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The Masked Tulip

This Moronic Mortgage Scheme Can Only End In Tears

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A nice concise piece.

Logic dictates that the solution to the problem of overly expensive housing is for housing to become cheaper. The government 'solution' is to use the resources of the state to keep prices as high as possible and maintain the debt load.

The bottom line is that the government is so desperate to keep the money supply growing that they will do anything they can do encourage ever larger amounts of debt. House prices are clearly seen as the primary engine for credit creation.

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I think not just in your view, MT. To say it's had a bad press is an understatement. True, mostly along the lines of the 'downside risk' cliche, rather than it being morally indefensible from the get go. But still, a universal panning.

You can now understand the rise and rise of UKIP. The Tories can't really offload all the blame on to Labour when they were clearly the least effective opposition in living memory. Which has translated into an inept and impotent Government. Blair's infamous war with Iraq would never have happened without Tory support. The Labour back benches were far more vociferous opponents . . . which is why people like Claire Short and Robin Cook just had to go . . . in their different ways.

I think Dave might have to dump his moronic chum over this one . . . the untimely sell-off of RBS is also looking like political dynamite.

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From the moneyweek link

Edwards thinks this doesn’t go far enough, given the utter disregard of this policy to both the market and the wellbeing of the UK population

Summed up in a nutshell.

Edited by billybong

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when he said that “Help to Buy is a reckless scheme that uses public money to incentivise the banks to lend precisely to those individuals who should not be offered credit.

Again this scheme wants to position reckless malinvestors to the front position for house buying. People who shouldn't be offered credit and wouldn't be in a market with a hope of buying were it not for Gov intervention. Intervention which ushers them ahead of better positioned buyers who are waiting for better housing value. Just as in 2003-07 with higher multiples, self-cert and 100% mortgages. Except even more so.

Help-To-Buy. FLS. Co-op Bank has burnt through millions from the FLS (took £900m in FLS funding) in the first 3 months of this year, helping to place young malinvestors - many of whom don't read anything about politics, current affairs, financial - infront of those better positioned and waiting for value. I'm wary because there are enough reckless people willing to take up Help-To-Buy to give a 5 year support to prices, or even push them up. They will not victims (now or in 2019 when requested to pay a fee on Help-To-Buy loan), but government funded market competition.

But a Co-op spokesman said: “We made a clear decision that we would use our Funding for Lending money to support our retail customers and in particular for mortgages for first-time buyers.

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I think not just in your view, MT. To say it's had a bad press is an understatement. True, mostly along the lines of the 'downside risk' cliche, rather than it being morally indefensible from the get go. But still, a universal panning.

You can now understand the rise and rise of UKIP. The Tories can't really offload all the blame on to Labour when they were clearly the least effective opposition in living memory. Which has translated into an inept and impotent Government. Blair's infamous war with Iraq would never have happened without Tory support. The Labour back benches were far more vociferous opponents . . . which is why people like Claire Short and Robin Cook just had to go . . . in their different ways.

I think Dave might have to dump his moronic chum over this one . . . the untimely sell-off of RBS is also looking like political dynamite.

Bad Press? In the papers yes. BBC just cant seem to get enough of it. Simultaneously they were just on R2 and R4 singing its praises and how shoving more credit onto a fixed supply of houses wont make housing more unaffordable. Its economic voodoo talk Stephanie flounders would be proud of.

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I think not just in your view, MT. To say it's had a bad press is an understatement. True, mostly along the lines of the 'downside risk' cliche, rather than it being morally indefensible from the get go. But still, a universal panning.

You can now understand the rise and rise of UKIP. The Tories can't really offload all the blame on to Labour when they were clearly the least effective opposition in living memory. Which has translated into an inept and impotent Government. Blair's infamous war with Iraq would never have happened without Tory support. The Labour back benches were far more vociferous opponents . . . which is why people like Claire Short and Robin Cook just had to go . . . in their different ways.

I think Dave might have to dump his moronic chum over this one . . . the untimely sell-off of RBS is also looking like political dynamite.

Osborne is the Tory equivalent of Labour's Healey in the 1970's - absolutely without a clue.

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Osborne is the Tory equivalent of Labour's Healey in the 1970's - absolutely without a clue.

We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists, and in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step.

It's clear we don't have a Callaghan anywhere near govt.

