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Ft: Former Chancellors Slam Help To Buy

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Front page of the FT.

Posting intro here


Three former chancellors of the exchequer have urged George Osborne to rethink his Help to Buy programme, with the OECD also calling on the governemnt to scale back the mortgage support scheme.

Lord Lawson, Lord Lamont and Alistair Darling - all predecessors at the Treasury - said the second phase of the scheme, which guarantees very high loan-to-value mortgages, has the potential to inflate a future housing bubble...

Rest of the article is worth reading, with quotes from them. No comment from Brown though :rolleyes:

Also see that an article titled Yellen Warns On US Housing Market is the most read on the site

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Over the last few weeks there seem to have been masses of articles about bubbles, danger of, ludicrous prices, and criticising help to buy. It's not long ago that they were a rarity. Yesterday I saw some front page article in the Mail about the dangers of HTB - didn't buy or read it, but front pages in the tabloids can only be a good thing for general sentiment. I do sense that the tide is beginning to turn.

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I don't have a problem with UK house prices - knock yourself out, pay what you like. Paying cash then I don't care.

I do have a problem with UK housing debt.

The number of anecdotal 'I have no money' stories I'm hearing now are much bigger than 6 years ago.

I think a combination of tax credits and high mortgage debt has laid waste to 50% of UK households.

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Google "Former chancellors warn of housing bubble danger" to find the article.

Hilarious that Ed Balls' principled opposition to the scheme means he wants to reduce the maximum you can borrow with HTB2 from £600k to £400k. Basically it's okay to pump up house prices at the bottom end, just don't do it for the kind of houses doctors and barristers might want to buy.

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Google "Former chancellors warn of housing bubble danger" to find the article.

Hilarious that Ed Balls' principled opposition to the scheme means he wants to reduce the maximum you can borrow with HTB2 from £600k to £400k. Basically it's okay to pump up house prices at the bottom end, just don't do it for the kind of houses doctors and barristers might want to buy.

In many far-from-fashionable parts of London £400K IS not far off the bottom end. The other day I saw a minute 2 bed terrace in Tooting - and I do mean minute, 44.8 sq m, front door opening directly into the titchy living room etc, up for sale for £450K. And there are masses of very ordinary 2 bed flats going for around the same, though they will usually be more like 60-70 sq m.

Edited by Mrs Bear

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Google "Former chancellors warn of housing bubble danger" to find the article.

Hilarious that Ed Balls' principled opposition to the scheme means he wants to reduce the maximum you can borrow with HTB2 from £600k to £400k. Basically it's okay to pump up house prices at the bottom end, just don't do it for the kind of houses doctors and barristers might want to buy.

Just shows Labour will do all in their tiny little minds to keep the bubble inflated, Ed Balls is the poster child of why a private education doesnt always work, the stuttering freak.

Anyway i googled that sentence and it led me to the Tory Party website .... and most comments are about getting the bubble burst the people posting look like they wouldnt be out of place on this website.... see for yourself.

http://www.conservativehome.com/thetorydiary/2014/05/as-three-former-chancellors-warn-of-a-house-price-bubble-tories-must-show-they-know-how-to-spread-ownership.html

Edited by Corruption

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Over the last few weeks there seem to have been masses of articles about bubbles, danger of, ludicrous prices, and criticising help to buy. It's not long ago that they were a rarity. Yesterday I saw some front page article in the Mail about the dangers of HTB - didn't buy or read it, but front pages in the tabloids can only be a good thing for general sentiment. I do sense that the tide is beginning to turn.

I think the general population has started to figure out that eye-watering house prices are not in their interest. However, until they start getting out and voting on the issue politicians - of any party - will be quite happy to continue protecting the bubble as it's a major driver for credit creation in the economy. Not to mention there's a lot of debt that would turn very toxic should the property assets underpinning it fall in value.

The sudden mention of bubbles by the media (who have assiduously ignored it all the way through the '00s until now) is nothing more than an attempt to stabilise the pace of HPI and prevent it running away. They won't actually DO anything to stop it running away and when it does run away, they'll just underpin the whole thing with more HPI increasing nonsense schemes like HtB and FfL to fend off collapse.

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I think the general population has started to figure out that eye-watering house prices are not in their interest. However, until they start getting out and voting on the issue politicians - of any party - will be quite happy to continue protecting the bubble as it's a major driver for credit creation in the economy. Not to mention there's a lot of debt that would turn very toxic should the property assets underpinning it fall in value.

The sudden mention of bubbles by the media (who have assiduously ignored it all the way through the '00s until now) is nothing more than an attempt to stabilise the pace of HPI and prevent it running away. They won't actually DO anything to stop it running away and when it does run away, they'll just underpin the whole thing with more HPI increasing nonsense schemes like HtB and FfL to fend off collapse.

This is what it comes down to, the BOE is all fart and no shyt when it comes to correcting the bubble.

