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wonderpup

If The Government Really Want To Get Into Mortgages

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Why bother with mortgages, just give everyone a grant of £200K.

And guess what, house prices will go up by £200K.

There is ABSOLUTELY NOTHING the government can do. Prices are falling, banks are failing. All they can do is apply a bandaid to the financials to keep them alive and HOPE they can trade through the mess.

sadly, their plans probably involved the banks making the sort of profits they did in 2007. If they dont, and many arent, then many wont make it to the finishing line.

ANY money considered for "getting the market moving" is doing no such thing. If there was a market, then it would move. What they really mean is that the market IS moving, just in the direction is wrong.

Edited by Bloo Loo

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I guess since the markets full of private banks, if northern rock suddenly started undercutting them all with public money it may not go down too well.

They have to spread the ******** evenly amongst everyone, thats only fair after all.

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With all the talk about helping the banks get lending again- and the problem that they take the profits while the taxpayer takes the risks, why don't our glorious leaders simply cut out the middle men and lend directly through their own publicly owned bank Northern Rock?

Lending problem solved and at least this way the profits come back to the treasury which legitimises the risk.

Funny that George 'show me the money' Cox didn't suggest this- could it be that he was trying to direct public money to his freinds in the city?

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Why use the Rock just cut out the wa. sorry bankers and give mortgages directly from the BoE.

I suppose NR is already set up, with branches and infrastructure, which would make it simple to do. But is there any basic reason why the Goverment needs to go through the process of swapping the banks dirty laundry for nice clean cash?

Or is the argument that once the banks feel the whole market is underpinned by public funds, it PARTY TIME!!! and the whole madness starts again?

The only rational for channeling the money through the banks rather than NR is to reanimate the corpse of indescriminate lending by providing a safety net for the bankers.

If it were just a case of making loans available to joe public, then NR would do the job fine on it's own.

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With all the talk about helping the banks get lending again- and the problem that they take the profits while the taxpayer takes the risks, why don't our glorious leaders simply cut out the middle men and lend directly through their own publicly owned bank Northern Rock?

Lending problem solved and at least this way the profits come back to the treasury which legitimises the risk.

Funny that George 'show me the money' Cox didn't suggest this- could it be that he was trying to direct public money to his freinds in the city?

it's too early or too late in the cycle however you look at it. They'll be looking at Fannie & Freddie and their off sping and thinking the timing would be v. poor. However, out of the rubble a joined up 'social bank', giving preferential treatment for FTBs perhaps buying from the distressed builders would imbibe the economy after it corrects massively. Never happen though...reading the interim report today it's quite obvious that every way the govt turns it's cornered by others with vested interests... <_<

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Why use the Rock just cut out the wa. sorry bankers and give mortgages directly from the BoE.

does the BoE even have any money left to lend?

maybe they could get a payday advance from the ECB.

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I guess since the markets full of private banks, if northern rock suddenly started undercutting them all with public money it may not go down too well.

They wouldn't need to undercut- just offer comparable rates. True, they would not be helping the banks by doing this- but helping the banks is not the point here- or is it?

The government don't need the banks in order to offer mortgages- but the banks do seem to need public money.

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does the BoE even have any money left to lend?

maybe they could get a payday advance from the ECB.

government/BOE has unlimited money to lend if need be. Look at Weimar, look at Zimbabwe if you need the money you can always print a little faster in larger denominations.

Edited by moosetea

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If mortgages all end up being held with the government, people no longer get wages but tax credits instead and we're all made to have ID cards, what's left on the list? Thought police?

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With all the talk about helping the banks get lending again- and the problem that they take the profits while the taxpayer takes the risks, why don't our glorious leaders simply cut out the middle men and lend directly through their own publicly owned bank Northern Rock?

The other banks would kick up a stink as they would claim NR had an unfair advantage. They don't believe in state assistance.

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They wouldn't need to undercut- just offer comparable rates. True, they would not be helping the banks by doing this- but helping the banks is not the point here- or is it?

The government don't need the banks in order to offer mortgages- but the banks do seem to need public money.

Oh yeh I agree in an ideal world, screw the banks, but since the government is really just the banker's b****, we might be wishing for miracles. Er, I typed miracle and forgot this was about pouring public money into the house market to start with....

Edited by Fraccy

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With all the talk about helping the banks get lending again- and the problem that they take the profits while the taxpayer takes the risks, why don't our glorious leaders simply cut out the middle men and lend directly through their own publicly owned bank Northern Rock?