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...what this thick current Government fails to understand is Labour treated the economy like a scam...which means when they are now doing the same ...they are unaware......tyrants.....and there are no alternatives ...where do we go now...?...we need a new movement ...the MW magazine is aware ..there are sensible people out there....we need them in Government instead of the clueless professional politicians from Oxbridge both sides of Parliament....they have the nerve to call them leaders...! ..... :rolleyes:

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Encouraging a property bubble with interest rates below what they were in two World Wars plus a £120bn deficit which is not reducing and £375bn of QE with the prospect of billions more is reckless in the extreme. And in the end the Tories will still not win the election so the carnage will have been for nought.

The standard of MSM news reporting is disgraceful. You've summed it up, except it would be a bubble on top of a massively unsustainable and unfair property bubble with massive wealth in the possession of older home-owners, and the massively over-leveraged who can't survive a few points of higher interest rates. The MSM studiously ignores that, mostly.

It doesn't help that too many older owners still tell younger people they can't go wrong with property, small island, growing population. I'd like to see them learn the hard way, and you can't do that without affecting those with big debt. Sympathy only keeps us priced out, and the bad decisions rewarded.

However no one should be taking their bearings from the MSM. What was all the billions of pounds wasted on under Blair's education education education policies? These would-be Help-To-Buy takers only have to scratch underneath the surface to see some of the dangers, and history and facts of 100%+ mortgages, many multiples of income, after prices already doubled to extreme levels, should be enough to unsettle many people. And if it didn't then their circumstances don't rank infront of those who did see the risks and dangers.

There's PhDs on here priced out, and top end IT people, and even young partners at Magic Circle City firms/international firms, who can't afford to buy, or don't want to at these painful prices levels. Help-To-Buyers don't deserve to jump the queue (again as per 100% self-cert mortgages of the mid 2000s, plus all the HPI going back before that.) One Insolvency group says accountancy still contracting and restructuring post 2007 credit-crunch, and that sector is only 10% the size of the legal sector. Them next.

http://abovethelaw.com/2012/10/inside-straight-london-partners-cant-afford-homes/

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Always good for a laugh, Keiser on Osborne/Gidiot/Moron/Ponzi Help To Buy policy:

Keiser Report - Episode 454

Although relatively calm today, the Valium prescription must have arrived, they always remind me of a couple of coke heads, way too skinny and hyper.

Edited by DarkHorseWaits

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Always good for a laugh, Keiser on Osborne/Gidiot/Moron/Ponzi Help To Buy policy:

Keiser Report - Episode 454

Although relatively calm today, the Valium prescription must have arrived, they always remind me of a couple of coke heads, way too skinny and hyper.

"An inveterate crony Capitalist"

Keiser bang on the money with Osborne, cheers for posting.

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Osborne is the Tory equivalent of Labour's Healey in the 1970's - absolutely without a clue.

fair enough, but fresh instructions from the bankers are being given to him this weekend at Bilderberg...

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Of course it will end in tears but the political aim is that will be someone else's problem.

This is all about getting the Banks loan books out of insolvency on their watch, even if it means setting up a few naive youngsters as cannon fodder. But I agree this can only lead to further problems down the road if these new loans turn bad.

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This is all about getting the Banks loan books out of insolvency on their watch, even if it means setting up a few naive youngsters as cannon fodder. But I agree this can only lead to further problems down the road if these new loans turn bad.

They can't turn bad. Either the borrowers pay up as the economy returns to 'normal' or they don't and the government print/restructure to keep the banks whole.

Its a rigged government controlled market now as Paxo said the other day.

I'm beginning to think if you can,t beat 'em...... <_<

But I want to vomit every time I think it.

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The real problem is not getting in- but getting out. How do they end this support for prices without crashing the market? So it's a one way ticket to a state backed housing market-

Deeply ironic from the party that styles itself an advocate of the free market principle. Turns out that the free market is an important principle when it comes to job losses and wages- but not important at all when it comes to propping up asset prices.

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This is all about getting the Banks loan books out of insolvency on their watch,

Tricking people into debt that they will not be able to repay when interest rates rise is not going to help. When rates rise, as they inevitably will, more people will go bust and more loans will be defaulted upon.

Instead of giving away money they don't have to prop up house prices the state should make a huge profit by buying land without planning permission, granting it planning permission and selling it. Everyone would win. The state gets more money, builders get more work and ordinary people get a place to live. What's not to like?

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I bloody well hope Osborne gets voted out at the next General Election for this. The 'Help to Buy' scheme is seriously f**ked up. :angry: I always thought the Tories were the party of 'free market economics' . Why on Earth are they tampering with the housing market?

