tuggybear Posted July 12, 2008 Share Posted July 12, 2008 (edited) Homeowners struggling to meet their mortgage payments would be able to sell their homes to the local authority and rent them back as tenants under radical proposals being considered by the government to prevent the misery of repossession. Emergency measures to allow families to keep a roof over their heads are being drawn up as the scale of repossessions proceedings becomes increasingly apparent. In Newcastle upon Tyne alone, the newly nationalised Northern Rock is monopolising at least one day a week in the county court to pursue defaulting borrowers. The latest rescue package reflects growing fears about the seriousness of the crisis, with some analysts predicting that house prices could fall by 35 per cent. Ministers are worried about the 13 per cent of fixed-rate borrowers whose cheap deals expire this year, some of whom may by then be in negative equity and therefore unable to switch to a new fixed rate with another lender. Caroline Flint, the Housing Minister, told The Observer yesterday: 'I am looking at what more we can do with our colleagues in local authorities - what they can do as well as actually building [homes], and what support they could give to people who might be feeling under pressure on mortgages.' Asked to confirm that she was considering rent-back schemes, enabling homeowners to become council tenants in their original houses rather than be repossessed, she said: 'We are looking at that. I have to be certain that the choices I make do actually help to limit the damage; and, importantly, is it a short-term fix or a long-term impact?' The scheme would be expensive. Councils would need central government funds to buy the houses. But it could save on the long-term costs of rehousing homeless families and allow councils to increase their housing stock at relatively low prices. Flint also suggested the Bank of England could increase the size of its £50bn fund designed to stimulate mortgage lending, admitting she was 'disappointed' that the cash that has been pumped in so far had not led to cheaper home loans. 'No doubt our colleagues in the Bank and the Monetary Policy Committee will also be looking at the issue in terms of whether any extra has to be provided,' she added. She has suggested that country landowners could be freed to build cheap houses for their workers on their own land, in a return to the system of 'tied cottages'. 'It's recognising that sense of community and how everybody has a part to play,' she said. Debt advice experts warned yesterday that, despite the Chancellor's calls for leniency from lenders, Northern Rock was now aggressively pursuing defaulting borrowers as part of its efforts to repay the £25bn rescue package it received from the government. Chris Jary, director of Action for Debt in Durham, said: 'There used to be a small group of sub-prime lenders who you knew would always go straight to court. But recently it's Northern Rock who have become more aggressive, taking legal action as soon as they can.' House repossessions at Northern Rock are running at twice the rate they were before the bank was nationalised in February Link : http://www.guardian.co.uk/business/2008/ju...nch.houseprices Total crap! Our government is in negative equity. They could not afford to buy up these over-priced house's, how would they value them? Her idea for the Gentry to build houses for their surfs is incredible! Edited July 12, 2008 by tuggybear Quote Link to comment Share on other sites More sharing options...
Guest Bart of Darkness Posted July 12, 2008 Share Posted July 12, 2008 The scheme would be expensive. I see a major stumbling block here. Quote Link to comment Share on other sites More sharing options...
godless Posted July 12, 2008 Share Posted July 12, 2008 Wow...just wow!!! Quote Link to comment Share on other sites More sharing options...
Flatdog Posted July 12, 2008 Share Posted July 12, 2008 'She has suggested that country landowners could be freed to build cheap houses for their workers on their own land, in a return to the system of 'tied cottages'.' Now, there is a revolutionary concept for you.....this 'news' article has to be a hoax....jeez...I really hope that it is. Quote Link to comment Share on other sites More sharing options...
Namaste Posted July 13, 2008 Share Posted July 13, 2008 (edited) Like she said when she 'leaked' her housing report - We need to look like we are doing something, and that we're on the homeowner's side. But this bit confuses me: But it could save on the long-term costs of rehousing homeless families and allow councils to increase their housing stock at relatively low prices. How do they increase housing stock at relatively low prices through rent back? Surely the local authority would have to pay the remaining mortgage balance? Edited July 13, 2008 by Namaste Quote Link to comment Share on other sites More sharing options...
ChumpusRex Posted July 13, 2008 Share Posted July 13, 2008 So where's the money for this hair-brained scheme going to come from? Actually, wait, I think I can guess. I wonder if the govt will be paying 'market price' as set by foreclosure auction - or whether they'll be paying 'VI value' to ensure that any mortgage shortfall is covered, with a nice windfall to the distressed labour voter. Quote Link to comment Share on other sites More sharing options...
