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George Osborne Told To Rein In Help To Buy By European Commission

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European Commission calls on Chancellor to 'deploy appropriate measures' against rising house prices

George Osborne’s flagship Help to Buy scheme must be reined in and council tax should be increased to stop house prices getting out of control, the European Commission has said.
In a dramatic intervention in UK Government policy, the commission called on the Chancellor to “deploy appropriate measures” because of rising house prices, particularly in London.
Mr Osborne should adjust the Help to Buy mortgage guarantee scheme and increase council tax on expensive properties, the commission said.
The suggestion that Help to Buy is fuelling a potentially damaging property boom will anger ministers and comes as David Cameron prepares to reform Britain’s relationship with the European Union before holding an in-out referendum in 2017.
The proposals were outlines in a document designed to tell Europe’s five biggest economies how they can “make growth stronger, more sustainable and more inclusive”.
“The Commission recommends that the UK deploy appropriate measures to respond to the rapid increases in property prices, notably in London, for example by adjusting the Help to Buy 2 scheme and mitigating risks related to high mortgage indebtedness,” the report said.
The Coalition must take “action” to increase housing supply, the report said.
The report warns that rising property prices had not been matched by increases in council tax bands. It said that the owners some of Britain's most expensive properties are now paying relatively less council tax than the owners of cheaper properties.
“At the moment, increasing property values are not translated into higher property taxes as the property value roll has not been updated since 1991 and taxes on higher value property are lower than on lower value property in relative terms due to the regressivity of the current rates and bands within the council tax system,” it said.

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Top story yesterday (Monday, June 2, 2014) Daily Telegraph - Business. I'll type out a few relevant sentences, paper in front of me.

Help to Buy will spread housing bubble, experts warn.

A housing market bubble could envelop Britain if the second stage of the Government's Help to Buy scheme is as successful as the Treasury hopes. George Osborne has ring-fenced the budget to support as much as £130bn of high-loan-to-value mortgages through £12bn of guarantees by the time the programme finishes in 2016, although early data has indicated that it will be less popular than the Chancellor has banked on.

... In the first six months of the scheme, which started in October, just over £1bn of mortgages were secured through Help to Buy phase two, involving a guarantee of just £153m, and with less than three years remaining to reach the £12bn target.

... These figures coincide with a new report from property agents Savills, which has blamed Help to Buy for inflating land values in the North West. In turn, this will make it more expensive for house-builders to acquire sites and deliver homes. The report found that strong developer demand has driven land values up to peak levels. Greenfield land values grew and average of 7.5% across the UK in the year to the end of March, with urban values up 6.4%. In key commuter locations - Crawley, Leamington Spa, Oxford, Sevenoaks and St Albans - greenfield values are now above their former 2007 highs.

I guess many developers already acquired bulk of big land plays way back in the day, before 'recovery'. Self-build is plummeting from its already low-levels, as I understand it, given the "recovery" and excellent more expensive land plots.

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Don't the EU know that false land scarcity and stitching up the populace with ever more expensive houses has been deliberate UK economic policy for almost a thousand years?

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Paul Ross and Penny Smith talking about it all this hour

Edited by Killer Bunny

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Hallelujah! Someone's finally called Osborne out over his insane ponzi scheme.

UKDebt.jpg

Yep.

The claim to 'being the fastest growingWestern economy' falls flat on itself when you realise we are running a ~7% deficit to achieve ~2% growth.

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Saved by the EU, if we had joined the Euro we wouldn't be seeing a more balanced economy without the government printing money and much lower house prices!

Feel free to flame me, but it's the truth.

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They'll never cancel it now - to do so would be to 'give in' to those 'interfering socialists' in Europe. The public has been told that Europe is bad for a long time now.

Sometimes I think they deliberately get the hate figure of the moment to support policies they want to discredit.

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Saved by the EU, if we had joined the Euro we wouldn't be seeing a more balanced economy without the government printing money and much lower house prices!

Feel free to flame me, but it's the truth.

Words, just words...The IMF made noises too. And millions of people are posting about the scheme.

Nobody listens.

EU will include the rising mortgage costs in some other departments stats and insist we raise taxes too....oh wait!

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Hallelujah! Someone's finally called Osborne out over his insane ponzi scheme.

UKDebt.jpg

Austerity doesn't work.

Bleedin' obvious before he wasted 3 yrs growth.

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Saved by the EU, if we had joined the Euro we wouldn't be seeing a more balanced economy without the government printing money and much lower house prices!

Feel free to flame me, but it's the truth.

I think our economy has problems but it is better than Spain, which is probably what we would be like if we had joined.

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Austerity doesn't work.

Bleedin' obvious before he wasted 3 yrs growth.

You mean their implementation of austerity doesnt work.

Of course, spending less solves the overspending problem.

The issue is that there is a desire to keep the unemployed still in a public sector job.

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http://

www.bbc.co.uk/news/uk-politics-27675294

Lib Dem Business Secretary Vince Cable said the UK had a "problem" with house price inflation but "we don't need the EU to tell us what's going on here".

Most everyone knows "what's going on here" but the eu was making suggestions on dealing with it.

It's not so long ago that Cable was saying that Help to Buy risked a house price bubble and that wouldn't be good but when the house price bubble he predicted arrived and some advice is offered to deal with it then he's not interested.

What's Cable's solution to what's going on here/the mega bubble? Keep quiet and hope there's some votes in the mega bubble and hope some of them will go in the LibDem direction?

Edited by billybong

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Most everyone knows "what's going on here" but the eu was making suggestions on dealing with it.

It's not so long ago that Cable was saying that Help to Buy risked a house price bubble and that wouldn't be good but when the house price bubble he predicted arrived and some advice is offered to deal with it then he's not interested.

What's Cable's solution to what's going on here/the mega bubble? Keep quiet and hope there's some votes in the mega bubble and hope some of them will go in the LibDem direction?

Get voited out and f**k over labour who will then never will an election for decades.

A great political plan....not great for the country tho !!!!

This is going to really end badly

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Most everyone knows "what's going on here" but the eu was making suggestions on dealing with it.

Over on the lizard forum there's a thread where many of the contributors are wholly convinced that the worldwide plan is to draw as many people in as possible before pulling the rug on them just to make them suffer. In one of my more stoned moments I started to think there was something in it, but then they started on how to drop out and live an alternative lifestyle, which seemed to revolve mostly around moving to Bulgaria and getting into BTL there <_<

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Get voited out and f**k over labour who will then never will an election for decades.

A great political plan....not great for the country tho !!!!

This is going to really end badly

But Labour f**ked over the Tories first. Amazingly they kept the plates spinning. I very much doubt Labour can keep them spinning.

Begging bowl to the IMF methinks.

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Over on the lizard forum there's a thread where many of the contributors are wholly convinced that the worldwide plan is to draw as many people in as possible before pulling the rug on them just to make them suffer. In one of my more stoned moments I started to think there was something in it, but then they started on how to drop out and live an alternative lifestyle, which seemed to revolve mostly around moving to Bulgaria and getting into BTL there <_<

:)

I was really referring to the Help to Buy/UK house price/economy stats/electioneering plan rather than the worldwide plan ;)

Edited by billybong

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:)

I was really referring to the Help to Buy/UK house price/economy stats/electioneering plan rather than the worldwide plan ;)

I know, but they made me laugh and it seemed a decent place to post it :)

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