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fru-gal

Choke buy-to-let to help deliver home ownership for young voters

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Not sure if I can post a link but copy and paste the title into google and you should be able to read it (does anyone know if posting FT links is ok or not?).

Edit to put in twitter link to article, thanks Bland.

 

Edited by fru-gal

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By a former adviser to T.May, so why didn't he advise her. Or perhaps he did and she ignored him which is why he is a former adviser. Just shows however that TPTB perfectly well understand what we understand they just prefer not to do anything about it, even though they could.

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I'm utterly flabbergasted that the rentiers have been mollycoddled and the renters have been boiled alive financially. The protection and support for those up to their eyeballs in mortgages is astounding. It's so unfair it's off the scale.

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12 minutes ago, Si1 said:

I'm utterly flabbergasted that the rentiers have been mollycoddled and the renters have been boiled alive financially. The protection and support for those up to their eyeballs in mortgages is astounding. It's so unfair it's off the scale.

Absolutely true.  Yesterday I saw a news comment that the public sector pay freeze was really irrelevant  because everyone had the benefit of low interest rates and cheap mortgages to compensate for inflation and low pay.  This is shockingly an honest opinion of the general populace. It is what they have been told to believe. The truth is that the rich have been bailed out by the poor.  Public services have been trashed to raise funds to rescue those who gambled trillions on property futures. Low pay, lost public services,  high inflation and house price escalation are the consequences of government's determination to rescue the rich from the possibility of even a slight diminution of their wealth. I sense that some people are starting to realise this. Not many though. 

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7 hours ago, Dražen Petrović said:

It is a good read. But I am not sure that the governing elite of the country will understand this frustration.  

I am sure they do.....hoping they will grow out of it.;)

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3 minutes ago, ingermany said:

Absolutely true.  Yesterday I saw a news comment that the public sector pay freeze was really irrelevant  because everyone had the benefit of low interest rates and cheap mortgages to compensate for inflation and low pay.  This is shockingly an honest opinion of the general populace. It is what they have been told to believe. The truth is that the rich have been bailed out by the poor.  Public services have been trashed to raise funds to rescue those who gambled trillions on property futures. Low pay, lost public services,  high inflation and house price escalation are the consequences of government's determination to rescue the rich from the possibility of even a slight diminution of their wealth. I sense that some people are starting to realise this. Not many though. 

And therein also lies the answer to our low productivity puzzle.

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48 minutes ago, Si1 said:

And therein also lies the answer to our low productivity puzzle.

But the nation's top economists including those at the BoE still think it's a puzzle. Even after 10 years. Is it possible they really don't see the link? 

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1 minute ago, ingermany said:

But the nation's top economists including those at the BoE still think it's a puzzle. Even after 10 years. Is it possible they really don't see the link? 

No. They just place their short term career interests first. 

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Miras for 'young people'. 

Whats a young person? After the age limits on lifetime isas I get the feeling that the govt sees 40+ as too old to help. Then again you dont even get full housing benfit until the age of 35... 

Miras at 0.5% is insane. It made sense at 14%. Like QE this is another policy that will be used to much too soon and by the time its genuinely needed it will have been rendered impotent.

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Actually maybe they don't get it. I'm thinking Hammond, Osborne, Cameron, Carney, Haldane, Hogg. Clueless. Nadine Dories, Tory MP who was brought up in a council estate, we hugely critical of Cameron/Osborne as being clueless as to how the plebs get by.

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10 hours ago, fru-gal said:

Not sure if I can post a link but copy and paste the title into google and you should be able to read it (does anyone know if posting FT links is ok or not?).

 

As best I understand matters we are fine if we post links to FT articles. If one googles an article title then usually the link in the google search results opens the article. A link directly to the FT page usually results disappointment for non-subscribers.

We now also have the option of embedding a tweet from the FT or one of its journos in an HPC post and that tweet usually provides the article title (or clicking on the link will take you to a 'get lost non-subscriber' page which includes the title). 

I believe that strictly speaking HPC posters should not be cutting and pasting big chunks of text from any newspaper into HPC posts, however I believe that the FT are particularly assiduous in making sure that it doesn't happen with their stuff. I think under 'fair use' terms we are OK to quote the a sentence or part of a sentence in a discussion of the article.

For example I think that O'Brien's suggestion that the alternative to his solution is "populist politicians offering fake solutions" is a bit rich coming as it does from the party that sold off so much social housing and put an end to the building of new social hosing. (This chap and his pals basically wrote the book on populist politicians offering fake solutions in the context of housing and home-ownership.) But there's more. HIs pals in the Conservative party introduced the AST via the 1988 Housing Act and then just before being booted out of office in 1997 they made is the default form of tenancy. Their statesman-like wisdom has made the UK housing market a rentiers' paradise. If 1988-2017 is what you get without "fake solutions" I think it's time with gave the fake solutions a run around the track.

