Friday, January 16, 2009

Brown to pledge £1/5 Bn to housing assocations for rent back schemes

Brown to Pledge 200 Million Pounds to Limit Home Repossessions

Prime Minister Gordon Brown’s government today will pledge 200 million pounds ($292 million) to help keep property owners who face repossession in England from losing their homes. The money will be handed to housing associations, which will have the power to buy stakes in primary residences and then rent them back, the Department of Communities and Local Government said in a statement. Only people earning less than 60,000 pounds a year will qualify for the program. Brown is attempting to ease the impact on voters of Britain’s first recession since 1991. Repossessions will almost double to 75,000 this year as property prices fall and banks rein in lending, the Council of Mortgage Lenders estimates. “We are determined to do everything possible to ensure that repossession is always a last

Posted by 51ck-6-51x @ 12:31 PM (897 views)
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6 thoughts on “Brown to pledge £1/5 Bn to housing assocations for rent back schemes

  • I suspect aside from good press the government is doing this is because it has no means to manage the explosion in council housing waiting lists if reposessions go into overdrive.

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  • Private home ownership IS becoming a thing of the past. Mentioned this a while back and it is now slowly unfolding. Only the rich will be able to buy in the future as banks won’t lend to the middle class and lower class. Prices are so high, even if they dropped 30%, the less well off will never own a home due to cash restrictions. Instead of the government building homes, they’ll buy yours and make less available for private ownership.

    Here’s a classic example of destroying private home ownership:

    Linda Worrall has lived in Rhiwlas Street for 12 years and is one of the ‘minority’ of residents who wants to stay in her 125-year-old home. As a home owner Ms Worrall is concerned that the local authority is offering around £62,000 for properties in the Welsh streets, but plans to sell the homes it will replace them with for around £120,000.

    At 56 years old, persuading a bank to give her a mortgage of £58,000 will prove a very tall order. For those who, like administration worker Ms Worrall, cannot raise enough from the sale of their existing properties to buy one of the planned new homes the local authority is offering a part-ownership scheme. Others, whose homes are still owned by the council or a housing association, are being offered alternative accommodation elsewhere in the city.

    Ms Worrall said, ‘I can’t get a mortgage because I’ve only got three years left in work and you can’t get anything in the city for the price we’re being offered for this house. We’ll just have to go into debt. I don’t want to go into council accommodation because why should I pay them rent when I’ve got a house that I don’t need to pay for?’

    http://www.walesonline.co.uk/tm_objectid=16159775&method=full&siteid=50082&headline=farewell-liverpool-s-welsh-streets-name_page.html

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  • That’s enough to buy somewhere between 1,000 and 1,500 houses depending on the average price.

    There are maybe 25 million houses in the UK. 1,500 houses represents 0.006% of this.

    And compare 200 million quid to the 15 billion dollars Merrill Lynch lost in Q4 2008.

    It’s like sending a canoe to rescue the Titanic!

    Or maybe more like sending the Titanic to rescue an iceberg!

    Political nonsense, which will create nothing more than embarrassed political historians.

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  • That’s enough to buy somewhere between 1,000 and 1,500 houses depending on the average price.

    There are maybe 25 million houses in the UK. 1,500 houses represents 0.006% of this.

    And compare 200 million quid to the 15 billion dollars Merrill Lynch lost in Q4 2008.

    It’s like sending a canoe to rescue the Titanic!

    Or maybe more like sending the Titanic to rescue an iceberg!

    Political nonsense, which will create nothing more than embarrassed political historians.

    Reply
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  • The housing associations don’t need to buy the houses – they just need to take on the mortgage (as interest only) for the period in the rent-back agreement. I think the scheme can help more than 1500 in this way.

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  • The waiting lists are already so large for council houses that the prospect of adding another 75,000 (optimistic figure IMHO) of re-possessed is not good news for the government.
    Some people may have been foolish when they borrowed to buy but most would have been re-possessed as a result of loosing their jobs or going on long term sickness. having these people homeless is no solution to the crisis.
    At the same time, bank lending practice need tightening urgently: no interest only mortgage, no 30 years or more mortgage.even variable mortgages are questionable. We should look at what the continent does.

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