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Eddie_George

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David Cameron is so concerned home ownership is falling that on Monday he’ll bring forward a plan for discounted homes for young, first-time buyers.
The scheme, which had originally been planned for the Tory manifesto, will see first-time buyers under 40 offered a 20 per cent discount on 100,000 new homes. The Government hopes this scheme will be up and running before the Election.
Senior Tories believe that this scheme, combined with Help to Buy and the new Stamp Duty changes, will show that they are on the side of those who want to get on in life.
They won’t forget to mention that this is only possible because they have pulled the public finances back from the chaos of 2010.
Why the rush? Because Cameron – like Margaret Thatcher and Harold Macmillan before him – knows that when Tories help people own their own homes, they win elections.

http://www.dailymail.co.uk/news/article-2872991/JAMES-FORSYTH-Yanks-coming-late-save-Ed.html

It's the Mail so could be a completely fabricated story, but in this case I doubt it.

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First time buyers have been priced out for far too long, schemes like this won't make a difference at the peak of a bubble. especially in London.

houses will still be marked up to start with. the crisis and props have given anyone sensible plenty of time to prepare their war chests, allowed sensible people who were caught out to unwind positions. to be ready for the crash.

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Gifted deposits had to happen and her it is only difference between this and what happened in Australia is this will only be for new houses as apposed to all off the market in Australia but it will have the same effect HPI of the same % as the gifted deposit in that part of the market.....great if you are one of the builders shit for everyone else

Edit

This Is going to be a disaster there is already a generational dived opening up this will just accelerate it

Edited by long time lurking

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All those still in negative equity in their starter homes outside of London suddenly have less chance of shifting.

new builds all seem about 40% overpriced to start with, tiny poorly made shit-boxes. of course people will take the offer up, determined to borrow to the hilt, but those rare beasts (stupid with money!) will suddenly not be there to support chains.

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As longtimelurking said, it probably won't work like that. If the marginal buyer becomes a state subsidised FTB that's what sets prices. It's seriously corrupt, because there's no longer any intellectual argument that this works as stated - Canadian, Australian experience. It really is a simple as relying on mass stupidity to keep the gravy train rolling (or the credit growth train rolling for those who think this is a necessary wrong to keep the economy going, which I don't).

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Wasn't something like that announced a couple of months or so ago before the recent by-elections. It didn't work that time either.

The difference now seems to be that they're saying they're trying to introduce it before the general election maybe in another last ditch attempt to support and maybe even to boost house prices again before then.

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Government is worried entire generations are not towing the line of indebting themselves for the rest of their lives. It's a ponzi scheme that looks to be floundering, and they know they'll be out of luck when so many people don't have the millstone of a mortgage keeping them compliant.

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Wasn't something like that announced a couple of months or so ago before the recent by-elections. It didn't work that time either.

The difference now seems to be that they're saying they're trying to introduce it before the general election maybe in another last ditch attempt to support and maybe even to boost house prices again before then.

This surely must be a last ditch desperate lunge for the line. They must be shitting themselves.

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Axelrod was adamant that Labour cannot cede economic competence to the Tories. One senior figure tells me that he told the Labour leadership that it has ‘to take them square on’. He argued that they shouldn’t worry about where public opinion is now, but about where they need to get it to.

It's democracy. It's marketing. Listening to the electorate is so old hat - it's just something to pretend to do.
After the elections it doesn't matter as all that matters then is which lobbyist has the deepest and fattest pockets.

In a sign of how eager the Tories are to keep the focus on the economy, both Cameron and Osborne will give speeches on it on Monday. Their message will be that Labour would borrow and tax more.

======================================================================

What?! Even more than the Conservatives :o

Edited by billybong

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Wasn't something like that announced a couple of months or so ago before the recent by-elections. It didn't work that time either.

The difference now seems to be that they're saying they're trying to introduce it before the general election maybe in another last ditch attempt to support and maybe even to boost house prices again before then.

Yep it was a future plan: http://www.independent.co.uk/news/uk/politics/david-cameron-sets-out-discount-starter-home-plan-for-first-time-buyers-9759277.html Now, apparently, it's current policy.

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This surely must be a last ditch desperate lunge for the line. They must be shitting themselves.

