The Ayatollah Buggeri Posted November 5, 2007 Share Posted November 5, 2007 (edited) Story. Shelter spokesman: "Given the Government's willingness to jump to the rescue of Northern Rock, they should now show the same compassion to those facing mortgage difficulties and save thousands of homeowners from the devastating effects of repossession and homelessness." A completely false comparison, IMHO. Retail savings in a high-street bank are known for being a low-risk, low return investment, and therefore customers are morally entitled to at least a certain degree of safety net if it goes under (or is in danger of doing so). With the housing market, on the other hand, everyone knows that HPs and IRs can go up AND down, and if a homebuyer fails to take that into account, there's no way the government should protect them from the consequences of their errors. To do so would be an almighty kick in the teeth for the millions of priced out FTBs who've saved and waited. Edited November 5, 2007 by The Ayatollah Bugheri Quote Link to comment Share on other sites More sharing options...
House of Lords Posted November 5, 2007 Share Posted November 5, 2007 I think what she's actually saying is: Dear Government, please can we have some more funding, even just a small drop of the amount you gave to that nice Northern Rock, and we'll leave you alone To be honest, if you could buy shares in Shelter, now would be a good time! Quote Link to comment Share on other sites More sharing options...
fluffy666 Posted November 5, 2007 Share Posted November 5, 2007 A completely false comparison, IMHO. Retail savings in a high-street bank are known for being a low-risk, low return investment, and therefore customers are morally entitled to at least a certain degree of safety net if it goes under (or is in danger of doing so). With the housing market, on the other hand, everyone knows that HPs and IRs can go up AND down, and if a homebuyer fails to take that into account, there's no way the government should protect them from the consequences of their errors. To do so would be an almighty kick in the teeth for the millions of priced out FTBs who've saved and waited. Boo! I was just about to stop paying my mortgage.. Actually, it even hits those of us who have bought; If house prices had not gone so mad, then my 3.5x salary mortgage would have given me a much nicer house - or I'd have a much smaller mortgage on the same house. A bailout would benefit those who bidded prices up in the first place by taking on silly mortgages, and those who 'withdrew equity' for a few new cars and holidays. Quote Link to comment Share on other sites More sharing options...
Papitogrande Posted November 5, 2007 Share Posted November 5, 2007 Although it would be utterly wrong to do so, don't rule out some attempt by the government to bail out OOs. Never before in history have we had such a spineless, opinion poll driven political climate. If there's votes in it Gordy will try to find a way. If that were to happen could you see Cameron challenging it and having the guts to tell the country to take it's medicine? Quote Link to comment Share on other sites More sharing options...
Dylan Posted November 5, 2007 Share Posted November 5, 2007 (edited) As a percentage of total voters, those at risk of losing their homes is probably very small, unless the situation is a lot worse than anyone imagines. I would hope the majority, who have borrowed sensibly or held off buying at completely, would not stand for financial handouts of this type. Edited November 5, 2007 by Dylan Quote Link to comment Share on other sites More sharing options...
South Lorne Posted November 5, 2007 Share Posted November 5, 2007 ...bail out the OO's 4x4's , foreign holidays, rolex watches.......side splitting idea..!.....this Government is about to learn about the real world.....!...... Quote Link to comment Share on other sites More sharing options...
Levy process Posted November 5, 2007 Share Posted November 5, 2007 ...bail out the OO's 4x4's , foreign holidays, rolex watches.......side splitting idea..!.....this Government is about to learn about the real world.....!...... Yep. If you voted labour, enjoy what is bound to be their last 3 years in power this century. Quote Link to comment Share on other sites More sharing options...