It's the rented housing market that needs some government intervention. New policies could be: providing funds for new council housing (in very short supply), and capping private rentals to a fair level.

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The real problem is not getting in- but getting out. How do they end this support for prices without crashing the market? So it's a one way ticket to a state backed housing market-

Deeply ironic from the party that styles itself an advocate of the free market principle. Turns out that the free market is an important principle when it comes to job losses and wages- but not important at all when it comes to propping up asset prices.

Borrow your house and take the money........but don't complain when you can't get out of the deal and find yourself stuck paying for something you didn't intend to for so long....... time and freedom is worth more than money. ;)

http://www.youtube.com/watch?v=Zww7FQILQec

Edited by winkie

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There's thread after thread on MSE forum mortgage section of people wanting to use Help-To-Buy, some of whom are already carrying massive debt, and not flinching at the really high asking prices. An asking price of £250K or £300K, means paying £250K or £300K to them. They just want the debt for the home or BTL or second home they are entitled to.

Also thread after thread in the mortgage section of those wanting to let-to-buy. Many threads of those seeking help to get into BTL. Even one couple who want to buy a new home and leave their other home empty as second home, without renting it out, whilst not in any overly secure financial position.

That's despite the severe part of the credit crunch only being a few years ago, the great reflation still carrying austerity dangers and risks of a sudden second crash or/with interest rates forced up. And it's been that way every time I've checked that forum, every four months or so, and other forums, for the past few years.

Meanwhile at HPC we have those who still make excuses for those who bought in 2004-2007, claiming they were lured into it / misled / told by their parents it only goes up ect.

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There's thread after thread on MSE forum mortgage section of people wanting to use Help-To-Buy, some of whom are already carrying massive debt, and not flinching at the really high asking prices. An asking price of £250K or £300K, means paying £250K or £300K to them. They just want the debt for the home or BTL or second home they are entitled to.

Also thread after thread in the mortgage section of those wanting to let-to-buy. Many threads of those seeking help to get into BTL. Even one couple who want to buy a new home and leave their other home empty as second home, without renting it out, whilst not in any overly secure financial position.

That's despite the severe part of the credit crunch only being a few years ago, the great reflation still carrying austerity dangers and risks of a sudden second crash or/with interest rates forced up. And it's been that way every time I've checked that forum, every four months or so, and other forums, for the past few years.

Meanwhile at HPC we have those who still make excuses for those who bought in 2004-2007, claiming they were lured into it / misled / told by their parents it only goes up ect.

love the second one

already owes £130,000

'thinks' her flat is worth £200,000 despite the £150+ per month charges and the fact her other half has to travel 3 hours a day to earn circa £30K (i.e. it ain't LDN)

gives no shits and wants another house anyway, with her only concern being how much she can borrow

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You do know that prices are going to rise don't you ... if you don't take this opportunity you will never be able to buy ... Help To Buy is the name of the scheme ... prices are now rising faster than they have for the last two years.

The MSM spout this all the time and you can see how uninformed will jump in to make the scheme a success ... like IO 125% mortgages on 8X salaries in 2007 and 2008. People making the largest purchase of their life with a ten plus year commitment driven by FUD (Fear Uncertainty and Doubt). The MSM are evil and even they think HtB is not good.

Encouraging a property bubble with interest rates below what they were in two World Wars plus a £120bn deficit which is not reducing and £375bn of QE with the prospect of billions more is reckless in the extreme. And in the end the Tories will still not win the election so the carnage will have been for nought.

FUD is what people who will buy under this scheme most properly will have but they go ahead with it anyway simply because 'we are all in this together' therefore if/when it goes wrong there will be a bailout awaiting or some sort of blame claim compensation like everything else and everyone else gets, people nowadays are rewarded for their stupid actions....moral hazard.

You got nought why not borrow and jump into the deep end, you can't lose out when you already have nought. ;)

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It is noticeable how little defence of the policy is to be seen or heard from George's colleagues.

Is it possible that even they can see the folly and don't want to be associated with it if it gets pulled `due to unforeseen or changing circumstances`? I have written detailed questions to my (Tory) MP (first time over a month ago) and had no reply. I suspect the MP doesn't want to be pushed into backing the policy. Has anyone else had any luck getting actual answers or opinions from an MP?

With both the nursery worker issue, and the sell off of the forests issue - one Tory was left isolated when the policy collapsed.

After the politically disastrous budget of last year `granny tax', `pasty tax' etc - Georgie boy could have used up his lives. Let's hope so.

Y

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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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