No there are couple more to come look at what Australia has done ,,but that is now failing even with a far stronger economic environment ,which has admittedly turned down recently and house prices have done the same

The foreign investor have left the table just like they have left London

Shitting themselves`s yes but last ditch i would say no...there will be a rabbit or two left in the hat, one will be extending it to all of the market just like HTB1 vs HTB2 then remove the age limit,whether they will be that stupid/desperate is any one`s guess

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It seems there are a lot of home owners who are mortgage free (2 out of 5 homes?), and also a lot of renters who either simply can't buy, or can buy, but who are extremely wary of buying right at the top of the market, and/or simply think "I am looking at a house that's on sale for £200,000, yet was sold in 1997 for £65,000 - I refuse to be ripped off no matter what". In other words, there's an ever-decreasing number of borrowers. I don't actually think there's a housing shortage in large areas of the country - it's just that there's a lack of activity in the housing market because of high prices. Also, isn't it illegal to setup a policy that targets a particular age group?

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As longtimelurking said, it probably won't work like that. If the marginal buyer becomes a state subsidised FTB that's what sets prices. It's seriously corrupt, because there's no longer any intellectual argument that this works as stated - Canadian, Australian experience. It really is a simple as relying on mass stupidity to keep the gravy train rolling (or the credit growth train rolling for those who think this is a necessary wrong to keep the economy going, which I don't).

The bubble was created by a period of mass credit availability worldwide, it was a one off event that won`t repeat in our lifetimes, nearly free credit for the masses as a response to 9/11, Dot.com burst etc. The UK government piddling around before an election is like tying a rope to the Titanic and trying to swim to shore.

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It seems there are a lot of home owners who are mortgage free (2 out of 5 homes?), and also a lot of renters who either simply can't buy, or can buy, but who are extremely wary of buying right at the top of the market, and/or simply think "I am looking at a house that's on sale for £200,000, yet was sold in 1997 for £65,000 - I refuse to be ripped off no matter what". In other words, there's an ever-decreasing number of borrowers. I don't actually think there's a housing shortage in large areas of the country - it's just that there's a lack of activity in the housing market because of high prices. Also, isn't it illegal to setup a policy that targets a particular age group?

As it's blatantly an election ploy if it's illegal it's unlikely that could be officially proven until after the election (emphasis on officially). They might be counting on that. They might even have taken advice on the matter but decided to ignore it.

It might also be against some eu law but likely that would also take time to be asserted so the same applies.

It's just possible that a few other populist bits and pieces could be tried on by the Conservative and LibDem coalition as blatant electioneering "promised" to be timed for before the election and that might turn out to be illegal - even if they're not implemented - and of course then they'll be reneged on afterwards at any rate.

Edited by billybong

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It seems there are a lot of home owners who are mortgage free (2 out of 5 homes?), and also a lot of renters who either simply can't buy, or can buy, but who are extremely wary of buying right at the top of the market, and/or simply think "I am looking at a house that's on sale for £200,000, yet was sold in 1997 for £65,000 - I refuse to be ripped off no matter what". In other words, there's an ever-decreasing number of borrowers. I don't actually think there's a housing shortage in large areas of the country - it's just that there's a lack of activity in the housing market because of high prices. Also, isn't it illegal to setup a policy that targets a particular age group?

I think it`s called ageism then they will have to roll it out to all ages under "duress" (just makes it look less desperate)

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It seems there are a lot of home owners who are mortgage free (2 out of 5 homes?), and also a lot of renters who either simply can't buy, or can buy, but who are extremely wary of buying right at the top of the market, and/or simply think "I am looking at a house that's on sale for £200,000, yet was sold in 1997 for £65,000 - I refuse to be ripped off no matter what". In other words, there's an ever-decreasing number of borrowers. I don't actually think there's a housing shortage in large areas of the country - it's just that there's a lack of activity in the housing market because of high prices. Also, isn't it illegal to setup a policy that targets a particular age group?

It seems there are a lot of home owners who are mortgage free (2 out of 5 homes?), and also a lot of renters who either simply can't buy, or can buy, but who are extremely wary of buying right at the top of the market, and/or simply think "I am looking at a house that's on sale for £200,000, yet was sold in 1997 for £65,000 - I refuse to be ripped off no matter what". In other words, there's an ever-decreasing number of borrowers. I don't actually think there's a housing shortage in large areas of the country - it's just that there's a lack of activity in the housing market because of high prices. Also, isn't it illegal to setup a policy that targets a particular age group?