Lending problem solved and at least this way the profits come back to the treasury which legitimises the risk.

Funny that George 'show me the money' Cox didn't suggest this- could it be that he was trying to direct public money to his freinds in the city?

...great ...but who wants a mortgage when house prices are falling....?....and if you are a lender ....how many people are actually good for a mortgage..?......if the government takes that on ....do I want this risk as a UK tax payer...?....no thanks..... <_<

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In propping up prices the money has to come from somewhere. Most people have a house and thus will be propping up themselves by increased taxation, this is not very different from increased mortgage rates.

The big losers are those that do not own a house since they pay the tax, but do not have a house to prop up. Alas the poor, by definition, have no money and so cant pay the tax. Taking from the poor to give to the rich also has a morality issue.

If they buy up peoples houses directly they are achieve nothing. Why pay 200k for a house that costs 50k to build when you are the ones granting planning permission. In building new houses they provide work for builders and no longer have to pay them dole money. They obtain cheap housing and so no longer have to pay inflated prices to landlords for social housing. Buying existing houses creates no new housing or other benefits. Its simply transfers money from one group to another with nothing being produced.

Since it is such a bad idea, I expect them to embrace it.

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The only saving grace is that there's no chance of anything happening before the Autumn Statement. Hopefully by then even the most Krusty-brainwashed sheeple will have realised that it is not the lack of mortgages that is causing house prices to fall, they are falling of their own accord. Therefore, only complete imbeciles will want to buy in Autumn and the take-up of 'new' mortgages should be minimal.

Had HMG injected funds by now, I dare say HPI would troop on up regardless.

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If central banks were to directly fund mortgages then they would be creating inflation more rapidly than inflation is already being created. Same goes for any unfunded bailout that does not come from the pockets of those who already have money - for example taxpayers.

Before a none inflationary unfunded bailout is possible there has to be a simultaneous deflationary collapse. But if you get a deflationary collapse it can be next to impossible to stop it - hence as deflationary pressures mount there is already inflationary funding in play. Generally as soon as you think you can solve problems with unfunded bailouts you are on the way to Zimbabwe.

So here we are. There aint much that can be done at the moment.

Meanwhile Northern rock has high interest rates - which creates deflationary pressure and is encouraging its borrowers to move to other banks. Soon they will be profitable and able to produce more loans! :-)

There is nothing to see here folks! Nothing. No worries at all. If you just remain calm and dont panic it will all work out fine.

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The only saving grace is that there's no chance of anything happening before the Autumn Statement. Hopefully by then even the most Krusty-brainwashed sheeple will have realised that it is not the lack of mortgages that is causing house prices to fall, they are falling of their own accord. Therefore, only complete imbeciles will want to buy in Autumn and the take-up of 'new' mortgages should be minimal.

Had HMG injected funds by now, I dare say HPI would troop on up regardless.

Last years statement was 9 October

Assuming similar this year, then by the time of the statement the autumn house selling season, which is when I think reality will set in for sellers, will be in full swing.

Also, it will probably take ages to set up even after an announcement

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Last years statement was 9 October

Assuming similar this year, then by the time of the statement the autumn house selling season, which is when I think reality will set in for sellers, will be in full swing.

Also, it will probably take ages to set up even after an announcement

....the spring house selling season has yet to start..... <_<

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government/BOE has unlimited money to lend if need be. Look at Weimar, look at Zimbabwe if you need the money you can always print a little faster in larger denominations.

The demand for the money would also have to be there though. The banks might get the proposed extended BoE facilities or huge mortgage guarantees some are calling for, but by my way of thinking the demand still won't be there, at least not from the all important FTB in any significant number.

It would also create an artificial market, and with a few exceptions, the market will fully understand that and fear it - it already does. It could cause the crash to be slightly prolonged but it can not be stopped. It has to play out.

To use an extended BoE facility to stabilise the property market at current high price levels would surely require a fully concerted effort by almost all of the banks/building societies/lenders, which does not seem probable.

If I ran an bank, my lending would go in to better opportunities elsewhere in the world than in to some propped-up artificial market which has had more than its run, at such price levels, with so much downside risk attached. I'd be more likely to watch my competitors try and tow a Government line, and then snap up their juiciest assets when they later fail.

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  • 401 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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