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Yet another Bank Bail Out!
- Thread starter Blasphemous
- Start date
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It's very generous of Dave to underwrite irrisponsible lending on over priced properties with taxpayers money.
Perhaps we need to consider actually building some houses for our ever increasing population.
Perhaps we need to consider actually building some houses for our ever increasing population.
S
Susiejb
....maybe I misunderstood it but I was thinking it sounded like a good idea. It is incredibly difficult for first time buyers to get on the housing ladder, (especially down here in Cornwall where wages are low and house prices high)
I would assume that should they default on the mortgage the government has the equity in the house as a guarantee against the loan.
I would assume that should they default on the mortgage the government has the equity in the house as a guarantee against the loan.
A
Alarm
From what I saw the house developers will fund the greater part.
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Problem is its only for NEW houses thereby ensuring the money supply to Tory Party doners, i.e the Builders. I don't know any first time buyers that can afford a new build.
Well I think it's a very good idea on at least three counts:
1) It gives people with limited savings - which is not the same as limited income - half a chance of buying a house.
2) It provides a bigger market for house builders who will - or at least might - then pay more tax.
3) It provides work for unemployed builders resulting in less benefit and even more tax.
If this looks like win all round then that's because it pretty much is. We keep hearing about the need for 'growth' but what does that mean exactly? Well, to a non-economist like myself, it means making stuff. Not just any old stuff but useful stuff that people need, like houses. Why pay builders to sit at home doing nothing when they could be building houses.
There are a lot of people out there who have few options except to rent. But guess what, the rent often exceeds the cost of a mortgage on an equivalent house! That's hardly surprizing if you think about it. In a free market, landlords will set their rents to match the cost of mortgages - and then add some because they know that not everybody can get a mortgage. (A more benevolent explanation is that they have to cover the cost of the mortgage they used to buy the house then add a bit extra to live off. ) If more people can get mortgages it follows that rents will come down too and that's good news for a whole lot more people, except landlords of course.
Now some will argue that it's not the job of governments to 'subsidize' house buyers and they should leave the whole money lending business to banks. Well they tried that and it didn't work. The banks took our money, which we invested in good faith, and threw huges amounts of it away. Then, as taxpayers, we gave them even more money in the expectation that they would lend it to people who needed it - but they just kept it. Either that or they used it all up paying themselves bonuses.
There's just one thing about this scheme that puzzles me. If it benefits almost everybody except bankers and landlords; and generates real wealth at the expense of money grubbers; how could a Conservative government ever come up with it?
1) It gives people with limited savings - which is not the same as limited income - half a chance of buying a house.
2) It provides a bigger market for house builders who will - or at least might - then pay more tax.
3) It provides work for unemployed builders resulting in less benefit and even more tax.
If this looks like win all round then that's because it pretty much is. We keep hearing about the need for 'growth' but what does that mean exactly?
Well, to a non-economist like myself, it means making stuff. Not just any old stuff but useful stuff that people need, like houses. Why pay builders to sit at home doing nothing when they could be building houses. There are a lot of people out there who have few options except to rent. But guess what, the rent often exceeds the cost of a mortgage on an equivalent house!
That's hardly surprizing if you think about it. In a free market, landlords will set their rents to match the cost of mortgages - and then add some because they know that not everybody can get a mortgage. (A more benevolent explanation is that they have to cover the cost of the mortgage they used to buy the house then add a bit extra to live off. ) If more people can get mortgages it follows that rents will come down too and that's good news for a whole lot more people, except landlords of course. Now some will argue that it's not the job of governments to 'subsidize' house buyers and they should leave the whole money lending business to banks. Well they tried that and it didn't work. The banks took our money, which we invested in good faith, and threw huges amounts of it away.
Then, as taxpayers, we gave them even more money in the expectation that they would lend it to people who needed it - but they just kept it. Either that or they used it all up paying themselves bonuses. There's just one thing about this scheme that puzzles me.
If it benefits almost everybody except bankers and landlords; and generates real wealth at the expense of money grubbers; how could a Conservative government ever come up with it? You wanna try Sussex - makes Cornwall look like Utopia
We are the Dead Centre of EnglandYou wanna try Sussex - makes Cornwall look like Utopia
too bloody right;no chance at all to get on the ladder.
Northen rock is good value as well, do as your told.
If first time buyers can't afford new builds, then government wouldn't be paying anything out. So what's the problem?
S
Susiejb
I don't think its always the case that they can't afford it ... they just can't accumulate the huge deposit now demanded by the lenders.
The alternative ..renting...is often higher than a mortgage.
You wanna try Sussex - makes Cornwall look like Utopia
We are the Dead Centre of England[/quote]too bloody right;no chance at all to get on the ladder.[/quote] Do you get a warm feeling when you drive through the villages past the dozens of EX council houses in beautiful settings
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