Taxpayer to take on mortgage risks of first-time buyers

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts
  • John Wright
    Full Member
    • Mar 2007
    • 705

    #16
    Originally posted by Lateralthinking1 View Post
    Taxpayers will underwrite mortgages totalling hundreds of millions of pounds under plans to “unblock” the housing market and revive the flagging economy. The mortgage guarantee will result in lenders providing loans with significantly lower deposits than the 20 per cent or more that is typically demanded. ........ Defenders of the scheme argue that it is different because plenty of people can afford mortgages but not the deposit.
    Hmmm, but all the repossessions that occur are because the people, who have successfully paid the deposit, now can't afford the regular payments.

    And that will get worse when interest rates rise.....
    - - -

    John W

    Comment

    • ahinton
      Full Member
      • Nov 2010
      • 16122

      #17
      Originally posted by Serial_Apologist View Post
      I normally look to your contributions for logical consistency, ahinton, but I don't find it here. Is it not the case that it was when left to themselves that the banks prioritised their own greed over their social responsibility? And if that is indeed the case, who would have been best placed to, er, persuade them to change their ways?
      Thank you for your faith in what I try to put forward as best I can. Yes, when left to themselves, the banks did tend to prioritise their own greed, but now that at least some of them are part-owned by the taxpayer, that seems to me to have changed no more than I would have expected it to do; furthermore, when constrained by tough governmental interference (if and when the old boy network actually allows that to happen to any extent), they'll not only be able even more effectively to duck out of any social responsibility that they might other have had or have been expected to have but they'll also be able to blame the government of the day for the fact that their hands are tied - and, of course, they'll do just that!

      Originally posted by Serial_Apologist View Post
      Ah - so you're winding us all up. Sorry, must have been me having a temporary sense of humour hiatus.
      Nope. Each transaction means that someone gets something therefore someone else loses something as a direct consquence of that gain. There's no wind-up of any kind here (unless in be in the fact itself). A gets a pension therefore B doesn't. A gets paid for doing a job (if he or she's lucky enough not only to get the job but to be able to depend to be paid for doing it with reasonable consistency) therefore B doesn't. Simples. Uncomfortable and upleasant, but simples nonetheless. As I say - no wind-up.

      Comment

      • ahinton
        Full Member
        • Nov 2010
        • 16122

        #18
        Originally posted by amateur51 View Post
        Well as I understand it, Darling's sale window ends in 2013 - it would be good to know why Gideon thinks now is such a propitious time to sell - or did he think that Branson's offer was too good to resist (ahem!).
        That's correct - and the general thinking now (and I imagine that Gideon subscribes thereto) is that the taxpayer would get a lot less the more the sale were to be postp[oned within what remains of that timescale.

        Originally posted by amateur51 View Post
        The local authority schemes worked well-enough post-war and in SuperMac's house-building boom and you build a sinking fund for repairs into the rents. A house-building programme would be a fine Keynesian work-creation scheme too. Not one council house was ever built in Britain without recourse to some private money.
        That's all true as well, but when the private money supply begins to dwindle and looks to be less and less dependable, such schemes look ever more unworkable. In the decade and a half or so following the end of WWII, levels of state benefits (uncluding state pensions) were nothing like as high proportionately as they have been in more recent times, but the tax, social charges, benefits and government allocation systems are all vastly more complex now than they were then, so those kinds of relatively simple post-WWII operations would be inconceivable nowadays; futhermore, the demands, expectations and tolerances of everyone, from the poorest to the richest of the electorate - as well as the government of the day of whichever political hue or none - are all immeasureably greater than they were in those days.

        Comment

        • PhilipT
          Full Member
          • May 2011
          • 423

          #19
          Originally posted by ahinton View Post
          Nope. Each transaction means that someone gets something therefore someone else loses something as a direct consquence of that gain.
          No. If that were true, there'd be no point in money, since no-one would want to exchange it for anything else, not even their labour. Exchange, and shops, and markets, and trade, work because the value to each of what the other provides is greater than what he gives in exchange. At this point I really, really want a whiteboard so I can draw a pair of supply and demand curves and explain the significance of the areas of the triangles above and below the price line to the left of the crossing point ...
          Last edited by PhilipT; 22-11-11, 12:19. Reason: Caffeine-deprived typo #2

          Comment

          • Lateralthinking1

            #20
            So Ed Balls would have gone further. Another reminder that what we have just witnessed in Spain, albeit in reverse, is now a fact of "democracy" across Western Europe. You can have it fast or slow. You can have more or less of it. You can't have anything different. It has to be it. I find that with these proposals I am left with a lot of questions.

