Editor's Blog0 min ago
Mortgage Aid: Handouts To The Rich?
// Affluent house hunters have been contacting estate agents in some of Britain’s most expensive postcodes to ask how they can benefit from the new state mortgage assistance scheme unveiled in this week’s Budget.
Under the “Help to Buy” programme, buyers will only have to save up a 5 per cent deposit, with the Government underwriting a further 15 per cent of the value as long as the property is worth no more than £600,000.
George Osborne, the Chancellor, said the initiative would help families who “cannot begin to afford” the large deposits currently needed to get a mortgage at a good interest rate.
However, there is nothing to stop high earners from using the multi-billion pound scheme and early anecdotal evidence suggests that it is likely to benefit large numbers of relatively wealthy people.
High-end estate agents reported yesterday that they had already received interest from well-off clients looking to take advantage of the Government’s support to buy houses costing over half a million pounds. //
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Was this an ill thought out policy?
Or was the resulting handouts to the rich intentional and deliberate?
Under the “Help to Buy” programme, buyers will only have to save up a 5 per cent deposit, with the Government underwriting a further 15 per cent of the value as long as the property is worth no more than £600,000.
George Osborne, the Chancellor, said the initiative would help families who “cannot begin to afford” the large deposits currently needed to get a mortgage at a good interest rate.
However, there is nothing to stop high earners from using the multi-billion pound scheme and early anecdotal evidence suggests that it is likely to benefit large numbers of relatively wealthy people.
High-end estate agents reported yesterday that they had already received interest from well-off clients looking to take advantage of the Government’s support to buy houses costing over half a million pounds. //
http://
Was this an ill thought out policy?
Or was the resulting handouts to the rich intentional and deliberate?
Answers
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It is intended for first time buyers and "second-steppers", and it is restricted to new build homes ( although I thought I had read somewhere that there might be some element within this for home improvements - maybe I imagined that).
So, I suppose you can see the logic; Offer help to such individuals so they can buy a house for the first time / move from their existing property into a new build house - this stimulates the mortgate industry and the house building industry.
Its the law of unintended consequences though; The intention is clearly stated as being aimed at first time buyers/ second steppers and new build houses to stimulate a moribund housing economy - but, although £600,000 would not buy you a mansion in places like London, or Cambridge or the Home Counties,it might in places like Hull, or Lincoln; And whilst it is intended for first time buyers, anyone can qualify for the loan; It may very well be the case then that individuals can qualify, so both a husband and wife for example, if working, could each get help to buy a houses.
So it could be seen as a government subsidy for those well -off people wanting to create their own property portfolio.
And what is the difference between what the government are doing and the Fanny Mac or whatever it was called over in the US that prompted the inplosion of the global financial sector in 2008?
Lastly, such a guarantee serves to drive up the price of housing - the last thing we need is yet another housing bubble, I would have thought....
So, I suppose you can see the logic; Offer help to such individuals so they can buy a house for the first time / move from their existing property into a new build house - this stimulates the mortgate industry and the house building industry.
Its the law of unintended consequences though; The intention is clearly stated as being aimed at first time buyers/ second steppers and new build houses to stimulate a moribund housing economy - but, although £600,000 would not buy you a mansion in places like London, or Cambridge or the Home Counties,it might in places like Hull, or Lincoln; And whilst it is intended for first time buyers, anyone can qualify for the loan; It may very well be the case then that individuals can qualify, so both a husband and wife for example, if working, could each get help to buy a houses.
So it could be seen as a government subsidy for those well -off people wanting to create their own property portfolio.
And what is the difference between what the government are doing and the Fanny Mac or whatever it was called over in the US that prompted the inplosion of the global financial sector in 2008?
Lastly, such a guarantee serves to drive up the price of housing - the last thing we need is yet another housing bubble, I would have thought....
"Labour Scaremongering"? How?
There are genuine questions to be asked here, and it is the oppositions job to ask those questions,especially when policy is rolled out on the hoof that has clearly not fully been thought through.
How is this scheme different from the US FNMA ( Fanny Mae) scheme, which prompted the global financial collapse of 2008?