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Just shows Labour will do all in their tiny little minds to keep the bubble inflated, Ed Balls is the poster child of why a private education doesnt always work, the stuttering freak.

Anyway i googled that sentence and it led me to the Tory Party website .... and most comments are about getting the bubble burst the people posting look like they wouldnt be out of place on this website.... see for yourself.

http://www.conservativehome.com/thetorydiary/2014/05/as-three-former-chancellors-warn-of-a-house-price-bubble-tories-must-show-they-know-how-to-spread-ownership.html

Like this one, which pretty much says it all.

The article is missing a trick by focussing just on the latest edition of Help to Buy - Help to Buy 2 specifically.

I talked to my wife who has been working in the London property market for many years now, currently as a Mortgage Broker. In her opinion, there are many reasons for the rampant house price inflation in the London property market -

1. The long term artificially low interest rates.

2. Taxpayer backed house/flat purchase schemes such as - NewBuy, FirstBuy, H2B1 (for new-builds), H2B2, Share2Buy, etc.

3. The relative ease with which foreign buyers can buy property in London as an 'investment'.

4. The extreme lack of new housing coupled with the non-stop flow of people in to London, both from overseas and other parts of Britain.

5. Lending policies and a tax regime which makes BTL mortgages easier to obtain and service than those for a house to live in.

The press is setting up an easy target for the government by continually focussing on H2B2. This sets the stage for Osborne to announce an end to it in the upcoming months without actually having any impact on the price rise.

Only when the government ends any taxpayer support for schemes to purchase new-build flats, couple with an increase in interest rates will there be a cooling in the market. But that is not going to happen, for the simple reason that you do not bite the hand that feeds you.

Under Cameron, the Tory party solicits hundreds of thousands of pounds from property developers as donations to the party. These donors include most of the major builders who build all those pokey matchbox sized flats with a view of the M25 which sell for a ridiculous amount of money.

Why on earth would a profit-making private sector firm give tons of money to a political party unless it was ensured of a healthy return on their 'investment'?

Cameron owes it to his donors to keep their business roaring by

- using taxpayer money for schemes such as FirstBuy, NewBuy, Help2Buy, Help2Buy2 so that people who can't save enough for a deposit can buy one of these 'homes'.

- providing cheap finance to banks so they can keep the mortgage supply high

- keeping interest rates low so that old borrowers can keep their head above water and new borrowers perceive a mortgage as affordable.

For First Time Buyers saving up towards buying a house in London, the turbo-charged price rise in the near past (and the panic that it has triggered among first time buyers) means that the prospect of ownership looks as bleak as ever.

In 2014/15, I won't be making the mistake that I made in 2010. UKIP might disappoint later, but at least I don't know that yet.

http://www.telegraph.co.uk/earth/hands-off-our-la...

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Help To Banks

Help To Builders

Help To Bump up prices

Help To Bu**er you financially

Help to Buy is anything but.

Yet they still come for their Barratt slave boxes....school teachers naturally

http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/10733225/Help-to-Buy-case-study-the-teachers-who-saved-for-years-to-put-down-5pc-deposit.html

edit...took them ''years'' to save the 9k deposit.

Edited by crashmonitor

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The Force is strong in these ones........

we were just sick of renting and putting between £500 and £600 in someone else's back pocket every month

:rolleyes: :rolleyes: :rolleyes:

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The Force is strong in these ones........

:rolleyes: :rolleyes: :rolleyes:

Now they'd happily pay several hunderd's K for a crappy house and put several 10's of K in bankers pockets.

Oh, how I laughed.

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The Force is strong in these ones........

:rolleyes: :rolleyes: :rolleyes:

Owe Me One Rentobe

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Anyway i googled that sentence and it led me to the Tory Party website .... and most comments are about getting the bubble burst the people posting look like they wouldnt be out of place on this website.... see for yourself.

http://www.conservativehome.com/thetorydiary/2014/05/as-three-former-chancellors-warn-of-a-house-price-bubble-tories-must-show-they-know-how-to-spread-ownership.html

I see what you mean - the full range of HPC opinions in the main comments (didn't read replies) and not a single HPI bull.

ps. I read a bit more on that site - refreshing to see moderate people with balanced views rejecting the DM viciousness.

Edited by okaycuckoo

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Mortgage Solutions | 12 May 2014 | 10:10
Professional Adviser
Prominent economists have added to calls for the government to pull back from the mortgage guarantee element of its Help to Buy initiative, arguing it is no longer needed.
Former Monetary Policy Committee (MPC) member Kate Barker and Citi UK economist Michael Saunders, who previously supported the scheme, say an improving economy and stable house price growth have rendered it unnecessary, according to a report in the Financial Times.

What Barker says now.. although I'm not sure how long she's been on Board at TW http://www.mortgagesolutions.co.uk/mortgage-solutions/news/2344127/economists-heap-pressure-on-osborne-over-help-to-buy

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