Guest sillybear2 Posted July 13, 2008 Share Posted July 13, 2008 Wow, NuLabour have become a bunch of scummy sell and rent back merchants, they've hit new depths of desperation. Things must be really bad out there if they've decided to be so reckless with the public finances, obviously the repo figures are soon going to be far worse than the early 90's and we've only just begun. People have already realised we're run by a bunch of clueless muppets that are simply victims of circumstance, hopefully this will mean they will be soon out of office for at least a generation, if not forever, the clock is ticking and they stand no chance of re-relection. Quote Link to comment Share on other sites More sharing options...
Guest sillybear2 Posted July 13, 2008 Share Posted July 13, 2008 If they want to build more homes and house homeless families the government/councils can grant themselves planning permission on agricultural land, why the hell do they need to buy homes on the open market? It's like Ford going out there and paying top price for a bunch of used VW's. Quote Link to comment Share on other sites More sharing options...
MRMX9 Posted July 13, 2008 Share Posted July 13, 2008 As I understand it Westminster City Council is planning to buy back former council homes (at about 10 times what they sold them for under right to buy) to house homeless families. Madness - but I suppose its a quicker way of obtaining council housing than actually building it Quote Link to comment Share on other sites More sharing options...
RajD Posted July 13, 2008 Share Posted July 13, 2008 This could be quite a clever move by the gvt - with certain provisions. If local authorities were instructed to buy just a few houses in the more repossession-prone areas at slightly-above-current-market-value as opposed to imposing a severe haircut like the current sell-and-rent-back schemes do, this could work to keep house prices from falling. House prices are set at the margin, so if you can keep the sale prices at the margin artificially elevated, this would stop or slow the 'house prices going down because they're expected to go down further' spiral driven by market sentiment. Plus they get to restore their social housing stock. It might have been workable if the gvt's debt burden wasn't so huge, but they might just PFI it and screw future gvts and generations instead. Cheers Gordo. Useless fickwut Quote Link to comment Share on other sites More sharing options...
copydude Posted July 13, 2008 Share Posted July 13, 2008 The scheme would be expensive.I see a major stumbling block here. and . . . Caroline Flint, the Housing Minister, told The Observer: 'I am looking at what more we can do with our colleagues in local authorities Ooops. No Labour councils anymore. Another stumbling block. Quote Link to comment Share on other sites More sharing options...
Guest sillybear2 Posted July 13, 2008 Share Posted July 13, 2008 This could be quite a clever move by the gvt - with certain provisions. If local authorities were instructed to buy just a few houses in the more repossession-prone areas at slightly-above-current-market-value as opposed to imposing a severe haircut like the current sell-and-rent-back schemes do, this could work to keep house prices from falling. House prices are set at the margin, so if you can keep the sale prices at the margin artificially elevated, this would stop or slow the 'house prices going down because they're expected to go down further' spiral driven by market sentiment. Plus they get to restore their social housing stock. So you're basically saying it should be government policy to prevent markets from naturally correcting themselves and to make housing permanently unaffordable? And endless sums of public money should be used to that ends, FTB'ers should be taxed so they can be priced out of the market? It was this kind of king canute attitude that lead to Black Wednesday. Quote Link to comment Share on other sites More sharing options...
1929crash Posted July 13, 2008 Share Posted July 13, 2008 Homeowners struggling to meet their mortgage payments would be able to sell their homes to the local authority and rent them back as tenants under radical proposals being considered by the government to prevent the misery of repossession.Emergency measures to allow families to keep a roof over their heads are being drawn up as the scale of repossessions proceedings becomes increasingly apparent. In Newcastle upon Tyne alone, the newly nationalised Northern Rock is monopolising at least one day a week in the county court to pursue defaulting borrowers. The latest rescue package reflects growing fears about the seriousness of the crisis, with some analysts predicting that house prices could fall by 35 per cent. Ministers are worried about the 13 per cent of fixed-rate borrowers whose cheap deals expire this year, some of whom may by then be in negative equity and therefore unable to switch to a new fixed rate with another lender. Caroline Flint, the Housing Minister, told The Observer yesterday: 'I am looking at what more we can do with our colleagues in local authorities - what they can do as well as actually building [homes], and what support they could give to people who might be feeling under pressure on mortgages.' Asked to confirm that she was considering rent-back schemes, enabling homeowners to become council tenants in their original houses rather than be repossessed, she said: 'We are looking at that. I have to be certain that the choices I make do actually help to limit the damage; and, importantly, is it a short-term fix or a long-term impact?' The scheme would be expensive. Councils would need central government funds to buy the houses. But it could save on the long-term costs of rehousing homeless families and allow councils to increase their housing stock at relatively low prices. Flint also suggested the Bank of England could increase the size of its £50bn fund designed to stimulate mortgage lending, admitting she was 'disappointed' that the cash that has been pumped in so far had not led to cheaper home loans. 'No doubt our colleagues in the Bank and the Monetary Policy Committee will also be looking at the issue in terms of whether any extra has to be provided,' she added. She has suggested that country landowners could be freed to build cheap houses for their workers on their own land, in a return to the system of 'tied cottages'. 'It's recognising that sense of community and how everybody has a part to play,' she said. Debt advice experts warned yesterday that, despite the Chancellor's calls for leniency from lenders, Northern Rock was now aggressively pursuing defaulting borrowers as part of its efforts to repay the £25bn rescue package it received from the government. Chris Jary, director of Action for Debt in Durham, said: 'There used to be a small group of sub-prime lenders who you knew would always go straight to court. But recently it's Northern Rock who have become more aggressive, taking legal action as soon as they can.' House repossessions at Northern Rock are running at twice the rate they were before the bank was nationalised in February Link : http://www.guardian.co.uk/business/2008/ju...nch.houseprices Total crap! Our government is in negative equity. They could not afford to buy up these over-priced house's, how would they value them? Her idea for the Gentry to build houses for their surfs is incredible! It's serfs, or do you mean smurfs? Quote Link to comment Share on other sites More sharing options...