Also I'm totally not cool with this Trumpian use of "fake" entering our political discourse. This O'Brien chap appears to be an arsehat.

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4 hours ago, regprentice said:

Miras at 0.5% is insane. It made sense at 14%. Like QE this is another policy that will be used to much too soon and by the time its genuinely needed it will have been rendered impotent.

MIRAS, buy-to-let, average mortgage terms pushing past thirty years, interest-only lending - they are all different facets of the same thing. Financialisation of housing.

If you lengthen a mortgage term you increase both the amount of interest that will be paid in total over the term of the mortgage and, more importantly in this context, the percentage of the cash paid to the bank in the first year that is interest and not capital repayment if the mortgage is a repayment mortgage.

If you are fix the interest rate and the principal and compare 25, 30 and 35 year terms then lengthening the term form 25 year to 35 years has almost no effect on the amount of interest paid in the first year of the term but it moves the interest component from about 60% of  what you paid to about 75% of what you paid (on a 4% interest rate).

Lengthening mortgage terms and MIRAS are means by which we can live with these crazy prices. There is a better option.

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Neil O'Brien MP's policy proposals from that article:

- No further cuts to landlord mortgage interest relief (i.e. don't take S24 to its natural conclusion of getting rid of tax relief at the basic rate too)

- Limit or end new buy to let lending

- Increase taxes (which ones? he doesn't say) on properties being let out for the first time

- Cut stamp duty for FTBs

- Targeted MIRAS for young, lower-income people

- Cut the cost of 95% LTV mortgages for FTBs by deregulating (?) or extending guarantees

 

What a mess! Loads of bureaucracy required to define and enforce "properties being let out for the first time", "FTBs", and "young, lower-income people". Complicated grandfathering clauses to distinguish between existing BTL lending and "new" BTL lending or properties already being let out and "new" properties being let out.

I'm not sure what they teach during Oxford PPE but it doesn't seem to be good policymaking.

The funny thing is, Tory central office will have signed off on this. If this is the fresh bright thinking that is going to bring the young back to the Conservatives, they are going to be in LibDem-esque irrelevance by the time we hit the 2030s.

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7 hours ago, Bland Unsight said:

As best I understand matters we are fine if we post links to FT articles. If one googles an article title then usually the link in the google search results opens the article. A link directly to the FT page usually results disappointment for non-subscribers.

We now also have the option of embedding a tweet from the FT or one of its journos in an HPC post and that tweet usually provides the article title (or clicking on the link will take you to a 'get lost non-subscriber' page which includes the title). 

I believe that strictly speaking HPC posters should not be cutting and pasting big chunks of text from any newspaper into HPC posts, however I believe that the FT are particularly assiduous in making sure that it doesn't happen with their stuff. I think under 'fair use' terms we are OK to quote the a sentence or part of a sentence in a discussion of the article.

For example I think that O'Brien's suggestion that the alternative to his solution is "populist politicians offering fake solutions" is a bit rich coming as it does from the party that sold off so much social housing and put an end to the building of new social hosing. (This chap and his pals basically wrote the book on populist politicians offering fake solutions in the context of housing and home-ownership.) But there's more. HIs pals in the Conservative party introduced the AST via the 1988 Housing Act and then just before being booted out of office in 1997 they made is the default form of tenancy. Their statesman-like wisdom has made the UK housing market a rentiers' paradise. If 1988-2017 is what you get without "fake solutions" I think it's time with gave the fake solutions a run around the track.

Also I'm totally not cool with this Trumpian use of "fake" entering our political discourse. This O'Brien chap appears to be an arsehat.

I think I see a heavily upvoted Bland comment on there ;) .

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28 minutes ago, fru-gal said:

I think I see a heavily upvoted Bland comment on there ;) .

Sadly that's not me. (If you had in mind the /B comment, that individual posts a lot of sense and gives the BTL crowd a good beasting.)

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Just now, Bland Unsight said:

Sadly that's not me. (If you had in mind the /B comment, that individual posts a lot of sense and gives the BTL crowd a good beasting.)

Yes, that's the one. 

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more 'help' ?- no thanks, just let the market function rather than continue to distort it.  His audience is not those he claims to want to help...its for those with property wealth that feel vaguely uneasy about the vast contrast between their wealth and the dismal prospects for their children.  They want to believe the government is doing something to 'help' these youngsters - all is well.

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  • 293 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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