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Fat Boris to allow spongers to buy houses with their housing benefit


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Surely this just does nothing?

If you are on housing benefit then you cannot have more than £6-16k in the bank. So no deposit worth talking about. So automatically they cannot get a mortgage.

And even if they could get a 100% mortgage then they still aren't going to be able to borrow much of anything as to be on housing benefit you have to earn little. No banks are going to lend to these people to buy a 400k home. They aren't lending £400k to a family on £40k a year lol. That is mad and they will never do it.

Doesn't matter how much you fudge the numbers, people on benefits aren't buying £300k homes.

Sounds like Boris policy. Aka it does nothing and grabs a headline.

So, if this is their prop then I don't see it doing anything. 

As I said in other threads, they have no money. Both of these schemes are without any funding and the right to buy scheme is capped at £500m in certain areas. So it is just meaningless. HTB going and no replacement basically. Props actually disappearing. HPC more likely having read this.

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This is also not going to be popular politically and I suspect will just never happen. HTB was popular politically because it helped normal people. People on housing benefit (which means you have no money basically) getting help to buy a house won't be popular with normal people not getting help to buy a house.

So I doubt this ever happens, but if it does it still won't do anything.

Most interesting news if they right to buy thing is confirmed to just be a political stunt. No new money for it and just a few pilot schemes capped at £500m (which is nothing).

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4 minutes ago, henry the king said:

Surely this just does nothing?

If you are on housing benefit then you cannot have more than £6-16k in the bank. So no deposit worth talking about. So automatically they cannot get a mortgage.

Quote

Johnson is also expected to announce a review of the mortgage market to see if there are ways to reduce people’s deposits. Ministers say that more than half of those in the private rented sector can afford to service a mortgage, but just 3 per cent have enough savings for a deposit.

And even if they could get a 100% mortgage then they still aren't going to be able to borrow much of anything as to be on housing benefit you have to earn little. No banks are going to lend to these people to buy a 400k home. They aren't lending £400k to a family on £40k a year lol. That is mad and they will never do it.

Quote

He will say that he ultimately wants to give millions of people the ability to buy their properties at discounts of up to 70 per cent of the market price, depending on how long they have lived there.

 

Sounds like more fuel to the fire kind of thing if you ask me

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Posted (edited)
13 minutes ago, henry the king said:

Surely this just does nothing?

If you are on housing benefit then you cannot have more than £6-16k in the bank. So no deposit worth talking about. So automatically they cannot get a mortgage.

And even if they could get a 100% mortgage then they still aren't going to be able to borrow much of anything as to be on housing benefit you have to earn little. No banks are going to lend to these people to buy a 400k home. They aren't lending £400k to a family on £40k a year lol. That is mad and they will never do it.

Doesn't matter how much you fudge the numbers, people on benefits aren't buying £300k homes.

Sounds like Boris policy. Aka it does nothing and grabs a headline.

So, if this is their prop then I don't see it doing anything. 

As I said in other threads, they have no money. Both of these schemes are without any funding and the right to buy scheme is capped at £500m in certain areas. So it is just meaningless. HTB going and no replacement basically. Props actually disappearing. HPC more likely having read this.

If the government first cranks up the maximum RTB discount for HA tenants to 70% to match the council housing situation then the tenant only needs to finance 30% of the property price via mortgage. With such a low LTV no need to worry about where the deposit is coming from, the deposit is the equity that the government is gifting the tenant.

This is HA stock we're talking about so it's not 5 bed detached houses in Surrey, a lot of it will be flats/maisonettes/cluster homes in working class neighbourhoods inhabited by low income older people who have never had much income or capital which is why they are on housing benefit. Housing stock doesn't get much cheaper than that.

Edited by Dorkins
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3 minutes ago, Dorkins said:

If the government first cranks up the maximum RTB discount for HA tenants to 70% to match the council housing situation then the tenant only needs to finance 30% of the property price via mortgage. With such a low LTV no need to worry about where the deposit is coming from, the deposit is the equity that the government is gifting the tenant.

The RTB thing has no new funding according to this article. So its not going to do anything. The government can't afford it. 

It is a pilot scheme not a nationwide policy. AKA, it will change nothing really. A few houses will be bought with it, but its meaningless.

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7 minutes ago, henry the king said:

This is also not going to be popular politically and I suspect will just never happen. HTB was popular politically because it helped normal people. People on housing benefit (which means you have no money basically) getting help to buy a house won't be popular with normal people not getting help to buy a house.

So I doubt this ever happens, but if it does it still won't do anything.

Most interesting news if they right to buy thing is confirmed to just be a political stunt. No new money for it and just a few pilot schemes capped at £500m (which is nothing).

 

You've got to be kidding! £500m is just a teaser rate to avoid spooking the horses.

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Posted (edited)
11 minutes ago, henry the king said:

The RTB thing has no new funding according to this article. So its not going to do anything. The government can't afford it. 

Why would it need any funding? Just give (up to 70% of the value of) the HA properties away.

In the long term it will cost of course because the state will have nowhere on hand to house the next generation of poor people so will have to go and rent it at PRS prices but that is not this government's concern.

