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Wait Until You See Tomorrow's Observer


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indeed the more one thinks about it, the more one can't wait to see the devil in the detail.

Sledge,

You and I both know this has as much chance of coming to fruition as me flying to the moon.

Its all just so much hot air, drivel, smoke and mirrors, food for the masses, nod and a wink to the boys at the bank, dodge the issue, lip service, its all different this time.....boll!x....but lets imagine for one second it is -

so this is what Tony meant by no more boom and bust....the taxpayer bails out the speculator? Interesting and perhaps slightly bonkers.

and all this is going to happen in time?......didnt they say they'd fix the trains back in 1997? Well its ONLY took them 8 years and the trains are, well, you know, not really quite tickety boo yet.

its a crazy crazy world.

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The significant points from this news:

1) Gordon Brown acknowledges that housing market is screwed

About time as well, that loser <_<

2) This scheme is totally unworkable.

Mortgage debt has been going up at approximately 10-15 billion A MONTH for some time now. If 40% of the market are to be FTBers, then they will have to contribute approximately 4-6 billion pounds.

This leaves HMG to come with 2-3 billion a month to lend to FTBers.

Or, 24-36 billion quid a year.

24-36 billion quid a year!!!

Hmm, maybe Gordon.

3) People are going to smell a rat now, surely. You borrow x from the bank, and y from the government - how the hell are you going to be able to pay off one, let alone both?

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BEAR in mind guys that Ireland has had years and years of HPI growth to embarrass even the uk market... and guess what... no crash!!!

5 words: 2 per cent interest rates. If you think the UK is EVER going to have 2% interest rates in the next 15 years (bear in mind that the UK has not seen 2% interest rates since before the Second World War) I would definitely like to try whatever drugs it is you are on. And no, Britain is not going to join the euro for the next 5 years at least (Blair and Brown have already ruled it out in this parliament).

This leaves HMG to come with 2-3 billion a month to lend to FTBers.

Or, 24-36 billion quid a year.

24-36 billion quid a year!!!

Good point. This scheme is going to seriously fvck up the government balance sheet. That and the ONS re-classification of PFI initiatives as public sector debt mean much higher taxes.

Edited by zzg113
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i wouldnt even want to listen to any get out fix policies from the people that drove us to the crisis in the first place.

if they didnt see this coming they are hardly in a position to find a way out.

spin spin and more spin and no action that will make a difference. they love this. its by design. make no mistake about it.

otherwise a simple ban on buy to let lending or 80% tax on rental incomes would do it.

-yet they dont.

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Sledge,

You and I both know this has as much chance of coming to fruition as me flying to the moon.

Its all just so much hot air, drivel, smoke and mirrors, food for the masses, nod and a wink to the boys at the bank, dodge the issue, lip service, its all different this time.....boll!x....but lets imagine for one second it is -

This policy could back fire on Brown and actually bring the house price crash closer. On Monday morning we should all start to hear the sound of housing chains collapsing as those at the bottom pull out. Why should a couple earning 25k stretch well over what they can afford to buy some overpriced sh*hole costing 120k. With this free money from the government they will be able to buy a much nicer property for 200k.

Problem is they won't realise that by taking the government up on their kind offer they will be doubling their exposure to house price falls in an over priced market. They may save £200 per month on their interest only mortgage but if they sell their 200k pad in a couple of years time and prices have fallen just 10% they will be left with a bill for 20k that they will have to pay off then build a new deposit before they can buy again.

Leveraging the exposure of key workers and FTB to this market to further your own political goals is criminally irresponsible. The housing market will grind to a complete halt until this scheme starts. Prices may be held up o speculation that it will have its desired effect of further inflating the housing bubble and postponing the inevitable crash long enough for new labour to see out this term in government. The questions we need to as are

1. Will this policy need to be approved by parliament

2. Will enough MPs support this for it to go through?

3. How soon could it be implemented?

4. Does this not possibly breech EU law by providing state aid to the building industry

This is a high risk strategy for the government as it risks

1. destabilising the current market yet further

2. Accepting that the current housing market is unsustainable

3. Appearing to come out with half baked policies

This is crunch time for the housing market and this policy may increase the volatility of the market causing the mother of all crashes. B)

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What the reaction of the targeted FTB'ers who would be tempted by this proposed bill will be interesting.

If they are looking to buy soon, they will hold off now.

If they have put in offers, will they withdraw and wait for the 50% deal.

Chains likely to drag on longer or collapse.

All I can see is more short term confusion, they are now publicly admitting there is a serious problem with housing affordability.

When/if this plan comes to fruition the BTL sellers will have a short lifeline to offload at respectable prices, as the FTB only has to raise 50%, so expect an increase in HPI as they can afford to pay more for ther 50% part of the price.

What happens at the boundary between the 50% and 100% markets will be interesting.

Just sounds like a crazy plan, using public money to prop up a market well overdue for a serious correction. The end result will be far worse now...

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I'm stunned.

thought my eyes were decieving me when i saw that headline!!

what next.

desperation of the highest order.

which banks/building societies are going to get involved in this and why? They all know the market is dead and are being careful now with lending and ready to swoop in and reposses on anybody who gets behind on the payments. Where is the upside of involving themselves in a harebrained scheme.

Gordon Brown you are really trying to buy votes. All FTBs are eligible?? -it will end up being mainly public sector workers- they will pass all the complaince tests - guaranteed labour voters at the next election or so GB thinks.

I doubt it will even get off the ground. Any Plc linked with this will get hammered in the stockmarket - they won't like this.