Should the state really be subsidising well off couples to buy second homes, or start a property portfolio? Is that the best use of scarce government funds, especially when you are cutting the benefits of disabled, and taxing them for having spare rooms?
Should the government be sponsoring a housing boom with a likely surge in house prices?
These are all valid questions, the government does not yet have the answers, and it is therefore hardly "Labour scaremongering" to ask them.
There are genuine questions to be asked here, and it is the oppositions job to ask those questions,especially when policy is rolled out on the hoof that has clearly not fully been thought through.
How is this scheme different from the US FNMA ( Fanny Mae) scheme, which prompted the global financial collapse of 2008?
Should the state really be subsidising well off couples to buy second homes, or start a property portfolio? Is that the best use of scarce government funds, especially when you are cutting the benefits of disabled, and taxing them for having spare rooms?
Should the government be sponsoring a housing boom with a likely surge in house prices?
These are all valid questions, the government does not yet have the answers, and it is therefore hardly "Labour scaremongering" to ask them.
LazyGun
\\\\How is this scheme different from the US FNMA ( Fanny Mae) scheme, which prompted the global financial collapse of 2008?\\\
Good point.
\\\Should the state really be subsidising well off couples to buy second homes, or start a property portfolio?\\
I had the impression that it wasn't for the "well off couples" I thought that it was for couples who couldn't afford a mortgage.
\\ Is that the best use of scarce government funds, especially when you are cutting the benefits of disabled, and taxing them for having spare rooms? \\
I have no idea, but Labour is wanting a "kick start" to the economy, so I would have thought that this would have been a boost to the economy....welcomed by Labour who's housing building projects over 10years was nothing to be proud of.
\\Should the government be sponsoring a housing boom with a likely surge in house prices?\\
Who knows what will happen to the housing prices........I don't.
\\\\How is this scheme different from the US FNMA ( Fanny Mae) scheme, which prompted the global financial collapse of 2008?\\\
Good point.
\\\Should the state really be subsidising well off couples to buy second homes, or start a property portfolio?\\
I had the impression that it wasn't for the "well off couples" I thought that it was for couples who couldn't afford a mortgage.
\\ Is that the best use of scarce government funds, especially when you are cutting the benefits of disabled, and taxing them for having spare rooms? \\
I have no idea, but Labour is wanting a "kick start" to the economy, so I would have thought that this would have been a boost to the economy....welcomed by Labour who's housing building projects over 10years was nothing to be proud of.
\\Should the government be sponsoring a housing boom with a likely surge in house prices?\\
Who knows what will happen to the housing prices........I don't.
I disagree. The wealthy can look after themselves. A measure designed to help the less well off and the first time buyers is not in itself a bad thing, but I do not think, in an age of austerity, that it is the responsibility of the state to be subsidising the rich to move home, or to add to their property portfolio.
So it just smacks of a hastily assembled crowd pleasing measure to drop into the budget, with little thought for what might be the unintended consequences, like state underwritten loans a la fanny mae in the US back in 2008, or house price inflation , or allowing the wealthy to be underwritten by the taxpayer....
So it just smacks of a hastily assembled crowd pleasing measure to drop into the budget, with little thought for what might be the unintended consequences, like state underwritten loans a la fanny mae in the US back in 2008, or house price inflation , or allowing the wealthy to be underwritten by the taxpayer....
LazyGun
\\\So it just smacks of a hastily assembled crowd pleasing measure to drop into the budget, with little thought for what might be the unintended consequences, like state underwritten loans a la fanny mae in the US back in 2008, or house price inflation , or allowing the wealthy to be underwritten by the taxpayer....\\\
You have said all that once........you are just repeating yourself........;-)
\\\So it just smacks of a hastily assembled crowd pleasing measure to drop into the budget, with little thought for what might be the unintended consequences, like state underwritten loans a la fanny mae in the US back in 2008, or house price inflation , or allowing the wealthy to be underwritten by the taxpayer....\\\
You have said all that once........you are just repeating yourself........;-)
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