From the BBC:
"A London council is to help families get on the housing ladder by offering tenants and first-time buyers £50,000 deposits. Wandsworth councillors will discuss plans to set up a special "deposit fund" to help low-income families...
The council is to lobby Government for the financial freedom to create a "deposit pool" funded from the sale of council housing and future development. Initially, interest-free deposits of up to £50,000 would be repaid back into the fund once the property was eventually sold."
I refuse to believe that a council could, collectively, be so stupid as to imagine that this will help those whom it is supposed to help and assume that this is downright corruption, i.e. maybe a lot of the councillors own buy-to-let flats in the area and they want to be able to sell them at a high a price as possible.
What this council cheerfully overlooks is that it is a f-ing council!
If the council gives somebody an interest-free loan, repayable when the home is sold, then it is effectively part-owner of that home but is not charging rent for it and is bearing a lot of the risk of the value falling. That's about the worst position you could be in.
Alternatively, for £50,000 they can build a whole flat or maybe a small house and own it outright. Sure, land is expensive round there, but it's actually only land with planning permission which is expensive. Land without planning permission is pretty cheap wherever it is. And the council is in charge of granting planning permission, so it can give itself planning permission for free. Problem solved.
Surprised by the outcome
1 hour ago
7 comments:
Another Newspeak example too. For "Deposit fund" read "council tax payers's money."
Wandsworth = famously one of the most Thatcherite councils of any out there, and have form in gerrymandering. So I think this is an expensive way of using ratepayers' money to buy Tory votes ('I have a house now, so I must be middle-class, so I'll vote Tory'), in an analogous way to Mrs T's discount sell-off of council flats in the 1980s.
Well despite what anyone might say I think any Council which can in the course of one short "handy and simple explanation of an absolutely bonzer scheme - which two of our illustrious Councillors dreamt up whilst standing next to each other pointing percy at the porcelain during a comfort break in a policy creation session held between 6 pm and 11:30 pm the night before at the Lamb and Flag (minutes available on request)" - say one the one hand "we will fund this from council house sales" but on the other "we are lobbying the government to give tenants the freedom to use their Right to Buy discount to buy in the private sector, freeing up social housing for other families" aka "doing our utmost to prevent council house sales" deserves praise and prizes. Innumerate Illogical Total Fuckwits of the First Order and Bar all round. Then again, if MW is right in his idle musing that maybe "a lot of the councillors own buy-to-let flats in the area and they want to be able to sell them at a high a price as possible" being able to tell tenants "we'll advance you ahem the cash represented by your Right to Buy discount when buying these ..." maybe not so innumerate or illogical. Proof in fact that politics attracts the sharpest minds !
AKH, ah, but "fund" sounds so solid and wholesome.
JB, this policy is possibly even worse than RTB, although it's hard to tell. It would be fun if they funded it out of a precept on Council Tax though as a quasi-Georgist system.
Anon, well said, but do you reckon they are just terminally stupid or actually corrupt (whether they are lining their own pockets or buying votes is hard to tell).
It's Freddie Mack and Fanny Mae writ large, everyone knows, with the exception of the Council involved that these poor recipients of tax-payers money will never, ever be in a position to repay the "loans" and so will default.
But, some bright spark will bundle up these "toxic" "assets" and sell them on at great profits and bet on them defaulting making even greater profits.
Ring any bells anyone????
£50,000 at no interest over, say, 30 years is practically free money, a gift. They are selling current assets (property) originally paid for with taxpayer's money and are giving the money away.
Presumably the coincil is also whinging about 'cuts to frontline services'?
Mark: Indeed. These guys are going to be in hock to the council - and presumably, if the loan is underwater, they'll be just as screwed in terms of moving house as bank tenants (or "mortgage-holding homeowners", as they're euphemistically called), so it won't even have the mobility advantages ("I can sell my 3-bed in Peckham and retire to a nice house in Southend with no mortgage, so I will") of RTB.
Rob: unlikely, as (see above) it's Tory, been Tory forever, and is very ideologically Thatcherite.
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