Nicholas Cage Posted July 13, 2008 Share Posted July 13, 2008 (edited) Labour 1974 Manifesto We have, in the last few months Given an extra £350m for councils to build more new houses and buy existing housing; Given a £500m loan to Building Societies to keep mortgage rates down, and to make more mortgages available; The next Labour Government will Abolish the agricultural tied cottage system; Reverse the disastrous fall in house-building, which will include measures to tackle the 'lump' and other proposals which must be worked out by both sides of the construction industry to attack the system of casual labour in the industry and create a stable, permanent work force; Help home-buyers through a new National Housing Finance Agency to assist first-time buyers and to stabilise mortgage lending. Local councils' lending will be expanded so that they can play a major part in helping house purchasers and keep down costs by supplying unified services for estate agency, surveying, conveyancing and mortgages; Edit: Had a thought about what inflation was doing. 18 June 1970 Edward Heath Conservative 28 February 1974 Harold Wilson Labour −33 10 October 1974 Harold Wilson James Callaghan Labour 3 3 May 1979 Margaret Thatcher Conservative 43 9 June 1983 Margaret Thatcher Conservative 144 YOY Inflation 1970 5.9% 1971 8.6% 1972 6.4% 1973 8.4% 1974 17.2% 1975 24.2% 1976 16.5% 1977 15.8% 1978 8.3% 1979 13.4% 1980 18.0% 1981 11.9% 1982 8.6% 1983 4.6% 1984 5.0% 1985 6.1% 1986 3.4% Edited July 13, 2008 by maxwell Quote Link to comment Share on other sites More sharing options...
lets get it right Posted July 13, 2008 Share Posted July 13, 2008 What about people who rent in the private sector who fall on hard times? NO HELP FOR THEM!!!!! What is so special about people who borrowed more than they could afford to repay if interest rates went up? Quote Link to comment Share on other sites More sharing options...
AC2 Posted July 13, 2008 Share Posted July 13, 2008 So where's the money for this hair-brained scheme going to come from?Actually, wait, I think I can guess. I wonder if the govt will be paying 'market price' as set by foreclosure auction - or whether they'll be paying 'VI value' to ensure that any mortgage shortfall is covered, with a nice windfall to the distressed labour voter. This is the reason I'm still a 'Neither' (though with bearish tendencies). I wouldn't put it past this bunch of fools to use every tool at their disposal to prop up prices, even at the expense of totally destroying the rest of the economy (more than they have already). I hope there isn't enough money available for schemes like this to get off the ground or have an effect, but we'll see. Quote Link to comment Share on other sites More sharing options...
29929BlackTuesday Posted July 13, 2008 Share Posted July 13, 2008 (edited) "even at the expense of totally destroying the rest of the economy (more than they have already)." Well that will make prices fall faster wouldn't it? This is all bluster like all their other schemes. The market is falling fast now - nothing can stop this juggernaught. Edit for the educated out there (definition of juggernaught): http://en.wikipedia.org/wiki/Juggernaught Edited July 13, 2008 by 29929BlackTuesday Quote Link to comment Share on other sites More sharing options...
uncle_monty Posted July 13, 2008 Share Posted July 13, 2008 She has suggested that country landowners could be freed to build cheap houses for their workers on their own land, in a return to the system of 'tied cottages'. 'It's recognising that sense of community and how everybody has a part to play,' she said. Total crap! Our government is in negative equity. They could not afford to buy up these over-priced house's, how would they value them? Her idea for the Gentry to build houses for their surfs is incredible! It's not just fashion that goes in cycles. This is nothing less than modern day feudalism. Quote Link to comment Share on other sites More sharing options...