            When there are over 900,000 empty homes, the proposal to build 16,000 new ones looks very modest. Are they needed? Would they not have been built anyway? Is there a guarantee that they will be small affordable properties? Will at the very most they help out on the margins but have a detrimental impact on the countryside that far outweighs any advantages?

            There are 32,000 jobs in it. Again, is this not a very modest figure? Are construction workers suffering more from unemployment than others? I doubt it. How many administrative jobs will it provide? Could we have some figures from the Government on the numbers of people in each employment category who are unemployed?

            There are many parts to the proposal. Would it be reasonable to suggest that there should be a legal mechanism for reducing the incomes of senior managers in the relevant companies to compensate for the reduced level of risk carried by them?

            If we are going to have the special arrangements, why should they only apply to New Build?

            Let us say that some of the people who subsequently default on their mortgages do so because of further cuts in the public sector. Wouldn't the taxpayer picking up the bill in such circumstances be somewhat ironic?

            The increase in the amount being offered to council tenants to buy their own homes is about the amount of one year's average salary. As well as reducing the housing stock, is this not going to encourage people on the borderline of being able to pay to get into difficulty? Last time, some ended up in the courts when their monthly mortgage payments shot up from £200 to £650.

            Why should people in their thirties who are unable to get on the property ladder subsidise others to the tune of over £50,000 to buy properties? Why should anyone? My father grew up in council houses. We didn't have holidays for over ten years so that the mortgage could be paid, he didn't have a car until the age of 38 and has never had a new car, that is in 80 years.

            In percentage terms, what do forum members expect their properties to be worth compared to now - in 3,5 and 10 years time?

            Comment

            • amateur51

              #21
              Originally posted by Lateralthinking1 View Post

              When there are over 900,000 empty homes, the proposal to build 16,000 new ones looks very modest. Are they needed? Would they not have been built anyway? Is there a guarantee that they will be small affordable properties? Will at the very most they help out on the margins but have a detrimental impact on the countryside that far outweighs any advantages?
              That doesn't tell you much of wehat you'd want to know. What sort of homes? Above shops? In need of lots of rehab? In dodgy areas? Under the motorway? Not a useful 'fact' per se. How do they fit the demographics of housing need?

              Originally posted by Lateralthinking1 View Post
              Why should people in their thirties who are unable to get on the property ladder subsidise others to the tune of over £50,000 to buy properties? Why should anyone? My father grew up in council houses. We didn't have holidays for over ten years so that the mortgage could be paid, he didn't have a car until the age of 38 and has never had a new car, that is in 80 years.
              There was a lot of agitation a few years back for subsidised housing for 'key workers' (nurses, fire officers, teachers etc) and I'm sure that the need hasn't gone away. There is a huge need for a wide range high volume building programme in certain parts of the country but the land there is expensive and/or green field and/or on flood plains. We don't need to come up with answers here - The National Housing Federation (RSLs/Housing Assocs) has masses of expertise in these areas.

              Comment

              • ahinton
                Full Member
                • Nov 2010
                • 16122

                #22
                Originally posted by PhilipT View Post
                No. It that were true, there's be no point in money, since no-one would want to exchange it for anything else, not even their labour. Exchange, and shops, and markets, and trade, work because the value to each of what the other provides is greater than what he gives in exchange. At this point I really, really want a whiteboard so I can draw a pair of supply and demand curves and explain the significance of the areas of the triangles above and below the price line to the left of the crossing point ...
                I don't think that you quite understood what I meant; whist the trading examples that you mention might at times be to the advantage of both trader and customer, someone else will still lose out. Try arguing the case for VAT as we understanding it on those terms! The expression "robbing Peter to pay Paul" is hardly meaningless, after all. And there are now some who are indeed beginning to question the very point of money (not that I'm one of them).

                Comment

                • Flosshilde
                  Full Member
                  • Nov 2010
                  • 7988

                  #23
                  Originally posted by Lateralthinking1 View Post
                  Why should people in their thirties who are unable to get on the property ladder ...
                  But why should people in their 30s expect to 'get on the property ladder'? In most Europen countries, & also the major USA cities, people expect to rent. Why are we in the UK so sold on the idea of property ownership? especially when we are told, from Tebbit onwards, that we can't expect a job for life & should expect to move frequently to find work - owning your home makes that so much more difficult.

