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How Can They Ever Stop Help2Buy?

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When phase two of Help2Buy begins, how can it be stopped from then on?

All future governments will have to commit to it, or face the prospect of house price crash and electoral death.

Are we at the point of no return?

Edited by DogTired

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When phase two of Help2Buy begins, how can it be stopped from then on?

All future governments will have to commit to it, or face the prospect of house price crash and electoral death.

Are we at the point of no return?

Not only can they not stop it, they will have to increase it. As it "succeeds" in driving HPI above wage inflation, government will have to guarantee bigger and bigger deposits. The base of the pyramid can only be supported by government.

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Not only can they not stop it, they will have to increase it. As it "succeeds" in driving HPI above wage inflation, government will have to guarantee bigger and bigger deposits. The base of the pyramid can only be supported by government.

True. +1

That is a very scary prospect.

Why the hell aren't the other parties worried about this? I know they all want HPI (insane as we all know that is), but even they must see they will be bound by it, and it will destroy every economic plan they have?

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Not only can they not stop it, they will have to increase it. As it "succeeds" in driving HPI above wage inflation, government will have to guarantee bigger and bigger deposits. The base of the pyramid can only be supported by government.

+1 Great response.

Why the hell aren't the other parties worried about this?

They have no other option. With the economic system that we have we need more debt and inflating house prices is one of the best ways the fulfill that need. They don't have a choice. If the debt does not increase we will slide towards deflation and economic oblivion.

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I have been pondering this too, but the more I think about it the more it becomes clear that it is completely unsustainable when our government is running £120 billion per year deficits.

How can the liblabcon run htb 3,4 or 5 with the productive economy in the toilet? it will only highlight the absurdity of the bubble prices. National sentiment will turn against ruinous HPI forever policy.

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+1 Great response.

They have no other option. With the economic system that we have we need more debt and inflating house prices is one of the best ways the fulfill that need. They don't have a choice. If the debt does not increase we will slide towards deflation and economic oblivion.

Have you been drinking? House price inflation is just about the worst way to grow an economy. The UK needs to deleverage if it's ever to recover. Either the UK govt finds a way to drive the phantom equity out of the UK housing market or our creditors will do it for us.

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I have been pondering this too, but the more I think about it the more it becomes clear that it is completely unsustainable when our government is running £120 billion per year deficits.

How can the liblabcon run htb 3,4 or 5 with the productive economy in the toilet? it will only highlight the absurdity of the bubble prices. National sentiment will turn against ruinous HPI forever policy.

And don't forget the (blossoming)rollover of maturing debt too, which is in addition to the deficit. LibLabCon are playing with fire using the hands of others.

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The period between now and the next election is going to be like watching a video about to buffer on Youtube.

Will coalition be able to keep streaming the bulls**t before events catch up with them?

A major EU or Asia event in late 2014 may play in to the Conservative's favour - "we got you out of the mess last time". It would give them good reason to take a bath on houseprices after the election in the hope they can engineer recovery before 2020.

Everything is building up to a major 2015/16 correction for me now.

People stressing there is going to be another big rally taking prices further out of their reach need to relax - with current multiple on avg salaries they've really got nowhere to go - yeah you can squeeze a bit more out of it with H2B, but we're in to the final phase now.

Edited by slacker

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And don't forget the (blossoming)rollover of maturing debt too, which is in addition to the deficit. LibLabCon are playing with fire using the hands of others.

Exactly, the longer they pursue this the more apparent our rising debts and declining living standards will become.

It cannot create a full blown year or two of positive gdp imo, which is what the condems are hoping for, it will be fits and starts between various HPI flavoured schemes with ed balls' mocking "flatlining" hand gesture at pmq's all over again.

it just remains to be seen how carney will react to rising bond rates.

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Have you been drinking? House price inflation is just about the worst way to grow an economy. The UK needs to deleverage if it's ever to recover. Either the UK govt finds a way to drive the phantom equity out of the UK housing market or our creditors will do it for us.

Less debt means less money. Less money means interest on outstanding debts cannot be paid and bankruptcies follow.

There is no other option at this point.

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it will only highlight the absurdity of the bubble prices. National sentiment will turn against ruinous HPI forever policy.

You think this hasn't happened before?

I was buying my first house in the 80s and have lived through the bubbles of both the 80s and 90s but still people jump on the bandwagon now. I work with people older than myself that think House prices always rise.

People do not understand where money comes from or what inflation does over time and cannot see beyond the Daily Mail headlines of "House Prices Rising = Economy Good". The economy will collapse and right up to the end they will be putting their savings in the banks and buying houses at 10* joint income.

