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The Uk Once Led The World In Manufacturing, Now It's Help To Buy

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Poland's version:

Since 2008, as Aleksander Suslowski struggled to find a good job, he and his family and two dogs had to live with his mother-in-law in her cramped two-bedroom flat in central Warsaw.

In October, Suslowski’s five-year squeeze finally ended -- a sign that Poland’s housing market has found its footing. Four months ago, he landed a permanent job as a registered nurse at a hospital. About two months later he signed a contract for a two-story home 46 kilometers (28.6 miles) southwest of Warsaw for his family of four.

“A few years ago, we’d have never thought about our own house,” Suslowski, 31, said. “And now we went to a bank and they said, ‘Fine, we’ll give you a loan.’ ”

Suslowski is among the many recent home buyers in Poland drawn to the market by record-low interest rates and prices well below their 2008 peak. The government’s new housing program, which begins next year, will give Poles further incentive to purchase a dwelling as the economy improves.

“The positive economic environment will be a driver of the market growth next year as it may boost consumers’ optimism and their willingness to buy apartments or houses,” Wojciech Werochowski, head of retail client financing at PKO Bank Polski SA, said.

Poland, whose economy has been propped up by European Union aid funds and robust consumer spending after the government cut taxes, was the only EU member to avoid a recession following the global financial crisis in 2008.

Faster Growth

Economic growth will quicken to 2.5 percent next year in Poland, a country of 39 million people and the EU’s largest former communist nation, according to government forecasts. The economy will expand 1.5 percent in 2013 after a 1.9 percent increase in 2012.

New home loans are one of the signs of Poland’s housing rebound. They rose in 2013 to 9.53 billion zloty ($3.13 billion) in the third quarter from 8.02 billion zloty in the first period. The 26.7 billion zloty of mortgages in the first nine months of 2013 represents a 12 percent drop from the same period a year ago, echoing the economic slowdown.

For the year, the total value of new home loans will be about 60 percent of the record 57 billion zloty set in 2008 and will continue to catch up, industry analysts said. PKO Bank Polski, the largest lender in the country, forecasts that home loans will increase by 5 percent to 7 percent next year as the state’s home-buyer assistance program gains momentum.

Falling Rates

The National Bank of Poland slashed interest rates by 2.25 percentage points since November 2012 to 2.5 percent, helping lure home buyers to the market. The Polish central bank said borrowing costs will stay at an all-time low until at least the middle of next year.

The average rate on new home loans dropped to a record 5.1 percent in October from 8.8 percent in 2008, according to the central bank.

Polish apartment prices are finally rising, suggesting a growth in demand, according to a Nov. 27 report by Warsaw-based researcher Centrum Amron. Average Warsaw apartment prices rose by 1.2 percent per square meter in the third quarter from the second, the first such gain in two years.

Still, the average price is 17 percent lower than the record-high 8,774 zloty per square meter in the first quarter of 2008, according to data compiled by Amron.

Along with a steady increase in wages, Poles are now able to buy 0.7 square meter for one month’s salary. That compares with 0.4 square meter before the global credit crunch, according to data on the Warsaw-based central bank’s website.

Aid Program

The state began supporting home buyers in 2007 with a program that ended last year. More than 190,000 Poles, or a fifth of new home borrowers, benefited from the assistance that helped pay part of the loan’s interest, according to the Polish Banking Association. The government stopped the aid after the financial crisis eroded state finances.

Under the new program, which is designed for first-time home buyers under 35 years old, the government will help finance from 10 percent to 20 percent of a property’s purchase price. Buyers will not have to repay the government aid as long as they keep their home for at least five years. The state plans to spend a total of 3.6 billion zloty on the program through 2018 and set aside 600 million zloty for 2014 alone.

The program may help add as much as 6 billion zloty in new home loans, according to Bloomberg calculations.

Boosting Sales

“There’s no doubt the government initiative will have an important impact on the housing market in 2014,” Malgorzata Ostrowska, a board member at homebuilder J.W. Construction Holding SA, said by e-mail.

The government support will benefit younger Poles who have had trouble getting into the property market.

