuse about the prospect of being able to put money into one of these, I'm not sure it's the role of Government to be providing such products, as it's just another index-linked liability weighing on the public balance sheet. The government should be encouraged to get out of people's lives, not further into them. That said, if they re-appear I'll gleefully fill my boots in the absense of anything even remotely competitive. It's no way to run an economy though.

Edited by cheeznbreed

Share this post


Link to post
Share on other sites

http://blogs.telegraph.co.uk/finance/ianmcowie/100009868/budget-help-for-savers-first-time-buyers-and-house-prices/

Budget help for savers, first time buyers and house prices

Savers may be given Government-guaranteed protection against inflation and first time buyers offered 20pc deposits to get onto the housing ladder in the Budget today.

Sources close to Treasury consultations suggest that Chancellor George Osborne intends to restore National Savings & Investments’ ability to provide index-linked certificates in a bid to restore the confidence of savers, who outnumber borrowers by six to one. On the other side of the balance sheet, first time buyers with less than £60,000 a year income who can put down a 5pc deposit may be offered an extra 20pc loan at low interest rates for five years to help beat the mortgage famine.

While this move might restore affordability and support house prices, critics may claim it would be better to allow market forces to bring prices down. However, with most first-time buyers only able to secure mortgages worth 75pc of a property’s value, Mr Osborne is expected to argue that the new loans will give more young people the ability satisfy tighter lending requirements following the credit crisis and protect 40,000 jobs in the construction industry.

Index-linked certificates were withdrawn from sale abruptly last July after fears of rising inflation prompted an inflow of £5.4bn in three months. A total of 580,000 investors held about £17bn in these five and three-year fixed-term bonds when sales were suspended for the first time in 35 years.

Their return would prove popular with savers who can rarely obtain guaranteed real returns – that is, in excess of inflation – from conventional bank and building society accounts. While wishing will not make it so, some experts said last night they also expect the new bonds to be linked to the Retail Prices Index (RPI) - unlike many State and public sector pensions, which will switch next month to follow the consistently lower Consumer Prices Index.

Dr Ros Altmann, director general of Saga, said: “One of the biggest disasters for over 50s savers has been the Government’s decision to withdraw its inflation-linked certificates, just at the time when the Bank of England was pursuing its emergency policies of quantitative easing and ultra-low interest rates. The decision to withdraw these was the ultimate kick in the teeth for Britain’s hard-pressed savers.

“Saga believes the Government must act to protect savers. Sustainable growth relies on people saving for their future, borrowing and spending will only produce growth in the short-run, but in the long-run the money will run out and growth will be hit. That is how we got into this mess, let’s wake up to the real problems.”

As opposed to the bad news of the "help" to be given to FTB'ers (builders), this could be a bit of good news for HPC'er savers.

Why is this only a disaster to the over 50s? Ah, that's right; because no one under the age of 50 can afford to save. We just get loans. Lots and lots of lovely loans to buy all the lovely things that the over 50s got for free.

Never had it so good.

Share this post


Link to post
Share on other sites

http://blogs.telegraph.co.uk/finance/ianmcowie/100009868/budget-help-for-savers-first-time-buyers-and-house-prices/

As opposed to the bad news of the "help" to be given to FTB'ers (builders), this could be a bit of good news for HPC'er savers.

If IL certs return, holding them may be restricted to pensioners. Like the original "Granny Bonds".

Share this post


Link to post
Share on other sites

I definitely want some index linked certs.

+1

I have some, I don't have enough.

It would also give the banks a reason to offer more than 0.0001% saving rates.

Edited by exiges

Share this post


Link to post
Share on other sites

If IL certs return, holding them may be restricted to pensioners. Like the original "Granny Bonds".

This is exactly what I expect to happen should they return.

We can't have all those FTB / STR deposits locked away not falling in value otherwise where's the incentive to buy a (real terms) depreciating asset?

Share this post


Link to post
Share on other sites
A total of 580,000 investors held about £17bn in these five and three-year fixed-term bonds when sales were suspended for the first time in 35 years.

In the big scheme of things, 17bn isn't that huge an amount of money. I always thought more was invested in these, the interest bill at current RPI would be about 1bn a year. If they do introduce them I think they'll be more restrictive, both in the amount you can buy and also on the early withdrawls side - it wouldn't surprise me if early withdrawls were banned or no interest paid at all if withdrawn early.

Share this post


Link to post
Share on other sites

If IL certs return, holding them may be restricted to pensioners. Like the original "Granny Bonds".

that would be very unfair to younger people who are sensible enough to be careful with their money.

...But it wouldn't surprise me if they pulled a trick like that. :rolleyes:

Share this post


Link to post
Share on other sites

A start would have been for them to keep the election promise of removing tax from savings income.

But hi ho there you go it was only an election promise and they renege as soon as they've got your vote.

Maybe it's in the small print but holding breath not advisable :huh:

Share this post


Link to post
Share on other sites

.

Deflation it is then.

Yes Billy, absolutely.

This is easy,once you get the hang of it isn't it?

I managed to fill up the last issue of these, doubt the next lot will be worth it.

After all they withdrew them just before a MASSIVE inflation spike.

You can easily conclude that they're expecting inflation to tank now.

I dont really see how or why they think this, but hey.... :huh:

Share this post


Link to post
Share on other sites

Look, you are supposed to be putting your money in shares. MPC Bean told you as much. The fact that you might have developed ulcers over the past decade doing just that, and been rushed to hospital with a chest pain "radiating into your left arm" when the Japanese tsunami struck is quite irrelevant. For those over 65, have you not heard retirement is dead? Get on and manage that portfolio and stop being so lazy. We can't have you lot wasting time in potting sheds!

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.