Edited by Dorkins
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6 minutes ago, SomeEconGuy said:

Sounds like more fuel to the fire kind of thing if you ask me

They can review the deposit situation all they like. It won't change anything. "Reviewing" it is just to say we know its an issue and we want to show we are looking into it. But they can't do anything about it as they are broke. So the deposit thing is meaningless. We know they would like to get rid of deposits but they can't because the banks want deposits.

As for RTB, it is a pilot scheme. "Ultimately" their plan is to do it, but they can't afford it and have no new money for it. It specifically says that.

As for the benefits thing, the industry guy in the article says the only way very poor housing benefit people are buying property is with sustained support costing shitloads. Again, the government has no money for this.

As I have said previously, there are no new spending commitments here and no changes to change the market. If HTB goes and this is the replacement then HPI will be decreased. Government support will be decreased.

The things to worry about are props which put money into the market - i.e. cost the government money - such as HTB and stamp duty holidays. 

Very specifically Boris's speech tomorrow will commit £0 to housing. £500m has just been reallocated to RTB (but this is a tiny number). £0 has been allocated to "benefits to bricks".

Basically it does nothing.

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Posted (edited)
7 minutes ago, Horseradish said:

The article's got all three policies:

  • Benefits for bricks
  • RTB HA stock
  • Mortgage insurance

The two we knew, plus this new one.

The point about the government wanting to make it possible for HA tenants to service their mortgages with benefits was in the original announcement weeks ago, this isn't new either.

Edit: actually I see that the announcement is more general than that i.e. that benefits paying mortgages would apply to everybody, not just HA tenants using RTB. You're right, that is new.

Edited by Dorkins
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It's been said a thousand times but it can never be said enough.

Never ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever vote Conservative.

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Posted (edited)
5 minutes ago, zugzwang said:

 

You've got to be kidding! £500m is just a teaser rate to avoid spooking the horses.

The government is broke. If they find £5-20bn down the back of the sofa it isn't going on housing props. It is going on fuel duty cuts and income tax cuts. 

That is what they need to do to get elected.

There will be no significant funding for HPI props. As this article shows. HTB is going too. 

This is actually good news. The spin is just politics, but with no new funding for HPI props it will achieve nothing and the fact HTB is going is a +ve.

Lets not get hysterical. They are broke. Any money they have will not be spent on housing. Its going to be spent on household bills of fuel duty cuts. 

Edited by henry the king
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4 minutes ago, henry the king said:

They can review the deposit situation all they like. It won't change anything. ... But they can't do anything about it as they are broke.

You need to think universe-brain here:

Step 1: guarantee the mortgage

Step 2: let them buy HA property

Step 3: give them a 70% discount

Step 4: let them pour their housing benefit into the mortgage

You see, if you squint what they're really doing here is redirecting housing benefit to pump up the mortgage market. Cunning and evil. I mean, that is their style.

4 minutes ago, henry the king said:

The government is broke

It's not possible for them to be broke because they deficit-finance everything.

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1 minute ago, Guillotine said:

Mortgage applications will be rejected out of hand by lenders.

They're going to be insured against default - that's the other policy that they've been briefing for a while now: https://www.ft.com/content/7615ae0c-b272-49c4-922c-74c59f5467f0. So they won't be rejected at all. In fact, the banks are going to absolutely love them.

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Responsible has gone out of the window. Cant win.

Save > no thank you we will erode that with inflation.

Borrow > sure, how much do you need? As long as we have paper and ink, we can print that for you. Ah 5x your salaries, okay no problem. Oh, i can see you cant afford that house its another 5x your salaries. No problem, taxpayer has you covered. Here's another 20% free for 5 years. We call it Help to Buy.

Skint and on benefits > cant afford to pay for the heating or food? Nah we wont give you money to feed/heat you. No problem though here's 250k for a house. That 250k debt,  we've got that covered you don't need to worry. PS - best of luck feeding yourself and getting warm.

Bojo - Housing shortage, what shortage?

(tory minister) Yes boss, It looks like we've increased home ownership to 90%.

Bojo - brilliant. 

Prime Ministers Questions

Bojo - We've just reached 90% home ownership rate. That's what you get when you vote for us. Bloody Labour they couldn't even do that under 50 governments.

Ok this sounds stupid so i will stop there.....

 

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Posted (edited)
30 minutes ago, zugzwang said:

Michael Gove, the levelling up secretary, is said to have secured an agreement that every housing association property that is sold will be replaced by another to ensure that the stock of social housing is not run down.

🤮

Of course the 1 for 1 replacement won't happen, similar pledges on replacing council houses sold under RTB were never honoured.

HAs and councils are just as constrained as private developers when it comes to building new housing e.g. the cost of land and the difficulty of getting planning permission.

Edited by Dorkins
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Right to buy sounds like handing over council houses to those on benefits, personally Im all for this as  those houses start to become private homes and get gentrified.  However, it seems to be a bad idea for those on benefits as there would be less social housing.  Turkeys voting for Christmas. 

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