Here's another instalment in my occasional series on how the government is doing its best to make sure that the priced out generation stay priced out, with the added bonus that this scheme would also increase taxpayer indebtedness as well as enlarging the power of The State ...
Prime Minister Gordon Brown should buy homes on the verge of repossession to add money to the British economy and save families from being thrown out onto the street, two former Bank of England economists said.
The plan would cost about 50 billion pounds ($76 billion) over five years, Fathom Financial Consulting economists Shamik Dhar and Danny Gabay said in a report today. The program would also provide a new economic policy tool as the central bank’s interest rate approaches zero...
The government should step in and "set a floor" under house prices, protecting taxpayers by paying below-market prices for houses and distressed homeowners by paying more than "vulture purchasers," Fathom said "The average discount will probably be in the region of 10 percent to 20 percent below what asking prices are in the locality for similar properties"...
Going on the dry
1 hour ago
15 comments:
No wonder they were fired (I assume?)
Nah, they are now being paid to provide 'intellectual justification' for what the gummint has been intending to do all along - see instalments 4 and 5 of this series, for example.
Mark, maybe we should set up a Financial Consulting Group so we can release speculative reports etc!
"protecting taxpayers by paying below-market prices for houses"
Another example of how words are given brand new meanings to protect the guilty. Of course if the market won't pay the higher price then it isn't a market price.
Either: "I am losing the will to live - again". Or, "when the revolution comes, up against the wall and bang, bang, bang."
Really, what can one do with these clowns?
Another thought has just occured to me. How did all the old Russian Communist leaders come by their lovely country dachas I wonder?
You think it couldn't happen here?
How they came by them? See your previous comment!
"set a floor" under house prices. At least they are (almost) honest about who they are trying to hurt.
"the priced out generation" ver good, you should trade mark it.
"The average discount will probably be in the region of 10 percent to 20 percent below what asking prices are in the locality for similar properties"...
And that won't be gamed by the local estate agents then. Friends are close to repossession so we al bang our houses on the market at inflated prices and hey presto, house prices start rising.
And these are meant to be the brightest economists Oxbridge can churn out. God help us.
The 'market price' is the price that the transaction takes place at between a willing buyer and willing seller. The moment that the bloody gummint buys a house supposedly below market price, a new lower market price will have been set.
Am I going mad or is it them?
GS, well spotted, I hadn't thought of that.
L, don't worry, it's them :b
As we both know, in the long run there is a 'floor' at around 3.5 times earnings. But we don't need the gummint to decide what the floor 'should' be; the market, if left in peace and quiet, will decide that for itself.
Probably about 4-5 times earnings after tax.
AC1, yes, 4 times gross income = 5 times net.
Again, somebody is trying to present some "true" value, which lives independently, floating in the ocean of market. Actual prices are below this mythical price of course. Good old Marx...
Jay
"Prime Minister Gordon Brown should buy homes on the verge of repossession to prop up the value of our houses, two former Bank of England economists said."
Step 22 on turning a property-owning class into a property-owning caste.
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