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keeprenting

Help to "Buy" (Sell) to be pumped up

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1 hour ago, crouch said:

The second steppers argument may be quite important.

Those who have made that second step know just how much it can cost (I did in the 1980s and backed off) and I wonder whether the euthanasia of the FTB (now forced to rent) together with elevated prices generally  hasn't killed off the possibility of second stepping almost completely.

Agree 100%. Paid 82k for my 3 bed ex council semi 10 years ago (open market not a rtb). Now a house in my area with one more bedroom and a garage will cost another £250k. And my wages have barely risen in those ten years, highest annual payrise ive had in that time was 2%.

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46 minutes ago, Democorruptcy said:

It's an easy enough mistake to make, given the overlap of staff between the FCA and BoE.

FCA Chief Exec Andrew Bailey https://www.fca.org.uk/about/fca-board/andrew-bailey

Plus others like

https://www.fca.org.uk/about/fca-board/sam-woods

https://www.fca.org.uk/about/fca-board/bradley-fried

An elaborate game of musical chairs conducted between the Bank and the Treasury.

Musical-Chairs.jpg

 

Quote

The former chairman of parliament’s Treasury Select Committee is being urged by leading figures in the financial services sector to apply for the top job at the City regulator.

Sky News has learnt that a number of directors of banks, insurers and asset managers are supporting a potential application by Andrew Tyrie to replace John Griffith-Jones as chairman of the Financial Conduct Authority (FCA).

Westminster and City insiders believe that Mr Tyrie is interested in the job, although he did not respond on Monday to requests for comment about whether he had applied for the job.

A source close to the Treasury, which is responsible for appointing FCA board members, said there had been a dearth of applicants for the role.

Mr Griffith-Jones is stepping down at the end of March after serving a five-year term punctuated by controversy over the regulator's handling of a string of industry probes.

https://uk.news.yahoo.com/tyrie-urged-put-name-forward-175700669.html

 

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2 hours ago, keeprenting said:

I think it's just stupidity TBH.

As a Tory, why not let the free market operate and prices fall? You can blame it on Brexit, so no boomer backlash, and the boomers are hardly going to vote Jezza in.

Falling house prices, the young can buy homes and start voting Tory. What's not to like? Maybe the fact that their backhanders from property developers will dry up?

They seem to of lost their minds.We have a Labour party that are offering to collapse the economy while stealing peoples assets (shares) yet they can only come up with this.The Tories need to remove May and Hammond within months.They simply cannot carry on with bonkers policy like HTB.They seem to of forgot in the first two years of government you do the nasty stuff,then do the good stuff the last three years.May really does come across as a robot.It will be interesting to watch Boris give his speach and the hall reaction.I cant see any way May takes the Tories into the next election.She is clueless.

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7 minutes ago, durhamborn said:

They seem to of lost their minds.We have a Labour party that are offering to collapse the economy while stealing peoples assets (shares) yet they can only come up with this.The Tories need to remove May and Hammond within months.They simply cannot carry on with bonkers policy like HTB.They seem to of forgot in the first two years of government you do the nasty stuff,then do the good stuff the last three years.May really does come across as a robot.It will be interesting to watch Boris give his speach and the hall reaction.I cant see any way May takes the Tories into the next election.She is clueless.

The UK economy is going to collapse anyway, whichever party is in power. The ratio of private sector debt/GDP dictates that it must. Continued govt borrowing on an heroic scale (i.e. hundreds of billions) is the only thing that might potentially limit the duration of that depression to mere years rather than decades. In that respect, at least, there's a degree of candour to the Labour position which is absent from the other side.

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22 minutes ago, durhamborn said:

They seem to of lost their minds.We have a Labour party that are offering to collapse the economy while stealing peoples assets (shares) yet they can only come up with this.The Tories need to remove May and Hammond within months.They simply cannot carry on with bonkers policy like HTB.They seem to of forgot in the first two years of government you do the nasty stuff,then do the good stuff the last three years.May really does come across as a robot.It will be interesting to watch Boris give his speach and the hall reaction.I cant see any way May takes the Tories into the next election.She is clueless.

Its very unusual, but I'd say its related to inflows of money as enticements to continue spending on infrastructure/ asset investments. I'd say they have fallen out of sync with enticing the public to borrow more credit :ph34r:  

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3 hours ago, Beary McBearface said:

This. In 2014 the National Audit Office produced a report on Help to Buy. The equity loans had been announced in March 2013 and open to the public on 1 April 2013. (London Help to Buy equity loans at 40% of the sale price were not announced until February 2016.) 

At the time of the NAO report (March 2014) a geographical concentration of Help to Buy loans in the North and the Midlands was already apparent.