Guest An Bearin Bui Posted November 5, 2007 Share Posted November 5, 2007 Story.Shelter spokesman: A completely false comparison, IMHO. Retail savings in a high-street bank are known for being a low-risk, low return investment, and therefore customers are morally entitled to at least a certain degree of safety net if it goes under (or is in danger of doing so). With the housing market, on the other hand, everyone knows that HPs and IRs can go up AND down, and if a homebuyer fails to take that into account, there's no way the government should protect them from the consequences of their errors. To do so would be an almighty kick in the teeth for the millions of priced out FTBs who've saved and waited. No-one's ever listened to Shelter before so why should they start now? Quote Link to comment Share on other sites More sharing options...
Woody Finch Posted November 5, 2007 Share Posted November 5, 2007 ...bail out the OO's 4x4's , foreign holidays, rolex watches.......side splitting idea..!.....this Government is about to learn about the real world.....!...... Check out what's happening in the US at the moment - huge political momentum in support of bailing out homeowners :angry: Quote Link to comment Share on other sites More sharing options...
Vespasian Posted November 5, 2007 Share Posted November 5, 2007 No - bailing out homeowners would be impossible How would you judge whom needed help? Bailing out a bank is one thing, but bailing out Joe Blogs maxed out on credit - you would set a marker for the future that would be impossible to maintain Quote Link to comment Share on other sites More sharing options...
Woody Finch Posted November 5, 2007 Share Posted November 5, 2007 No - bailing out homeowners would be impossibleHow would you judge whom needed help? Bailing out a bank is one thing, but bailing out Joe Blogs maxed out on credit - you would set a marker for the future that would be impossible to maintain Politicians only care about what will help them keep power at the next election. The future is irrelevant to them. Quote Link to comment Share on other sites More sharing options...
ma-ku Posted November 5, 2007 Share Posted November 5, 2007 In the case of families with children, I think the government will have to bail them out one way or another. (Be it via social housing or by subsidising mortgage repayments). I don't see that they have a choice. As for those without kids, who knows.. Quote Link to comment Share on other sites More sharing options...
Vespasian Posted November 5, 2007 Share Posted November 5, 2007 Politicians only care about what will help them keep power at the next election. The future is irrelevant to them. Thats true, if Brown tried this, his own party would bundle him out - nobody is that safe Quote Link to comment Share on other sites More sharing options...
Woody Finch Posted November 5, 2007 Share Posted November 5, 2007 In the case of families with children, I think the government will have to bail them out one way or another. (Be it via social housing or by subsidising mortgage repayments). I don't see that they have a choice. As for those without kids, who knows.. In any case councils have a statutory obligation to house anyone who is involuntarily made homeless. So the bailout is already there. Quote Link to comment Share on other sites More sharing options...
Woody Finch Posted November 5, 2007 Share Posted November 5, 2007 Thats true, if Brown tried this, his own party would bundle him out - nobody is that safe Why do you think that ? You think the Labour party has some big commitment to avoiding moral hazard or penalising home owners or something? Quote Link to comment Share on other sites More sharing options...
Vespasian Posted November 5, 2007 Share Posted November 5, 2007 Why do you think that ? You think the Labour party has some big commitment to avoiding moral hazard or penalising home owners or something? Not really, but the next generation within Labour will not want GB to mess it up any more than he already has. One day, Brown will be gone and someone else will want to be PM. Fear of the future will force Brown out. When the Tories got rid of Thatcher, they thought she had done irrevocable damage and elected JM to take a tanking in '92. What they forgot was how much Labour ballsed things up in the 70s and destroyed themselves for a 20years. A veritable sh*tstorm is coming. GB will be the fall-guy. He should have cut back on spending 5 years ago, reduced taxes and told the BoE to keep rates above 4.5% and left pensions alone Quote Link to comment Share on other sites More sharing options...
Lord D'arcy Pew Posted November 5, 2007 Share Posted November 5, 2007 I believe councils have not been allowed to spend the money raised from the sale of ex-council houses. This money could be used to buy up housing stock at cheap prices, and then used as council housing again. If the housing maket recovers then councils could sell off again raising funds. Quote Link to comment Share on other sites More sharing options...
