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Morgan Stanley To "help" Home Buyers

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Morgan Stanley to help home buyers

Morgan Stanley, the US investment bank, is set to launch a product aimed at allowing homeowners to borrow much more money than traditional lenders permit, in exchange for giving up some of the future increase in the value of their houses.

Banks seem to be still set on finding ever more ways to add liquidity to the market.

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that may actually be a sensible way to borrow.

No it's a way to keep the burden of house prices on the younger generations higher. At the end of your mortgage who owns that house, not you. So what do you do next, take out another loan, I doubt they will be letting you live rent free in their 50% of the house.

Shared Equity is a disaster, the only winner if it succeeds in propping up house prices are the banks. They get to keep you in more debt for longer!

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And if house prices increase over the longer term (even in line with inflation and wages), this scheme makes it much harder for owners to upgrade to bigger houses, since they will have to forfeit a chunk of equity every time they move home, and must stump up even bigger mortgages each time.

So the banks get customers for life, with even bigger debts than before. And buyers get the same houses, but at higher prices and with little hope of ever moving up the fabled "housing ladder".

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  • 301 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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