Osborne's Mortgage Lending Plans - All Gone A Bit Quiet On The Opposition Front

[The Masked Tulip]

In the week or two after Osborne announced his plans to stoke the housing market there was all sorts of criticism of the idea in the UK media - even Telegraph financial writers wrote against it.

Now, it seems it is old news and yesterday's fish and chip wrappers. It seems to have been forgotten but, of course, it is still going to happen. In fact, the only people who seem to not have forgotten about it are HPCers and EAs.

Do George look like a man who will change his mind on this policy? No? Didn't think so.

[TheCountOfNowhere]

In the week or two after Osborne announced his plans to stoke the housing market there was all sorts of criticism of the idea in the UK media - even Telegraph financial writers wrote against it.

Now, it seems it is old news and yesterday's fish and chip wrappers. It seems to have been forgotten but, of course, it is still going to happen. In fact, the only people who seem to not have forgotten about it are HPCers and EAs.

Do George look like a man who will change his mind on this policy? No? Didn't think so.

Wait till U-TURN ( my stomach ) Cameron get's involved.

[scrappycocco]

Opposition want their houses to go up so they can flip em probably. The system is corrupt.

[Mr. Miyagi]

Last night BBC Wales ran with the headline that the WAG had dropped plans to implement the original help to buy scheme in Wales, much to the dismay of Redrow.

Of course it was not reported that the scheme would not be needed if Redrow dropped the price of it's new builds

[rainbow]

Plenty of criticism when they debated the proposal in the commons on Wednesday , even the Government spokesman had his concerns.

[interestrateripoff]

Has it gone quiet so they make a new announcement at a later date?

[Nationalist]

The part of Help to Buy which is objectionable is the mortgage subsidy to buy existing houses. (Help to buy new-builds is non-HPI.) This isn't due to start until next year anyway and is currently having a rocky ride through parliament with questions about whether BTL landlords will be able to benefit and how to exclude them if not; also will Russian oligarchs be in on the scheme, etc.

One could see this never quite making the statute books.

[the_duke_of_hazzard]

The part of Help to Buy which is objectionable is the mortgage subsidy to buy existing houses. (Help to buy new-builds is non-HPI.) This isn't due to start until next year anyway and is currently having a rocky ride through parliament with questions about whether BTL landlords will be able to benefit and how to exclude them if not; also will Russian oligarchs be in on the scheme, etc.

One could see this never quite making the statute books.

My "worry" would be that given the fees involved for the lenders, they'll only lend to the already rich, who don't need the help.

5 years interest free on 20% of 600K works out at around 50K. Utterly inflationary, and I'd buy an overpriced house at that price.

[long time lurking]

The part of Help to Buy which is objectionable is the mortgage subsidy to buy existing houses. (Help to buy new-builds is non-HPI.) This isn't due to start until next year anyway and is currently having a rocky ride through parliament with questions about whether BTL landlords will be able to benefit and how to exclude them if not; also will Russian oligarchs be in on the scheme, etc.

One could see this never quite making the statute books.

I`m not holding my breath ,but dose ask more questions than it gives answers

[RufflesTheGuineaPig]

Of course it was not reported that the scheme would not be needed if Redrow dropped the price of it's new builds

They can't, they need to recover the price they paid for the land.

It's not rocket science.

[ReadingRabbit]

I was just speaking to site manager of the new housing development near Reading and he said we are selling 5 houses a day because of this help to buy scheme and there is a mini boom and i should hurry else i will miss the chance

He then listed all the conditions for this help to buy scheme I think the mother of all crashes is coming

[erranta]

Opposition want their houses to go up so they can flip em probably. The system is corrupt.

He's just doing what he is told to do by his faux Jewish banker bretheren/think tankers/Financial advisors

Up The City

- Fekk any OBLIGATIONS to the UK population (let's move the goal-posts AGAIN)

We are on to YOU - sch_mucks (Queen st WC)

Edited April 19, 2013 by erranta

[the_duke_of_hazzard]

I was just speaking to site manager of the new housing development near Reading and he said we are selling 5 houses a day because of this help to buy scheme and there is a mini boom and i should hurry else i will miss the chance

He then listed all the conditions for this help to buy scheme I think the mother of all crashes is coming

Can you elaborate? I'm not sure exactly what you mean?

[pjw]

The part of Help to Buy which is objectionable is the mortgage subsidy to buy existing houses. (Help to buy new-builds is non-HPI.) This isn't due to start until next year anyway and is currently having a rocky ride through parliament with questions about whether BTL landlords will be able to benefit and how to exclude them if not; also will Russian oligarchs be in on the scheme, etc.

One could see this never quite making the statute books.

No. Help to buy new homes still fuels HPI. Because otherwise those houses would have to sell for less - and all home sales prices do feed into the national price level for all homes. It is ridiculous to say that because it is a new home, selling a one bedroom flat for £1m with a government subsidy doesn't boost house prices across the board.

[kev-all-in]

from the beeb today....

