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Help To Buy Unravelling

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Wonderful article at http://blogs.telegraph.co.uk/news/iainmartin1/100213209/osbornes-daft-help-to-buy-scheme-is-unravelling/

And having got into the mortgage market, the Government will find it difficult to get out. The report says: "Our concern is that, should the current scarcity of high loan-to-value mortgages reflect structural rather than cyclical factors, the pressure for Government to extend the scheme in three years time will be immense. The unintended and unwelcome outcome could well be that a scheme designed to deal with a supposedly temporary problem in the UK housing market becomes a permanent feature of the UK housing market."

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I thought the telegraph was a tory paper?.....they are absolutely right in what they are saying...shooting themselves in the foot. ;)

It is. This is not a conservative policy based on conservative ideals. It is madness, whoever came up with it and whoever believes it to be the right response to these circumstances is not a conservative. We have a coalition government, but regardless, I wonder if a conservative party exists anymore.

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"Help to Buy" seems to me like a classic distraction policy - I hope so.

Basically the last budget contained nothing of interest whatsoever. So they decided to announce something that comes into force a year or so down the line to distract peoples attention and give the opposition something unimportant to get their teeth into.

It wouldn't surprise me if it dies a quiet death. The reason given something along the lines of "market is doing ok we think now, so we don't need to implement it".

This government is going down the pan. It is making the classic mistake that someone somewhere pointed out (I can't remember where), it is reacting to the media opinion rather than issuing the policy that it believes is right for the country.

The bottom line is that anything you do in the current climate is going to piss some people off one way or another. Rather than being conviction politicians I get the impression the Tories are constantly dishing out ill thought out policies and then desperately waiting for media approval. It's a shite way to run a country. Or indeed a shite way to run anything. Democracy comes about once every five years. Between those points you've got to get your ass in gear and do something to define who you are and make a difference.

Thatchers statement was "this ladies not for turning". Camerons statement could be "this gentlemens for turning at every opportunity".

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thats asuming that Osborne didnt mean it to be permanent, but announced in a temporary guise. A LA QE, or FLS etc

The £600k cap implies to me that he means it to be ongoing - I suspect it is in preparation for moving the £500k stamp duty threshold to £600k to engineer a further boost to the market. I can't think of any other explanation for the £600k figure.

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He reveals that Help to Buy was "introduced despite the near-universal opposition of Treasury officials and without consulting the BOE."

Osborne's cooked this up with Clown Carney.

It won't be dying a death - together with a string of undervalued privatisations it's the only economic policy he has.

Remember, he doesn't care about the consequences as long as he gets re-elected. A true pyscho.

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Osborne's cooked this up with Clown Carney.

It won't be dying a death - together with a string of undervalued privatisations it's the only economic policy he has.

Remember, he doesn't care about the consequences as long as he gets re-elected. A true pyscho.

:lol: He has less chance of being re-elected than the scheme working, and that is saying something.

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"Help to Buy" seems to me like a classic distraction policy - I hope so.

Basically the last budget contained nothing of interest whatsoever. So they decided to announce something that comes into force a year or so down the line to distract peoples attention and give the opposition something unimportant to get their teeth into.

It wouldn't surprise me if it dies a quiet death. The reason given something along the lines of "market is doing ok we think now, so we don't need to implement it".

This government is going down the pan. It is making the classic mistake that someone somewhere pointed out (I can't remember where), it is reacting to the media opinion rather than issuing the policy that it believes is right for the country.

The bottom line is that anything you do in the current climate is going to piss some people off one way or another. Rather than being conviction politicians I get the impression the Tories are constantly dishing out ill thought out policies and then desperately waiting for media approval. It's a shite way to run a country. Or indeed a shite way to run anything. Democracy comes about once every five years. Between those points you've got to get your ass in gear and do something to define who you are and make a difference.

Thatchers statement was "this ladies not for turning". Camerons statement could be "this gentlemens for turning at every opportunity".

I think rather than completely dump it, they'll opt for charging not particularly competitive rates for the guarantee. That way they avoid (another) massive u-turn, partially cover themselves against it going t1ts up, and can claim to have tried to help hard-pressed ftbs.

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I note also that a former colleague at the Wall Street Journal, the impeccably informed Simon Nixon, has touched on the subject in his column today
.

Search: Osborne Is Losing His Allies on All Sides

We need his 'quickest way', which is also the fairest way, after decades of HPI that has made older owners homes worth fortunes. Not the second approach we've been enduring.

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.

Search: Osborne Is Losing His Allies on All Sides

We need his 'quickest way', which is also the fairest way, after decades of HPI that has made older owners homes worth fortunes. Not the second approach we've been enduring.

Terrific analysis that's worth quoting:

Mr. Osborne's "Help to Buy" program—which was introduced despite the near-universal opposition of Treasury officials and without consulting the BOE—is a crude attempt to subvert the new Basel III rules that the U.K. helped devise. Its aim is to allow banks to purchase government insurance that will effectively turn a 95% loan-to-value mortgage into a 70% LTV mortgage for regulatory purposes, thereby substantially reducing the capital charge for the banks. Mr. Osborne hopes the resulting cheaper loans will bring first-time buyers back into the stagnant U.K. housing market, boosting the economy.

But as the House of Commons Treasury Select Committee has pointed out in an excoriating report, Mr. Osborne's policy looks flawed. What would bring first- time buyers back into the market is a fall in house prices, not a policy that seems certain to drive prices higher.