59d0d7d9516cb_NAOHTBequityloansgeodist.jpg.ee7d4d544daeb4023a55359bc70faccf.jpg

Source

Here's what house prices were doing in the North East throughout that time:

59d0d89ddb1b0_LandRegpricesnortheastJan2012toDec2015.thumb.jpg.199f9ebe624d52ad9ccc49704d03bab9.jpg

I'm not aware of any convincing evidence that Help to Buy has had any effect on house prices. My understanding of the HTB equity loans has always been that they are response to the way in which the big developers cut the roll out of new supply when prices soften. Their profits are driven by the amount they paid for the land. The land is held somewhat tenuously in so-called strategic land banks via contractual arrangements like options. When MMR constrained the ability of households to borrow at 7 or 8 times earnings the plans to build out no longer made money; the land prices the developers had committed to pay were too high for buyers to cover.

Ordinarily the builders would have just waited for the the ability of buyers to grow to the point where the home buyers could pay the prices that were baked-in by the price that was to be paid for the land. This would have resulted in a collapse in the volumes of new houses being built and that would have been bad politics. Help to Buy squared the circle. The developers could now sell at a price which was 20% higher than what borrowers could afford to pay. That was enough to make a profit so the houses got built. (Given the very modest level of real earnings growth absent Help to Buy build out rates would have been much lower. I think that you could make the argument that Help to Buy has a negative impact on house prices because it increases supply without impacting people's ability to pay for second-hand houses.)

Good comments but looking at the NE for example, what I see is FTBs being `helped' to borrow a total of £144k on average, in an area where average house prices are around £120k.  With an average number of bedrooms of >3, quite a few FTBs are buying 4 beds.

The big assumption as well is that the developers can't be allowed to make a loss on their speculative purchase of land.  If they are to have a go-slow on building and releasing, then another option would be to tax them on the value of the land or of the proposed houses.  Make building and selling at the going rate the lease worst option for them.

I'm sure I also saw some data on here recently showing that House price inflation was a lot higher for new builds than for other houses with the implication that although it might not appear to affect overall averages, without the HTB new builds in the equation there would be bigger average drops revealed.

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2 hours ago, durhamborn said:

.They seem to of forgot in the first two years of government you do the nasty stuff,then do the good stuff the last three years.

I think these announcements are indicative of her fighting for her political life day to day, she's fighting for survival day by day.

 

 

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5 hours ago, Beary McBearface said:

This. In 2014 the National Audit Office produced a report on Help to Buy. The equity loans had been announced in March 2013 and open to the public on 1 April 2013. (London Help to Buy equity loans at 40% of the sale price were not announced until February 2016.) 

At the time of the NAO report (March 2014) a geographical concentration of Help to Buy loans in the North and the Midlands was already apparent.

59d0d7d9516cb_NAOHTBequityloansgeodist.jpg.ee7d4d544daeb4023a55359bc70faccf.jpg

Source

 

Why is London take up so low? I hear it's because of £600k limit, but that's still above the average London house price. Is it just that so many London buyers are ineligible -ie live abroad, BTL etc? 

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For the few, not the many. Has always been the Tory way and always will be. 

They want high house prices so that the few can continue to make a fortune.

And I suspect this gives us a glimpse into the Tory mindset...

 

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2 hours ago, zugzwang said:

The UK economy is going to collapse anyway, whichever party is in power. The ratio of private sector debt/GDP dictates that it must. Continued govt borrowing on an heroic scale (i.e. hundreds of billions) is the only thing that might potentially limit the duration of that depression to mere years rather than decades. In that respect, at least, there's a degree of candour to the Labour position which is absent from the other side.

Oh i agree.A reflation cycle is coming and the only question is how it plays out.The government in power when the end of this cycle hits could come out destroyed,or strong.The next cycle is 99% certain to be industrial,and that will be driven from government spending.However there remains a lot of questions about how that works out.I dont agree on a depression though.That comes at the end of the next reflation cycle when CBs can print anymore due to rampant inflation.Fighting deflation this time the central banks will have almost unlimited room to print.No depression,but it will feel like one for a while.The Tories need to keep calm really.If this hits in the next 18 months,they will have 3 years to be spending all that printed money.They need an industrial policy good to go very very soon.

 

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52 minutes ago, Si1 said:

I think these announcements are indicative of her fighting for her political life day to day, she's fighting for survival day by day.

 

 

Yes that exactly it,and the reason they need to remove her now.

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6 hours ago, Beary McBearface said:

I'm not aware of any convincing evidence that Help to Buy has had any effect on house prices. My understanding of the HTB equity loans has always been that they are response to the way in which the big developers cut the roll out of new supply when prices soften.

In order to provide such evidence, you'd have to demonstrate that houses wouldn't have fallen without the scheme. 

Everything we know about economics says that HTB will push up house prices, all else being equal, and that's the best we have to go on since it's probably impossible to find convincing evidence either way.

The market seems to think that HTB pushes up prices, judging by the share prices of the house builders.