Without state aid many younger people couldn’t afford to buy their first home,” Oscar Kazanelson, the chairman of the supervisory board and a shareholder of Warsaw-based real estate developer Robyg SA, said in an e-mail. “We estimate the new program has a chance to boost new apartment sales by as much as 10 percent.”

Wojciech Kwasniak, who oversees banks at Komisja Nadzoru Finansowego, Poland’s financial markets regulator, is more pessimistic. He said there may not be enough people who need a home loan to make the new program successful.

“I’d expect weak demand may be a major problem now,” he said.

House Search

Suslowski found his home after looking for nine months for a place that would include a garden for his children and proximity to his work. He agreed to pay 330,000 zloty for the house, taking a 290,000 zloty mortgage.

He made sure not to take on too much debt, a trend that helped pop the region’s real-estate bubble in 2008. His mortgage payments will eat up only a fifth of his take-home wages.

“The loan is a must because there’s no chance to buy even a dilapidated house without credit,” Suslowski said. “The most important thing for us was not to be over-leveraged.

http://www.bloomberg.com/news/2013-12-18/poles-with-record-low-rates-spark-housing-turnaround-mortgages.html

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Our innovative Shared Ownership as well....

Netherlands follows Britain's lead on social housing

The Dutch approach is changing under austerity, taking many principles from recent British housing policies

The Netherlands, as well as much of Europe, do not share the UK's culture of homeownership. Figures show that as many as 54% of Dutch households live in rented accommodation, with only 13% renting from private landlords. The negativity associated with social housing in the UK does not exist in the Netherlands, where the reality is that almost everyone has a friend, or parent or grandparent, living in social housing. In fact, it is estimated that in most major Dutch cities in the 2000s, social housing accounted for more than half the population's housing tenure.

Like most of European countries, the Netherlands is now taking a good, hard look at its housing policies. One of the ideas under consideration is whether shared ownership, an uncommon but not unheard of model in the country, could cross-subsidise other social housing tenures if appropriately targeted at different groups of purchasers. Evidently, this issue of making subsidy go further is as relevant to Dutch housing providers as it is for us.

Influenced by fiscal constraints, combined with a move towards a more populist rhetoric about "scroungers", housing allocations in the Netherlands have become more targeted and less universal – similar to how British social housing allocations changed in the 1970s. The most recent Dutch coalition agreement specifically states that the social housing sector will have to allocate housing by needs, with the most in need of social housing at the top of the queue, and encourage others in the social sector to move. As a result of this, in 2011, at least 90% of housing association dwellings were allocated to people with an annual household income of less than €33,614 (£28,800), a significant shift from previous years when access to social housing was less about income and more about equality.

Yet while the UK government looks to introduce a pay-to-stay policy, under which high-earning social tenants will be forced to pay market rent to stay in their social homes, its Dutch counterparts are taking a slightly different approach. As part of the coalition agreement, Dutch households renting from the social sector with an annual income of less than €43,000 will not see their rent increase by more than the rate of inflation. But if a household earns more, the rent will increase by up to the rate of inflation, plus 5%.

This policy will act as a major disincentive to those people who want to stay in their homes but are also working to improve their financial prospects. To put it simply, a blunt instrument is being used to deal with a delicate situation. The Dutch may therefore find that alternatives, such as shared ownership, start to look increasingly attractive.

http://www.theguardian.com/housing-network/2013/jun/21/netherlands-britain-social-housing-provision

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Our innovative Shared Ownership as well....

One of the facetious reason I put forward for voting UKIP is that it might save Europe from the plague-ship anchored across the Channel. The City of London is as great a menace to the rest of the world as it is to the UK.

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I think the British economy gets a raw deal on here.

Out of the 600 companies in the Euro Stoxx 600 index we are the biggest contributor, with 185 of them to France's 82 and Germany's 66. Out of our 185 only 33 are finance related. We also have large amounts (relative to other countries) in industrial goods & services, utilities, food and beverage, media, healthcare, basic resources and chemicals.

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I think the British economy gets a raw deal on here.

Out of the 600 companies in the Euro Stoxx 600 index we are the biggest contributor, with 185 of them to France's 82 and Germany's 66. Out of our 185 only 33 are finance related. We also have large amounts (relative to other countries) in industrial goods & services, utilities, food and beverage, media, healthcare, basic resources and chemicals.

and bailiffs.