Lending to business falls by £4.8bn, Bank of England says

Lending to businesses in the UK has fallen by a further £4.8bn in the three months to February, the Bank of England has said.

That represents a fall of 4.4% in loans to companies and small firms from the same period a year earlier.

The Bank also said that the mortgage market was "broadly unchanged".

Lower lending

The Bank of England's figures show that loans to construction firms and housebuilders were particularly weak.

Lending to the real estate sector fell by 5.3% in December 2012 from a year earlier, the sharpest drop for more than three years.

link

Hardly a raging success - they can't even give away free money.

I was quite worried about the impact FLS would have in staving off a HPC, and there does seem to be a fair bit shifting round here (East Anglia) at the lower and middle of the market recently. However there seems to be surprisingly little seasonal ramping from the local EA's / VI's going on at the moment, given the supposed Spring bounce + FLS + better weather I expected to get loads of EA junk mail, free paper supplements etc etc but this year I've hardly noticed anything.

Maybe I'm just getting better at ignoring it all.

(edit typos)

Edited April 19, 2013 by kev-all-in

[winkie]

Look if ordinary working people didn't have to take on so much debt and pay such high rents.....the economy would make an instant turn around, they might even afford to pay a tiny weeny bit more in tax.....high house prices, debt and rents are stalling the economy big time.

[The Masked Tulip]

Last night BBC Wales ran with the headline that the WAG had dropped plans to implement the original help to buy scheme in Wales, much to the dismay of Redrow.

Of course it was not reported that the scheme would not be needed if Redrow dropped the price of it's new builds

The Welsh Assembly only cancelled their plans because Osborne is doing what he is doing.

http://www.thisissouthwales.co.uk/End-NewBuy-scheme-Wales-disappointing-mdash-nbsp/story-18744853-detail/story.html#axzz2QqsdZL4W

[ubuntu]

Seems to be still some opposition to it, still unclear what will happen.

The committee says it is "by no means clear" that the scheme will benefit first-time buyers.

And the chancellor's claims that boosting demand will, in time, serve to increase the supply of property were "unconvincing" in the short term.

The committee also expresses concern that the scheme could become a "permanent feature" of the housing market and insists any decision about its future should be taken by politicians rather than the Bank of England.

And it says there is a "lack of clarity" about whether people who already own a home would be excluded, arguing that it "struggles to see the rationale" of existing homeowners of any kind being able to benefit from it.

"The government's Help to Buy scheme is very much a work in progress," said the committee's chairman, Tory MP Andrew Tyrie.

"It may have a number of unintended consequences. The questions the committee has asked the government need answering."

http://www.bbc.co.uk/news/uk-politics-22214546

[hirop]

Here is a link to the Treasury Committe report roundly panning the lack of detail on "Help to Buy Sell"

Link

[Dorkins]

Here is a link to the Treasury Committe report roundly panning the lack of detail on "Help to Buy Sell"

Link

Nice, but since the Treasury doesn't need legislation to implement Help to Buy, why should they care what a bunch of backbench MPs think about it?

[easy2012]

My "worry" would be that given the fees involved for the lenders, they'll only lend to the already rich, who don't need the help.

5 years interest free on 20% of 600K works out at around 50K. Utterly inflationary, and I'd buy an overpriced house at that price.

Just for correctness...

600k x 20% (deposit) = £120k

Interest at 3%pa x 120k x 5 = £18k

Interest at 6%pa x 120k x 5 = £36k

Interest at 8.333%pa x 120k x 5 = £50k...

[Beigemaster]

http://www.bbc.co.uk/programmes/b01s02x8

12:20 in- More or less spluttered on my cornflakes when I heard this piece this morning.

The correspondent actually reported on (what everyone on hear knows is the flaming obvious!) is that the reason FTB can't afford the deposit is because house prices are too high and this scheme will set up a vested interest for the government to keep prices high therefore not solving the problem.

I've noticed that point hasn't been made on the Beeb Website article though so obviously a little bit of hush hush still going on!

[Coffeehead]

Does anyone know what the process is for something like this, do they need to have a vote or have it approved by a committee or can Osborne do whatever he likes?

[billybong]

http://www.bbc.co.uk/programmes/b01s02x8

12:20 in- More or less spluttered on my cornflakes when I heard this piece this morning.

The correspondent actually reported on (what everyone on hear knows is the flaming obvious!) is that the reason FTB can't afford the deposit is because house prices are too high and this scheme will set up a vested interest for the government to keep prices high therefore not solving the problem.

I've noticed that point hasn't been made on the Beeb Website article though so obviously a little bit of hush hush still going on!

Despite their best efforts to suppress it the truth is getting to be so obvious and blatant it just keeps bubbling through.

The supposed "help for FTBers" is just a disguise to cover the support for the main VIs.

[(Blizzard)]

As I said in the other thread, the key thing is what they are going to charge the banks for this protection.

If they charge more than the market rate, or the market rate, then it will have no effect.

Only if they charge less than that will it have the effect they are hoping for - pushing up living costs - but then the tax payer is on the hook for defaults.