 

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Even before the election results though,  conservative governments were u turning on every policy that might disadvantage key voting groups: tax credits, social care, raising self employed NI payments. The only group they weren't concerned about annoying were the young, and now the election has proved they will vote to kick them in the teeth too. All they will do now is keep the plates spinning and hope something turns up. Last time the tories thought they were clever,  having a coronation instead of a leadership election, thus avoiding a public brexit  row within the party or the possibility of members electing a maverick hard line leaver. Instead they put someone in charge who hadn't been tested in the line of fire and will have to have an open sore leadership election now anyway. 

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1 hour ago, durhamborn said:

Yes that exactly it,and the reason they need to remove her now.

Poisoned challace, Ted Heath/barber. Utter compromised mess for 4 years. Followed by lefty Callaghan govt inheriting said mess. We've not seen a Labour govt inheriting a bad economy for some years.

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1 minute ago, Si1 said:

Poisoned challace, Ted Heath/barber. Utter compromised mess for 4 years. Followed by lefty Callaghan govt inheriting said mess. We've not seen a Labour govt inheriting a bad economy for some years.

Exactly Si1,like iv said before we are going back to the 70s for a cycle.Labour will come in and sterling will crash,inflation will be flying higher and wages will spiral up,but consumption will be falling.People need to look at where rates were in 1982 and why,,if/when we crash now ,fill up on inflation assets while they are dirt cheap.

"I have not the slightest doubt that the economic measures and the Socialist measures which one will find in the countries of Eastern Europe, will become increasingly powerful against the unco-ordinated, planless society in which the West is living at present."

"There are times, perhaps once every thirty years, when there is a sea-change in politics. It then does not matter what you say or what you do. There is a shift in what the public wants and what it approves of. I suspect there is now such a sea-change "

Corbyn or Callaghan?

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16 minutes ago, Si1 said:

Poisoned challace, Ted Heath/barber. Utter compromised mess for 4 years. Followed by lefty Callaghan govt inheriting said mess. We've not seen a Labour govt inheriting a bad economy for some years.

Yes, the UK could easily be in deep HPC+recession in 4 years' time. Budget deficit exploding, banks back on the brink, Universal Credit struggling to keep the masses fed and housed, sterling tanking and driving up inflation, almost everybody under 50 (60?) totally cheesed off after 15 years of falling real wages.

Edited by Dorkins

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2 hours ago, PropertyMania said:

Why is London take up so low? I hear it's because of £600k limit, but that's still above the average London house price. Is it just that so many London buyers are ineligible -ie live abroad, BTL etc? 

Those London figures seem strange? Are there many new build 2 beds for £280k? Not sure I've noticed them.

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6 hours ago, Democorruptcy said:

I don't see the houses near me being built using the scheme as for FTBs. Up to £600k is too much there are lots of 4 or 5 bed detached. You could argue it's to eliminate the need for a second step and just go straight to a large house. It could even be used for the second step, you don't have to have never owned to use it. 

The MMR rules could be a driving factor in people going straight for a larger home. The rules actively penalise families needing childcare in a way that has never been the case before.

Shortly after MMR came in i read a post on MSE from a broker testing the new rules through a building societies online system. IIRC A young single guy earning around £17k would be authorised for about £80k in lending. If you changed the application to show a non-working spouse and a young child in the household and made no other changes the system would authorise less than £1k in lending. Virtually nothing.

If you havent upsized before you have to admit you're having your first kid you are stuffed. Seen quite a few threads on MSE along the lines of 'do i have to tell the bank im pregnant','maternity leave starting before completion - help' etc...

You could argue that til the late 70s/mid 80s mortgage lending criteria was equally strict as MMR has brought in and your bank manager would go through your budget with a fine tooth comb... But back then single income households were the norm.

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3 hours ago, Tempus said:

For the few, not the many. Has always been the Tory way and always will be. 

They want high house prices so that the few can continue to make a fortune.

And I suspect this gives us a glimpse into the Tory mindset...

 

Lunatic fringe.

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3 hours ago, Tempus said:

For the few, not the many. Has always been the Tory way and always will be. 

They want high house prices so that the few can continue to make a fortune.

And I suspect this gives us a glimpse into the Tory mindset...

 

I disagree. You can make a lot more money in a cyclical market... 

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3 hours ago, Tempus said:

For the few, not the many. Has always been the Tory way and always will be. 

They want high house prices so that the few can continue to make a fortune.

And I suspect this gives us a glimpse into the Tory mindset...

 

If that's true then the Tories are truly doomed.

These muppets should come and have a chat with me about what it takes to buy a house through purely earned income, it's a very difficult experience, and oddly does not involve a fake tan or season ticket in sight.

Achingly out of touch.

I know many people who would have considered voting Tory who have all swung into die-hard  Labour voters (despite, not because of Corbyn) due to a mixture of Housing and other policies that have pushed money to Asset Owners and screwed the once natural Tory aspirational/working voters.

Combine this with the genuine Left-wing uprising, Remainers, and the collapse of the Lib Dems, and however bad the most pessimistic Tories think the next election is going to be for them, if the current direction of travel continues, then it is going to be much much worse.

Edited by london_thirtythree

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  • 239 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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