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This policy could back fire on Brown and actually bring the house price crash closer. On Monday morning we should all start to hear the sound of housing chains collapsing as those at the bottom pull out. Why should a couple earning 25k stretch well over what they can afford to buy some overpriced sh*hole costing 120k. With this free money from the government they will be able to buy a much nicer property for 200k.

Problem is they won't realise that by taking the government up on their kind offer they will be doubling their exposure to house price falls in an over priced market. They may save £200 per month on their interest only mortgage but if they sell their 200k pad in a couple of years time and prices have fallen just 10% they will be left with a bill for 20k that they will have to pay off then build a new deposit before they can buy again.

Leveraging the exposure of key workers and FTB to this market to further your own political goals is criminally irresponsible. The housing market will grind to a complete halt until this scheme starts. Prices may be held up o speculation that it will have its desired effect of further inflating the housing bubble and postponing the inevitable crash long enough for new labour to see out this term in government. The questions we need to as are

1. Will this policy need to be approved by parliament

2. Will enough MPs support this for it to go through?

3. How soon could it be implemented?

4. Does this not possibly breech EU law by providing state aid to the building industry

This is a high risk strategy for the government as it risks

1. destabilising the current market yet further

2. Accepting that the current housing market is unsustainable

3. Appearing to come out with half baked policies

This is crunch time for the housing market and this policy may increase the volatility of the market causing the mother of all crashes. 

Just also noticed a possible three year limit to the scheme.. mmmm how long before we get a new government :ph34r:

The Observer said the scheme would affect about 100,000 purchases and cost hundreds of millions of pounds over three years.

What happens after three years does the government stop paying the interest on their half of the loan and pass on the debt to the couple ?

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I agree, the market could come to a complete halt while people work out what's going on.

Thought occurs: could this be the NuLabour's Miras - the final shock which tips it all over the cliff?

More interestingly - is this more than a bit of **** covering but exactly what Brown intends under the very plausible smokescreen of actually trying to help?

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Guest pioneer31

Why is it that everywhere I turn, some f****r is trying to push me down?

First I rack up a Uni debt, not too bad except for the fact that I've so far been unable to secure a job that pays any better than a 5 'O' level type. So 3 years down the toilet for starters.

Now I learn that I shall pay twice for this degree (the debt and the extra years working to retire at 70) BUT I DON'T EARN THE BIG BUCKS THAT COME WITH A SODDING DEGREE!!!!!

and of course property prices are likely to hold even longer as that t**t Brown taxes the hell of out of us and pours it into the market

WHAT THE HELL IS THE POINT IN WORKING ANYMORE IN THIS COUNTRY???

Can ANYONE tell me?

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"The buyers will have to pay rent (prob 3%) on the half they don’t own"

Why 3%?

More like 5-6% (& maybe more), I reckon.

And it will be more expensive than renting outright, by far

I think we could assume the "rent" would be about the same as the interest only part of the governments 100k, so after three years this would be the same as the couple getting a mortgage for the same amount :blink:

In the 200k example the government would help the couple by paying interest only component of 100k for 3 years = £500 / month x 36 = 18k

After three years the couple the government "helped" would effectively be left paying interets on 200k around £1000 per month from their 25k earnings and be safe in the knowledge that they were incentivised to buy at the absolute peak of a house price bubble... Thanks but no thanks Mr Brown

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The government share in the profit.

Take this over the next 25 years and that is a huge huge amount of money going into the coffers of the Government.

Imagine if the Government had 50% of all the HPI over the past seven years.

It appears that the old Communist worm is turning again in the Heads of the Socialists Extremists Called New Labour.

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New Labour = Socialism by stealth.

...... and like all previous Socialist attempts to change the world it will end in an unmitigated disaster that the 'people' will end up having to pay dearly for. And the poorest will be the ones who suffer most .........

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Guest pioneer31

New Labour = stamp down on progress, penalise effort, stifle productivity

Steal from the do'ers and give to the layabouts

And they wonder why people leave Britain in their droves.

This country will always be s**t as long as pleb scum chav lazyarse loving Labour are in power.

Gordon, I hate your guts. I shall look forward to you demise....and you can take that grinning ninny tony with you.

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Is what we are witnessing here an attempt at re-nationalising the social housing stock that Thatcher sold off under RTB?

This scheme is aimed at poorer members of society, not key-workers. It looks to me like the failed Stakeholder Pension scheme that nuLab launched a couple of years ago, what a waste of money that was.

:ph34r:

Edited by Grime- skint wouldbe ftb
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Well, this makes the Australian government's first home owner grant look positively stingy! All we get is a one-off $7000 payment, not half the friggin' mortgage!

http://www.firsthome.gov.au/

The Australian experience with the FHOG is that it simply inflated house prices, and pushed houses further out of reach for FTBs.

It will cost Brown around 18K for each 200k property, on 100,000 purchases the cost would be around 1.8 Billion thats another couple of billion to add to his £10-30 billion black hole.

After three years those couples taking up the offer would be left paying around £1000 per month on 25K, well over twice what they could reasonably be expected to afford.

Brown would be better giving the 18k to improve the pay of key workers over three years so they can buy when house prices crash back down to affordable levels.

Edited by Riser
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"The buyers will have to pay rent (prob 3%) on the half they don’t own"

Why 3%?

More like 5-6% (& maybe more), I reckon.

That isn’t my figure. It’s an ‘official’ one (from the Guardian):

Buyers would pay a 'rent' of no more than 3 per cent on the part they do not own, with the option to buy the whole stake if their fortunes improve
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  • 439 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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