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I think the British economy gets a raw deal on here.

Out of the 600 companies in the Euro Stoxx 600 index we are the biggest contributor, with 185 of them to France's 82 and Germany's 66. Out of our 185 only 33 are finance related. We also have large amounts (relative to other countries) in industrial goods & services, utilities, food and beverage, media, healthcare, basic resources and chemicals.

There may be a good few stock market listed company's, but as most people have seen there have been thousands of factories across the country closed and shipped to foreign shores, the list is endless.

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I think the British economy gets a raw deal on here.

Out of the 600 companies in the Euro Stoxx 600 index we are the biggest contributor, with 185 of them to France's 82 and Germany's 66. Out of our 185 only 33 are finance related. We also have large amounts (relative to other countries) in industrial goods & services, utilities, food and beverage, media, healthcare, basic resources and chemicals.

Many of even the largest companies in germany and france are still privately owned. The capitilisation of the stock market is not necessarily relevant to a country's economic output.

Edited by BigPig

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The Netherlands, as well as much of Europe,

That's granuiid BS.

Home ownership rates in the Netherlands is higher than the UK.

Netherlands is mid-way thru a massive house bubble deflation at the mo.

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One of the facetious reason I put forward for voting UKIP is that it might save Europe from the plague-ship anchored across the Channel. The City of London is as great a menace to the rest of the world as it is to the UK.

It's not facetious at all. it makes far more sense for Europe not to have Britain in. One of the main strategies of the EU (especially from a french perspective) is to be able to be a competitor (or at least a counterweight) to the USA. That makes no sense for the UK, which, whether you like it or not, has a massive advantage in maintaining its ties to the USA.. And all the Thatcherite reforms that the EU is forcing on its member now is just so uneuropean. I sometimes feel sorry for the French, they were right all along about letting us in.

Plus, any reason to vote UKIP is a good reason.

Edited by BigPig

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That's granuiid BS.

Home ownership rates in the Netherlands is higher than the UK.

Netherlands is mid-way thru a massive house bubble deflation at the mo.

I'm sure I posted something on here about them deciding to limit mortgages to just 100% LTV instead of 106% but cannot find it. I found a funny looking draft document on the BIS website from 2010

In other words, currently the housing market for owner-occupiers in the Netherlands, is overvalued by around 100%

http://www.bis.org/ifc/events/5ifcconf/xu.pdf

My favourite bit was the Conclusions and Policy Recommendations on page 53

[section to be included]

They didn't know where to start!

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Many of even the largest companies in germany and france are still privately owned. The capitilisation of the stock market is not necessarily relevant to a country's economic output.

Spot on, the stock market is a place where many successful companies would not want to be. In Germany companies such as Bosch, Miele, Aldi, Lidl (To name some we know about in the UK) are all private.

In the UK a company like Bosch would probably have ended up on the stock market a long time ago. It employs over 300,000 people and has revenues of over 50 billion euro per year. The stock market tells you very little about the wealth of a county.

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I think the British economy gets a raw deal on here.

Out of the 600 companies in the Euro Stoxx 600 index we are the biggest contributor, with 185 of them to France's 82 and Germany's 66. Out of our 185 only 33 are finance related. We also have large amounts (relative to other countries) in industrial goods & services, utilities, food and beverage, media, healthcare, basic resources and chemicals.

This is true. BUT, we have far fewer small and medium size enterprises. Our finance based co's are also a far higher proportion of the 'economy' than is prudent - so quoting the number of Co's and not their proportion of the economy is misleading. We have a manufacturing base which has shrunk to about 12% of the economy, from over 30% in 1979. Our exports have been falling lately, our savings the lowest for 40 yrs, our balance of payments the worst fro 25yrs. Germany has a far more balanced economy, with a high proportion f manaufacturing and exports are healthy. Their land costs are controlled and therefore their cost of living is much lower. We are a mess because of govt decisions over the last 60yrs and leading to very high house prices and therefore wage costs and now a,lower standard of living. Interestingly UKIP policies would have amuch better chance of correcting these problems...

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