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When phase two of Help2Buy begins, how can it be stopped from then on?

All future governments will have to commit to it, or face the prospect of house price crash and electoral death.

Are we at the point of no return?

If you know you are going to lose the next election, you could just pull the plug 6 months before claiming the economy had recovered and leave the mess for the winner.

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When phase two of Help2Buy begins, how can it be stopped from then on?

All future governments will have to commit to it, or face the prospect of house price crash and electoral death.

Are we at the point of no return?

TBH I think there is a reasonable chance they won't start the second phase if it continues the way it is at the moment.

The problem is the level of unbalance across the country. Another ramp in London is going to send prices through the roof, whereas there are other areas where some people might judge it to be necessary.

But the real issue is things outside of their control. When the Yanks decide to do their stuff no amount of "schemes" is going to save the market here.

Edit : US up another 3% :)

Edited by Gigantic Purple Slug

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TBH I think there is a reasonable chance they won't start the second phase if it continues the way it is at the moment.

The problem is the level of unbalance across the country. Another ramp in London is going to send prices through the roof, whereas there are other areas where some people might judge it to be necessary.

But the real issue is things outside of their control. When the Yanks decide to do their stuff no amount of "schemes" is going to save the market here.

Edit : US up another 3% :)

+1

I hope they don't start phase 2, but it's looming large on the horizon now.

FED and Eurozone are the wildcards. Either one could change everything.

Edited by DogTired

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The economy will collapse and right up to the end they will be putting their savings in the banks and buying houses at 10* joint income.

Is buying a house in response to impending economic failure a bad idea? Are we looking at hyper inflation? You won't be the only one who over borrowed when rates were low, something will be done to save the majority?

Im wondering if its time to jump in and be a victim like everyone else. Borrow irresponsibly, get as much as you can and owe the bank. Then its their problem?

I seriously consider this now as an appropriate response.

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Not only can they not stop it, they will have to increase it. As it "succeeds" in driving HPI above wage inflation, government will have to guarantee bigger and bigger deposits. The base of the pyramid can only be supported by government.

H2B "together" deposits @125% of valuation. A 'deposit' greater than the value of the house letting you furnish it and have a holiday on the taxpayer. Coming to a house near you.

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Is buying a house in response to impending economic failure a bad idea? Are we looking at hyper inflation? You won't be the only one who over borrowed when rates were low, something will be done to save the majority?

Im wondering if its time to jump in and be a victim like everyone else. Borrow irresponsibly, get as much as you can and owe the bank. Then its their problem?

I seriously consider this now as an appropriate response.

From an investment point of view, you buy assets when they are undervalued and sell them when they are overvalued. Housing the the UK is massively overvalued and unless you have to, then hold off as long as possible. The problem is that the markets always win and even though the government will do everything in its power to maintain high house prices the market will correct eventually via. devaluation of the currency.

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From an investment point of view, you buy assets when they are undervalued and sell them when they are overvalued. Housing the the UK is massively overvalued and unless you have to, then hold off as long as possible. The problem is that the markets always win and even though the government will do everything in its power to maintain high house prices the market will correct eventually via. devaluation of the currency.

All of that, then that. ;)

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From an investment point of view, you buy assets when they are undervalued and sell them when they are overvalued. Housing the the UK is massively overvalued and unless you have to, then hold off as long as possible. The problem is that the markets always win and even though the government will do everything in its power to maintain high house prices the market will correct eventually via. devaluation of the currency.

But not in £'s.

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H2B "together" deposits @125% of valuation. A 'deposit' greater than the value of the house letting you furnish it and have a holiday on the taxpayer. Coming to a house near you.

Thinking about it HTB is basically a 125% mortgage where the 25% is being underwritten by the politicians whose hands are in the pockets of the taxpayer. The true property value (the 100%) is less than the value of the 'mortgage.' The Government has become Northern Rock.

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the market will correct eventually via. devaluation of the currency.

It already has, if I had gold I'd be ok. Problem is Im paid in the currency thats going down the pan and that nominal value isn't going to change enough relative to the nominal value of houses. And as the currency is devalued everything else gets more expensive.

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It already has, if I had gold I'd be ok. Problem is Im paid in the currency thats going down the pan and that nominal value isn't going to change enough relative to the nominal value of houses. And as the currency is devalued everything else gets more expensive.

Well, yes. It's called inflation. It makes things more expensive. It makes mortgages more expensive since it pushes up gilt yields. More expensive mortgages = lower nominal prices.

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