Mr. Osborne says the fee charged by the government for its insurance will be set to cover potential losses. But it may be years before it becomes clear what risks are being borne by taxpayers. And while Mr. Osborne says the BOE will decide whether the program is extended after three years, the pressure to keep it going to avoid future house-price falls is sure to be intense. Fannie Mae, FNMA -1.37% the U.S. government-sponsored mortgage agency created in response to the Great Depression, played a central role in the current crisis.

Rather than try to induce one of the most indebted private sectors in the world to take on more debt, Mr. Osborne would do better to focus his fiscal strategy on helping the private sector deleverage. Reluctant to further expand the government's balance sheet both for political reasons and for fear of forfeiting the confidence of markets, he is planning instead to expose taxpayers once again to large contingent liabilities in the hope that these policies spur sufficient growth to ensure these liabilities never crystallize. History suggests it's a bold bet. After all, as Mr. Osborne is fond of saying: "You can't borrow your way out of a debt crisis."

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Terrific analysis that's worth quoting:

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Agreed , and the following quote is the answer to a question I have asked here http://www.housepricecrash.co.uk/forum/index.php?showtopic=189016

Mr. Osborne's "Help to Buy" program—which was introduced despite the near-universal opposition of Treasury officials and without consulting the BOE—is a crude attempt to subvert the new Basel III rules that the U.K. helped devise. Its aim is to allow banks to purchase government insurance that will effectively turn a 95% loan-to-value mortgage into a 70% LTV mortgage for regulatory purposes, thereby substantially reducing the capital charge for the banks.

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Agreed , and the following quote is the answer to a question I have asked here http://www.housepric...howtopic=189016

Mr. Osborne's "Help to Buy" program—which was introduced despite the near-universal opposition of Treasury officials and without consulting the BOE—is a crude attempt to subvert the new Basel III rules that the U.K. helped devise. Its aim is to allow banks to purchase government insurance that will effectively turn a 95% loan-to-value mortgage into a 70% LTV mortgage for regulatory purposes, thereby substantially reducing the capital charge for the banks.

everyone seems to be forgetting the same scheme that many local Authorities have themselves been rolling out for a year now.

Essex has one....designed to "HELP" 6000 Ftbs into a home...

Its helped 1 so far as the front page is concerned.

You might well get a cheaper loan at 70% than 95%, but stricter lending criteria will still prevent most applicants dead in their tracks...

Edited by Bloo Loo

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It is. This is not a conservative policy based on conservative ideals. It is madness, whoever came up with it and whoever believes it to be the right response to these circumstances is not a conservative. We have a coalition government, but regardless, I wonder if a conservative party exists anymore.

The conservative party's ideology has been, at least since thatcher and probably long before, an uneasy and self-contradictory mix of conservatism and liberalism. This policy is neither.

However, this ideological mishmash has been adopted solely to enrich the ruling classes, who benefited from conservatism when they were land owning aristos, and liberalism once they took up to capitalism.

This policy is designed to do the same thing, make the rich richer. Presumably Osbrown feels that enough people will benefit, or be fooled into thinking they benefit, that he can ditch any kind of ideological excuse.

It is corruption. Nothing more, nothing less.

Edited by (Blizzard)

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funny as fck, you sound like a guardianista but from the other side

not to worry, you can keep on blaming G Brown or the Democrats,the guardian can keep on blaming maggie and the republicans, meanwhile those you mandate power to can keep running the debt cycle and extracting the urine to their apparatchiks

You'll doubtless have noted the use of the small 'c' in the quote you responded to. Is this policy the work of a true conservative? Certainly not. Cybernoid's point is entirely valid, and it has nothing to do with tribal loyalties.

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Mr. Osborne's "Help to Buy" program—which was introduced despite the near-universal opposition of Treasury officials

I'd like to know what the source is for that. I've not seen any evidence whatsoever of such sanity from Treasury officials. There doesn't seem to have been a de-Brownification since the crisis.

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I'd like to know what the source is for that. I've not seen any evidence whatsoever of such sanity from Treasury officials. There doesn't seem to have been a de-Brownification since the crisis.

The source must be Treasury officials themselves. And that is the best sign that the policy is indeed under attack, and from within. :)

Edit: Has this policy been voted already?

.

Edited by Tired of Waiting

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Osborne's cooked this up with Clown Carney.

It won't be dying a death - together with a string of undervalued privatisations it's the only economic policy he has.

Remember, he doesn't care about the consequences as long as he gets re-elected. A true pyscho.

This is what struck me from the start about this, and now absolutely crystal clear if this story of near universal opposition is accurate. Carney was attractive to GO because inflating house price bubbles is the name of his game. Carney accepted the BoE job if the tools to inflate the bubble were there, and he got them. He got control of the levers too to further inflate down the line. Where it goes from here if there really are problems under the surface remain to be seen, but Osborne's not going to disappoint his Canadian bankster boy without a fight.

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Osborne's cooked this up with Clown Carney.

It won't be dying a death - together with a string of undervalued privatisations it's the only economic policy he has.

Remember, he doesn't care about the consequences as long as he gets re-elected. A true pyscho.

+1 -good comment.

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Has anybody asked whether Carney was consulted over this policy? Can any of us get a politician or two to ask the question? Osborne is politically vulnerable. Very vulnerable. Time to crank up the pressure a bit!

Edited by gruffydd

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  • 241 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%



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