                  Comment

                  • amateur51

                    #24
                    Originally posted by Flosshilde View Post
                    But why should people in their 30s expect to 'get on the property ladder'? In most Europen countries, & also the major USA cities, people expect to rent. Why are we in the UK so sold on the idea of property ownership? especially when we are told, from Tebbit onwards, that we can't expect a job for life & should expect to move frequently to find work - owning your home makes that so much more difficult.
                    You've put your finger on it - bravo Flossie! It's utter madness - Thatcher started it and Blair was caught in the headlights (I doubt that he was ever very interested in housing other than his own and his offspring's).

                    Comment

                    • Lateralthinking1

                      #25
                      This is possibly true. I have no income but I have left to pay on a mortgage perhaps 35% of the current value of my property. I don't have any offspring. My logical position would be to say to those with aspirations what the millionaires say to us as earlier advances are stolen. Sorry - times are tough and things have changed. Work harder. Get 25 jobs.

                      However, my instinct is to feel that it isn't right that I have had benefits that they are not getting. This is no different from feeling that it isn't right that the much better off are taking things away from me and many others. I'm not saying that home ownership is the be all and end all or even that it is better. That is a mindset.

                      But the end of so-called upward mobility - in fact a very acute reversal - affects the types of people who were once in my family, including me. I find for that reason that I take the diminishing of options rather personally irrespective of what home ownership means in practice. It symbolises, along with other things, the very opposite direction of what I would have expected of a decent society. Perhaps genuinely I should mind my own business and identify with it less.

                      Comment

                      • Flosshilde
                        Full Member
                        • Nov 2010
                        • 7988

                        #26
                        Perhaps the fetishisation of home ownership is tied up with such expressions as 'An Englishman's home is his castle', & the past restriction of the franchise to property owners.

                        Comment

                        • Serial_Apologist
                          Full Member
                          • Dec 2010
                          • 37639

                          #28
                          Originally posted by Lateralthinking1 View Post
                          This is possibly true. I have no income but I have left to pay on a mortgage perhaps 35% of the current value of my property. I don't have any offspring. My logical position would be to say to those with aspirations what the millionaires say to us as earlier advances are stolen. Sorry - times are tough and things have changed. Work harder. Get 25 jobs.

                          However, my instinct is to feel that it isn't right that I have had benefits that they are not getting. This is no different from feeling that it isn't right that the much better off are taking things away from me and many others. I'm not saying that home ownership is the be all and end all or even that it is better. That is a mindset.

                          But the end of so-called upward mobility - in fact a very acute reversal - affects the types of people who were once in my family, including me. I find for that reason that I take the diminishing of options rather personally irrespective of what home ownership means in practice. It symbolises, along with other things, the very opposite direction of what I would have expected of a decent society. Perhaps genuinely I should mind my own business and identify with it less.
                          This too, is understandable politically. That said, it was stated yesterday (on The World At One, iirc) that private rents are now higher than average mortgages in many parts of London. The fact is private landlords - many letting out premises in unfit states - cannot unlike local authorities (in theory) be made politically acountable at elections - which is why council housing has to be the way forward.

                          Comment

                          • Lateralthinking1

                            #29
                            I don't think we disagree. I think there should be more council housing, not less as is being proposed. We might start by taking a look at the 900,000 plus empty properties. My argument is one about maximising options for as many people as possible.

                            Comment

                            • teamsaint
                              Full Member
                              • Nov 2010
                              • 25203

                              #30
                              Originally posted by Flosshilde View Post
                              Perhaps the fetishisation of home ownership is tied up with such expressions as 'An Englishman's home is his castle', & the past restriction of the franchise to property owners.
                              when I see the rich choosing tenancy as their preferred method of home ownership, I will know its a good ides.

                              Till then , I will stick with what my wifes' grandfather said, who rented all his life....."i have paid for this house 10 times over".

                              I am currently paying £4000 a year for each of my kids to rent 1 room each. Not funny.

                              House ownership is a perfectly good model, its only artificially high land prices that mess it up for ordinary people.

                              Rich people.........give up your homes and rent, if its such a great idea !!

                              (oh, and I am far from a thatcherite !)
                              I will not be pushed, filed, stamped, indexed, briefed, debriefed or numbered. My life is my own.

                              I am not a number, I am a free man.

                              Comment

                              Working...
                              X