I think this election is going to be about the EU,immigration and feelings about the too fast changes to what the UK once was. UKIP will come to the fore. The Cons would like it to be about housing, and it would be great for them if some daft little scheme like this could get them elected, but things have moved on I`m afraid. Many people are already in the Ponzi - this won`t help them, Many young are warm and snug rent free at home - they don`t care about this, Many rent cheaply and won`t buy until there is value in the market - they will laugh at this, Many won`t want the Shitboxes it applies to - they will ignore this nonsense. There will be a tiny group of mentalists (no doubt paraded for the cameras) who will be too thick to know any better and will sign up, they won`t help the Tories though IMO.

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The bubble was created by a period of mass credit availability worldwide, it was a one off event that won`t repeat in our lifetimes, nearly free credit for the masses as a response to 9/11, Dot.com burst etc. The UK government piddling around before an election is like tying a rope to the Titanic and trying to swim to shore.

My view is based on experience of a similar process in Australia. It hasn't ended yet and I think we already had this conversation but the credit isn't free it could be far more expensive long term, doubling the mass stupidity. Maybe you're right and I hope you are, but it is what it is. I don't like it and I'm not in favour of the continued selling of our economic soul to rentierism. If you're right then it took another one off event, a global credit crunch, to dampen it. Despite that, even on this forum many people still think it's primarily about immigration, or not enough houses. So at this point I don't hold out much hope that the people or policy change will effect much rapid practical and positive change.

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I think this election is going to be about the EU,immigration and feelings about the too fast changes to what the UK once was. UKIP will come to the fore. The Cons would like it to be about housing, and it would be great for them if some daft little scheme like this could get them elected, but things have moved on I`m afraid. Many people are already in the Ponzi - this won`t help them, Many young are warm and snug rent free at home - they don`t care about this, Many rent cheaply and won`t buy until there is value in the market - they will laugh at this, Many won`t want the Shitboxes it applies to - they will ignore this nonsense. There will be a tiny group of mentalists (no doubt paraded for the cameras) who will be too thick to know any better and will sign up, they won`t help the Tories though IMO.

+1 this wont win any votes, it's just not attractive to the majority. If you were one of the fools to take this scheme up before the election surely for the rest of your life you will be pissed off with the negative equity trap, and never want to vote Tory again? feeling 'tricked' into it?

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combined with Help to Buy

So thats a total 40% government boost to prices then. This is the only way they can keep house prices rising, and they know it. Wages cannot and will not go up in a globalized labour market. Interest rates cannot be reduced. Thus the only way to force prices up is to literally shove more money into the housing market.

Your 'free market' tories doing what they do best. Being utter, utter scumbags.

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Wasn't this announced a few months ago.

Utterly depressing, if it works or not is a mute point really, their intent going forward will be just more and more props but I knew that already. This government has pulled every rabbit out the hat regarding props for the housing market FLS, HTB 1 & 2,RTB discount increase, pension release, and this, have I missed any?

Just staggering when you think about it.

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What is the electoral strategy when we all effectively subsidise a relatively few better off people to buy over priced houses.

Well, given it will force prices up, theyre the kind of people that with a couple of months saving would be able to buy without the policy

Nope, its another help to sell policy. Its there for the homebuilders (and boomers wanting their house to be a pension)

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Isn't the discount just being funded by letting developers off paying section 106 and community infrastructure levies - the taxes local councils impose on developers to fund building the new schools and GP surgeries, the bus services, playing fields/parks and roads you need when you get new developments. So its local councils picking up the tab - not the Government.

So I hope these FTBs enjoy their discounts - just don't expect a local school place for your kids, a bus service or a GP nearby.

Edited by MARTINX9

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Wonder how many different ways of doing the same thing can be thought of. Must be some parallels with medical science where the practitioner is convinced, despite repeated failure, that the drug is good but the delivery method is the problem. Practitioner just happens to have massive vested interest in the preferred scenario.

Mainlining credit is bad for a person's wealth but seems Tories don't mind trying to put a few more chimps in the financial morgue regardless.

Like Zammo, just say no.

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