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Osborne: Vigilance Needed On Household Debt

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http://www.bbc.co.uk/news/business-26865023

Chancellor George Osborne said authorities must be "vigilant" on household debt after families added £1tn of debt in the 10 years to 2007.

But, the value of "household assets are rising faster than household debts," Mr Osborne said.

He was answering questions from parliament's Treasury Select Committee.

Better mortgage regulation banning customers from getting mortgages without proving they can afford them should help, he said.

MP Mark Garnier was questioning Mr Osborne on whether the UK's economic recovery was too dependent on people borrowing and spending.

House prices will also need to be carefully monitored, said Mr Osborne.

"You should at least draw distinction between some of the phenomena you see in central London, which is caused by international money and the like coming into central London property as a form of investment, and what you see in most other places."

Hilarious stuff especially as Osborne economic plan is to increase household debt via higher house prices!

He always looks like a rabbit caught in the headlights.

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http://www.bbc.co.uk/news/business-26865023

Hilarious stuff especially as Osborne economic plan is to increase household debt via higher house prices!

He always looks like a rabbit caught in the headlights.

Haven't we been here before?

http://www.bankofengland.co.uk/publications/Pages/news/2012/030.aspx

http://www.housepricecrash.co.uk/forum/index.php?showtopic=176515&st=0

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Interesting snippet from this session:

OSBORNE EVIDENCE 11:12: Theresa Pearce asks again about whether Mr Osborne knew if people would invest their pension in property as a buy-to-let investment. She says her colleagues on the committee did not get a clear answer. George Osborne says it is really all down to the Office for Budget Responsibility: "We did not look at this because the OBR makes this assessment for us. They had all the details. If the had felt it had had an impact we would know."

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Better mortgage regulation banning customers from getting mortgages without proving they can afford them should help, he said.

Every Help to Buy mortgage is someone buying a house they cannot really afford or else the schemes wouldn't be necessary.

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"You should at least draw distinction between some of the phenomena you see in central London, which is caused by international money and the like coming into central London property as a form of investment, and what you see in most other places."

Increasing the control "international money" has over London and then in time the UK as a whole.

So the bits that aren't controlled by increasing eu regulation become increasingly under the control of "international money".

Edited by billybong

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It sounds like the government plans for pensioners to buy up the remaining stock of properties that are or sale whilst simultaneousness preventing first time buyers from getting in.

Time will tell.

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Buying an asset with debt because the price of the asset is rising is the definition of ponzi finance.

"monitoring closely" and "remaining vigilant" are straight out of Carney's FPA mouth.

This is clearly a planned housing market ponzi scheme. They're all in it together.

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Mortgage Works increased their btl age limit to 70

If its a business, why any limit at all?

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OSBORNE EVIDENCE 11:12: Theresa Pearce asks again about whether Mr Osborne knew if people would invest their pension in property as a buy-to-let investment. She says her colleagues on the committee did not get a clear answer. George Osborne says it is really all down to the Office for Budget Responsibility: "We did not look at this because the OBR makes this assessment for us. They had all the details. If the had felt it had had an impact we would know."

The answer does seem a bit wishy washy and evasive.

Rather than don't know shouldn't he have given a fuller more definitive answer because he has a responsibility to know and the OBR has a responsibility to tell him. Things creating possible risks with UK house prices do require monitoring as well as vigilance you know.

Shouldn't Teresa Pearce have asked him to ask the OBR. Shouldn't he have offered to ask them.

http://

en.wikipedia.org/wiki/Chancellor_of_the_Exchequer

Chancellor of the Exchequer

The Chancellor of the Exchequer is the title held by the British Cabinet minister who is responsible for all economic and financial matters, equivalent to the role of Minister of Finance or Secretary of the Treasury in other nations. Often simply called the Chancellor, the office-holder controls HM Treasury. The position is considered one of the four Great Offices of State, and in recent times has come to be the most powerful office in British politics after the Prime Minister.

http://

budgetresponsibility.org.uk/about-the-obr/what-we-do/

We have four main roles:

We produce five-year forecasts for the economy and public finances twice a year. The forecasts accompany the Chancellor’s Budget Statement (usually in March) and his Autumn Statement (usually in late November) and they incorporate the impact of any tax and spending measures announced by the Chancellor.

....

....

Edited by billybong

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But, the value of "household assets are rising faster than household debts," Mr Osborne said.

By 'household assets are rising', does he mean housing equity?

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Is there any other form of asset?

I dunno, it just seems so flipping dumb for a chancellor to say this, that I had to question it.

What he is saying is...

It's ok that household debt is rising because it can be cleared with equity (taking on mortgage debt).

Equity, may I add, that has created artificially, in part, by banks lending too much money against housing.

What have we done to deserve debt-pushing assholes like this in charge?

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Every Help to Buy mortgage is someone buying a house they cannot really afford or else the schemes wouldn't be necessary

Exactly- Osborne is in effect perverting the lending criteria being used by the banks by offering them a taxpayer backed guarantee to lend money to people who they would rather not lend money to without that guarantee.

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Guest spp

Market manipulation - HTB, interest rates, housing benefit in private market...we are all rich!

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I dunno, it just seems so flipping dumb for a chancellor to say this, that I had to question it.

What he is saying is...

It's ok that household debt is rising because it can be cleared with equity (taking on mortgage debt).

Equity, may I add, that has created artificially, in part, by banks lending too much money against housing.

What have we done to deserve debt-pushing assholes like this in charge?

I think Yvette Cooper said the same thing.."of course, having all this debt is proof we can afford it"

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I dunno, it just seems so flipping dumb for a chancellor to say this, that I had to question it.

<snip>

The madness of the phrase has seems to grow every time I think about it. Is it possible he really doesn't understand what he's just said?

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