Monday, Mar 25, 2013

UK - The people bank

Moneyweek: George Osborne goes ‘all in’

We already knew that we were bank guarantors, pretty soon we’ll be guarantors on sub-prime housing too. All I can say is long live zero interest rates… because without them, we’ll be asked to make good on those guarantees!

Posted by happy mondays @ 02:50 PM (2519 views)
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13 Comments

1. hpwatcher said...

Very clear now that the worlds central banks, together with fools like George Osborne, actively want another financial crisis.

The previous one simply wasn't big enough for them; they want more debt, more destruction of money - going for broke.

Monday, March 25, 2013 03:28PM Report Comment
 

2. Greenbay said...

Hi Guys,

Not been here for a while, for all those that remember me will also remember my statements that government intervention would prevent such a property market collapse most were expecting.
I must admit im suprised at the measures taken to ensure this does not happen, but assume most people that labelled my comments as daft are now eating a bit of humble pie........

Monday, March 25, 2013 03:31PM Report Comment
 

3. reticent said...

Moneyweek just went bullish on property. Whatever next?

I'm annoyed to admit that I largely agree with their reasoning.

For my own part, Osborne's announcement couldn't come at a worse time. If I don't buy now, I will have to wait 3 years as my wife is about to become self-employed. The economics of renting over buying only pay off if prices continue stagnating. What I can afford right now would be a pretty hideous compromise relative to what I could afford in 3 years' time, if prices continued their current trajectory.

There are so many variables to consider that it makes the whole thing nauseating. On the one hand, Basel 3 will countermand the mortgage indemnity guarantee as soon as it ends in 2017 (assuming a newly-elected labour don't end it, which I'd sincerely doubt) and the next generation will have 50k in debt whereas I will have amassed a 20% deposit. On the other hand, Carney may have succeeded in putting homeownership out of the reach of unassisted FTBs by then. I'm told he managed as much in Canada long ago. Add to that the fact that the taxpayer will be all-in by then and it all starts to look really depressing.

Suddenly every worst-case scenario has become a lot more likely and I have no idea what to do with what little savings I have. The last thing I want to do is buy in to such a rigged market, but it seems like it's only going to get a lot more rigged come january.

Monday, March 25, 2013 06:30PM Report Comment
 

4. timmy t said...

Reticent - if it's any consolation, which I doubt, you're not on your own! In 2007 I felt very clever not buying - not feeling so clever now. On the one hand I catch myself looking at Rightmove seeing what ridiculous houses I could buy, and then I think about how stupid I would feel if the crash that SHOULD happen, does happen.

Monday, March 25, 2013 08:17PM Report Comment
 

5. alan said...

The Banks and the elite are playing a clever game. Mr Joe Public hasn't a clue what's going on and that's the way they like it.

On the contrary, there are so many distractions put in the way of the ordinary guy that it's easier to just sit it out and let the wife have the TV controller - even if it is Strictly Come Dancing.....

Monday, March 25, 2013 09:03PM Report Comment
 

6. stillthinking said...

The UK government is already on the line for this anyway, due to their bank guarantees. If some BTL goes bust the government is obliged to step in, and now, if the bust BTL gets out courtesy of some first timer, then the government extends the guarantee.

This is just an attempt to get the worst of the BTLs out of the market. We all know a BTL who bought 6 properties, that guy can't make good, no hope. Shift the debt onto 5 ftbs and you have a chance of repayment. Bad deal for the FTBs though.

The difference I would think is that ideally you want to guarantee the debts of people with thirty years of working age ahead of them. The government must realise that debt is principally held by those on the wrong side of mid-way through working age, and want to shift it down a bit. Being without a home and unable to buy also means being without a mortgage, footloose and fancy free (bar those credit card debts).

Tuesday, March 26, 2013 04:01AM Report Comment
 

7. a saver said...

Guys I just heard this morning that the e-petition to limit Bulgarian and Romanina immigration is being considered. I have pasted the email in below.
I am going to find out what other actions, e-petitions etc are underway. There needs to be one to stop the funding for lending scheme and one to implement measures to get the builders building -eg via tax breaks based on the number of houses they build.
What do you think?

