Tuesday, August 6, 2013

Escape form Osborne

Treasury officials seek an exit from Help to Buy scheme

While Osborne concocts an electioneering scheme by pledging public money to the housing market, the Treasury is trying to find a way to gracefully exit Help to Buy. Apparently, selling the debt to insurance cmpanies is one of the options being considered. The scheme is absolutely crackers and I am beginning to suspect that it will have such momentum that it will be become unstoppable like the US Government Sponsored Entities: Fannie Mae and Freddie Mac.

Posted by quiet guy @ 09:42 AM (2234 views)
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12 thoughts on “Escape form Osborne

  • mark wadsworth says:

    Clearly, Osborne’s gamble to is to stoke a bubble in the lead up to the 2015 GE, fair enough.

    But there is many a slip twixt cup and lip. If it were that easy to stoke and sustain a house price bubble and be re-elected again and again and again then every country would be a single party state by now. Labour came a cropper over this when they dropped the ball, despite their best efforts and who’s to say that the Tories are better at rigging the markets than Labour?

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  • strange then that tories won the general election in 1992 I think when rates were well over 10%

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  • it was all about BIG announcements –

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  • mark wadsworth says:

    Taffee, yes, 1992 is the exception that proves the rule, it was more a case of Labour losing that election than the Tories winning.

    I refer you also to this chart.

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  • I think Labour lost the 1992 election more than the Tories won it. Kinnock spooked the electorate with his Sheffield rally just days before polling day and the Labour party probably faced the most hostile national press it’s ever faced at the time… remember the Sun headline – Will the last person to leave Britain turn out the lights – on polling day?

    As for interest rates, your are correct, the BoE base rate at the time of the election was 10 per cent, but it had come down from a high of 15 per cent in late 1989, so there was a sense that things were improving.

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  • mark wadsworth says:

    And at the time, 10% interest rates were high, but only a couple of per cent higher than what we were used to at the time.

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  • I haven’t heard anyone saying they think this scheme is a good idea.
    Despite being a homeowner now I don’t want prices to rise as I’d like to buy a bigger family home in the future.
    I think you also need to question lending to people for upto a £600k property who haven’t managed to save anymore than 5% of that value (£30k).
    What kind of education do you actually get at Eton ?

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  • I have a feeling our mini boom is part of an election strategy, but it will also encompass floating off the public holding of some of the banks as well. I wonder just how related these issues are and are behind the recent senior management shakeups. G1de0n really is quite the operator, but as MW so aptly put this is a risking strategy as he tries to sup the drink he has just so deftly mixed.

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  • I recently met a couple who did the scheme. They said they did not have a deposit because they had blown it all on holidays. I have avoided holidays to save for a deposit and they can gazump me.

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  • @ libertas

    Live now and die later. Or live later and die now.

    Find a way for you, not what others would have you do.

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  • Dill, are you saying I should have gone on holiday?!

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  • @ libertas

    You need a break, yes.

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