?...! Posted November 5, 2007 Share Posted November 5, 2007 There is a good deal of debate going on behind various doors regard the pro's and cons of offering a more resilient safety net. The two main pillars of the argument to consider are thus... Allowing the market to rebalance itself is the most efficient and responsive way to overcome any problem, allowing free market dynamics to respond to windows of opportunity with regard to market misalignments will quickly close those misalignments, and is the best way to ensure resources reach those best placed to utilise them. This is/was and always will be the fastest and most efficient method for overcoming problems of an economic nature. Has the housing issue reached a critical mass? Has the seeking of capital gains via complex Ponzi lending (instantly recognisable to more sophisticated Western financiers) financed by naive East Asian and Middle Eastern surpluses become so large that the main problems associated with the issue here at home, are no longer economic problems. Has our society (not our economy) been exposed to a greater destabilising risk? Which is the more damaging? The economic implications of a socialist policy (a bailout). The social implications of a capitalist policy (market dynamics). Now I believe the US will always plump for a solution based in market dynamics, the US is the worlds most dynamic efficient and responsive economy, and for those reasons, also the worlds largest economy. The UK however is a strange place, we have a more socialist history than our transatlantic cousins, we have many socialist in our government. I think we are more likely to distract those amongst us who create our wealth with socialist burdens and bad economic policy. And at a time when labour is gaining ever more mobility the decision gains monolithic proportions. Do we hamstring our economic prospects? Or do we live amongst the deprived? A divided Britain or a sinking Britain? Quote Link to comment Share on other sites More sharing options...
Orbital Posted November 5, 2007 Share Posted November 5, 2007 A completely false comparison, IMHO. Retail savings in a high-street bank are known for being a low-risk, low return investment, and therefore customers are morally entitled to at least a certain degree of safety net if it goes under (or is in danger of doing so). With the housing market, on the other hand, everyone knows that HPs and IRs can go up AND down, and if a homebuyer fails to take that into account, there's no way the government should protect them from the consequences of their errors. To do so would be an almighty kick in the teeth for the millions of priced out FTBs who've saved and waited. A genuine moral concern or does someone have a vested interest ?! I think there is a case to be concerned about people being made homeless. Certainly doesnt make me happy to see. But then im not a bitter FTB. Quote Link to comment Share on other sites More sharing options...
Blue Peter Posted November 5, 2007 Share Posted November 5, 2007 There is a good deal of debate going on behind various doors regard the pro's and cons of offering a more resilient safety net.... Do we hamstring our economic prospects? Or do we live amongst the deprived? A divided Britain or a sinking Britain? I seem to remember that when government bail-outs have been brought up before, you tend to say that there just isn't the money to do it, which is presumably why you use words such as "hamstring". Is there any chance that anything significant could be done? Peter. Quote Link to comment Share on other sites More sharing options...
The Ayatollah Buggeri Posted November 5, 2007 Author Share Posted November 5, 2007 A genuine moral concern or does someone have a vested interest ?! I think there is a case to be concerned about people being made homeless. Certainly doesnt make me happy to see. But then im not a bitter FTB. As Woody Finch points out, councils have a statutory obligation to house anyone who is involuntarily made homeless. I don't object to that: what I object to is the prospect of homeowners who borrowed irresponsibly having their mortgages subsidised by the taxpayer (as distinct from being offered alternative rented accommodation). That is the moral hazard: the prospect of the taxpayer protecting someone who gambled and lost from having to face the consequences of their actions. Were that to happen, it would send a clear signal that anyone can borrow as much as they can get their hands on, without having to worry about the long-term sustainability of their being able to service the loan. Quote Link to comment Share on other sites More sharing options...
shitfly Posted November 5, 2007 Share Posted November 5, 2007 Agreed, but the fraudsters at work here (brokers etc) must also be taken to task... Quote Link to comment Share on other sites More sharing options...
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