AC2 Posted July 13, 2008 Share Posted July 13, 2008 "even at the expense of totally destroying the rest of the economy (more than they have already)."Well that will make prices fall faster wouldn't it? This is all bluster like all their other schemes. The market is falling fast now - nothing can stop this juggernaught. Edit for the educated out there (definition of juggernaught): http://en.wikipedia.org/wiki/Juggernaught I'd say the economy has been screwed for years, yet prices stilll kept going up. If the desire is there (and let's face it, schemes like this are ultimately designed to shift money from tax-payers to banks), then prices could be 'supported' for another couple of years, though at a massive cost in terms of taxes, etc. It would be lunacy, of course, but that's not a major barrier to this bunch. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted July 13, 2008 Share Posted July 13, 2008 someone needs to find some headlines on "cures" from the US in Sept-November 2007. You will find similar schemes demanded and supported by their government. They didnt work there, they wont work here, or anywhere else. There is a credit crunch going on. This means there is no money. Imagine the uproar where people, already "struggling" with higher food and fuel bills, find theres another £bn to be found in their council tax to fund people who cant pay their mortgage. Struggle and you suffer more. give in and you get bailed. Which would YOU choose? How DO you feel about it. Outraged I bet. Lastly, this minister clearly has no understanding whatsoever what effect the 50bn for the banks would have had. Most posters on this site could have told her. Either that, or she is lying. Quote Link to comment Share on other sites More sharing options...
AC2 Posted July 13, 2008 Share Posted July 13, 2008 (edited) someone needs to find some headlines on "cures" from the US in Sept-November 2007. Me? I know about them. Like I say, I'm a 'Neither' with bearish tendencies and would probably change to 'Bear' if it didn't change the setting in all my previous posts too. As time goes by I know there's less and less chance that any idiot market-prop scheme can work. But I don't think we're quite at the 'no chance' stage yet. Most of the people I speak to, while grudgingly accepting that I was (nearly) right to call a Q2/08 recession in Q1/07, still believe this is only a downward blip and that 'historically, house prices always go up in the long term.' Sentiment is not dead; it just has a bad cold. Give it a sh*tload of money, from whatever source - and that includes recycled taxes - and it'll come bouncing back to life. A morally and financially bankrupt government may have nothing to lose by trying. Edited to add: the US case is slightly different because they still have some productive aspects to their economy, and will probably bounce back after a few years. Ours is based on consumerism and financial fraud. If they fail... And how do I feel? Annoyed, but I'm leaving the UK next month. Edited July 13, 2008 by AC2 Quote Link to comment Share on other sites More sharing options...
council dweller Posted July 13, 2008 Share Posted July 13, 2008 Strangely enough, the government is now trying to encourage councils to sell their housing stock to housing associations. Our council is trying to sell it's stock for 7,000 per unit. Maybe someone should let her know. Indeed , as another poster said, councils should buy agricultural land and build on it as they did years ago. I think she's a bit confused. Quote Link to comment Share on other sites More sharing options...
Mikhail Liebenstein Posted July 13, 2008 Share Posted July 13, 2008 So where's the money for this hair-brained scheme going to come from?Actually, wait, I think I can guess. I wonder if the govt will be paying 'market price' as set by foreclosure auction - or whether they'll be paying 'VI value' to ensure that any mortgage shortfall is covered, with a nice windfall to the distressed labour voter. Council's do have a legal duty to achieve value for money, so unless the Government bends the rules it will be the VI price. Personally I think they should allow the foreclosure and re-house the people using property taken under an empty dwelling management order. This is far cheaper. Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted July 13, 2008 Share Posted July 13, 2008 Got a better idea. Responsibility for re-housing anybody who borrowed over 4x salary or 90% should fall on the commission hunting lender not the taxpayer. More taxes for this will go down lick a bag of sick. If Nulabour think this will preserve some votes they are dead wrong and extra taxes are just as likely to cause as many if not more defaults in the wider economy. As usual it is fleece the prudent and dole out the money to the reckless. Quote Link to comment Share on other sites More sharing options...
Guest KingCharles1st Posted July 13, 2008 Share Posted July 13, 2008 (edited) Maybe it could run along Labia's new scheme of giving a free HGV license to everyone who currently owns a Chelsea tractor- talk about a neat way of cutting unemployment figures.. Flint could have been forgiven up till now for being a horny beatch, but no longer, and to stack her up alongside that stupid idiotic tart who stood in for the Slime Minister last Wednesday, I think we are all now officially ******ed. Edited July 13, 2008 by KingCharles1st Quote Link to comment Share on other sites More sharing options...
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