The e-petition 'Stop mass immigration from Bulgarian and Romanians in 2014, when EU restrictions on immigration are relaxed.' signed by you recently reached 140,058 signatures and a response has been made to it.
This e-petition has passed 100 000 signatures and has been passed to the Backbench Business Committee to consider for debate. The Committee have allocated a debate in Westminster Hall on 22 April 2013 from 16:30 to 19:30. Further information about the debate, and the work of the Backbench Business Committee can be found at www.parliament.uk/bbcom The Home Office have provided the following Government response to the petition: When the coalition government was formed we made a clear promise to the British public that, after thirteen years of uncontrolled mass immigration, this government would reduce and control immigration. Latest statistics show that the tough policy changes we have made are working. Net migration has fallen by almost a third since June 2010 and our visa statistics indicate that this trend is set to continue. Just under a third of the people coming to the United Kingdom are from the EU, while 55% are from outside the EU. About 14% are British citizens returning home. The bulk of our net migration, therefore, is from outside the EU. The right to free movement offers substantial benefits to EU citizens, and these advantages are also enjoyed by a great number of British nationals. Around 1.4 million UK nationals have exercised their free movement rights to live in another EU country. In terms of European immigration, we have made clear that we will always apply transitional controls on new EU member states. In 2011 we extended controls on Bulgarian and Romanian migration until the end of 2013, the latest date allowed by the Accession Treaties, under which these two countries joined the EU. Continuing the controls beyond the end of this year is not possible because of the terms of the Accession Treaties agreed under the previous Government. Eight other EU Member States imposed similar transitional controls which will expire at the same time: Austria, Belgium, France, Germany, Luxembourg, Malta, Netherlands, and Spain. Free movement rights are not unlimited. Any stay beyond the initial three months is limited to those exercising Treaty rights as a worker, student, self-employed or self-sufficient person. Those who are not working or seeking work in the UK are required to have sufficient resources to support themselves and their families to avoid becoming a burden on the social assistance scheme, and are required to have comprehensive medical insurance. The Government is clear that EU citizens who benefit from the right to free movement must adhere to the responsibilities this brings with it and abide by our laws. If an EU national does not meet one of the requirements set out in the Directive then they will not have a right to reside in the UK and may be liable for removal. A cross-government ministerial group is currently reviewing the arrangements for controlling all foreign nationals’ access to benefits and public services.
View the response to the e-petition
Thanks,
HM Government e-petitions http://epetitions.direct.gov.uk/

Tuesday, March 26, 2013 07:41AM Report Comment
 

8. happy mondays said...

Funny a saver i have been looking out for some sort of protest about FFL & now HFH, Surely anyone with any ounce of sanity knows the tax payer cannot under right these mortgages.. & for now with economics as they are & financial pressure on people, limiting immigration probably not a bad thing for now..

Tuesday, March 26, 2013 08:14AM Report Comment
 

9. a saver said...

HI, happy mondays, glad someone else is on HPC is interested. I have been galvanized into a bit of action since the stunning Budget news, trying to figure out whether we can derive any crumbs of comfort. Eg will people rush to put their existing houses on the market because they can get an unbelievable deal on an overpriced new house? Given that the scheme for existing homes does not start till next year, what effect will this have on prices this year? Actually an IFA told me he thought that a huge number of people will not qualify for these mortgages, despite everything, implying a downward trend for prices-I'd like to believe that's true.
Can't understand why building more houses wouldn't be beneficial.
Campaigners for fair interest rates include Save our Savers, who have been working with Ros Altmann of Saga.
Interest rates surely have to go back up eventually and it's better if they don't suddenly spike. There is talk of the US raising rates this year, so that may have an effect on our economy.

Tuesday, March 26, 2013 09:13AM Report Comment
 

10. Mark Wadsworth said...

ST: "This is just an attempt to get the worst of the BTLs out of the market. We all know a BTL who bought 6 properties, that guy can't make good, no hope. Shift the debt onto 5 ftbs and you have a chance of repayment. Bad deal for the FTBs though."

That's a good point, but this is what underlies everything - load up the next generation with as much private and public debt as possible. They'd only waste it all on iPads and flat screen TVs anyway.

Tuesday, March 26, 2013 09:53AM Report Comment
 

11. happy mondays said...

@a saver, Who knows what the outcome of any of this will be, & i hope many people will not qualify it maybe the best thing to not happen to them! Building houses affordable / social houses will benefit those struggling & would help take the stress out of the market, so that would be not suitable for those that want to keep property prices high ( unfortunately)

What i would like to see is some sort of punishment for those that allowed / turned a blind eye or took advantage of the financial situation, Bankers, corrupt mp's useless mp's, land banking builders the list goes on..

Tuesday, March 26, 2013 11:14AM Report Comment
 

12. G0nzilla said...

I would not worry.

The Government cannot maintain the facade forever. Eventually bond holders will want their ounce of flesh forcing interest rates up that and the bank of England will be forced to print much more funny money forcing inflation through the roof, again leading to higher interest rates. Either way the only way is up. It is just a question of when.

House prices will crash, along with what is left of the financialised economy. At that point we will be laid bare. Those who have savings or investments in sterling will be wied out. Those who hold bricks and mortar will be wiped out. Those who have debts will be wiped out. Does not leave very many options.

Tuesday, March 26, 2013 05:12PM Report Comment
 

13. reticent said...

@3 Alas, 'tis little consolation. I don't really regret anything as I've never really had enough of a deposit to be doing anything but gambling. It is lamentable to think that if I had used my 5% back in 2009, I probably could have bought at 250k. Everyone I know who did that has already made about 100k.

@6 I think a petition is a good idea. It seems likely to garner 100,000 signatures with the press and EAs all against this proposal. If nothing else it might convince Labour that there is enough public opposition to attack the coalition over it.

Tuesday, March 26, 2013 06:08PM Report Comment
 

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