From the DCLG website:
Grant Shapps said: "With 80 per cent of young first-time buyers depending on parental help, I am determined that we pull out all the stops to help those who want to take their first steps onto the property ladder.
"FirstBuy will do just that - a Government-backed scheme making £500 million available to offer a valuable alternative to the Bank of Mum and Dad. Over the next two years, this will help as many as 10,000 people in England to get that much-needed deposit together and realise their dreams of owning their own home.
"And because this help will be available on newly-built properties, it will also offer a much-needed boost to our housebuilding industry, supporting thousands of jobs across the country."
Stewart Baseley, executive chairman of the Housebuilders Federation, said: "Firstbuy will help first time buyers, boost economic growth and provide a vital shot in the arm for the house-building industry. Our members have reacted decisively to support FirstBuy and recognise the scheme is an important first step."
Or, they could just stop trying to prop up house prices and let young people get on the ladder without being saddled with extra debts of £50,000? That would be good for the taxpayer, good for the first time buyer and good for the economy. It would, of course, be bad for existing home owners, land owners and banks... ah, right.
And no, propping up house prices and underwriting the value of home-builders' land banks does NOT boost economic growth, in case you were wondering.
Monday, 20 June 2011
Same day, another reckless throw of the dice (43)
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15 comments:
Oh, oh, I know this one, it's the broken window fallacy.
What hope do we have, really?
"I am determined that we pull out all the stops to help those who want to take their first steps onto the property ladder."
They always use the word "ladder" as a cosy metaphor. "Grim, ice-bound mountain" would at least be a slightly more honest metaphor.
Stewart Baseley, executive chairman of the Housebuilders Federation, said: "Our members have reacted decisively to grab yet more 'money for old rope" adding "hey I thought these guys all had advisers who were 1st class PPE graduates if they weren't themselves, but they just keep on rolling out these 'how much do you want to be given in return for saying how wonderful the government is in actively supporting hard pressed would be home-owners" time after time ! Oh and mines a triple Courvoisier thank you Grant" ...
I read this earlier and thought of you!
I wonder if the government will be printing the money to cover this inflationary scheme.....
Now that is what I call "spin" !!!!! http://www.bbc.co.uk/news/business-13838488 Simply brilliant - can't have people (naysayers !) suggesting this terrific scheme is actually financed using money the government has had to borrow, so DCLG (one assumes someone had a quiet word with the Beeb) pre-empts any of that by saying "oh, this is money from the banks - specifically hypothecated in the levy on the banks" - which is really funny, because I don't remember the Oik saying the levy on banks was going to be used to "prop up the very market that when it collapsed caused a major panic which involved the taxpayer borrowing lots of money to throw at the banks" - presumably because the Oik thought "that would be an incredibly silly thing to say" ... but now, at least in the DCLG, it isn't silly at all ....
TCO, none.
AKH, or "property snake".
Anon, it doesn't bother me that vested interests ask for hand outs, it bothers me that people believe their spin and that the govt is implicated in the whole thing.
JQ, indirectly, yes. it will end up being added to the national debt.
Anon, "funded from a levy on the banks", now that is good spin! What's worse is the notion that you can capture the air from a deflating balloon and use it to reflate the balloon, it just can't work, it's like trying to devise a perpetual motion machine.
"It would, of course, be bad for existing home owners, land owners and banks ..."
I disagree.
Everyone benefits from an economy that operates efficiently. The benefit is not instant and, in that respect, a slump of house prices can be said to be bad for the three categories you mentioned; but over as short a period as a decade all paper losses incurred will be replaced by substantive gains for all active participants in the economy.
Looking at it another way, it is not bad for anyone to lose "value" that is mere bubble value. It might seem like a loss but it is not because the perceived value never existed substantively at all, it was an illusion. For some that illusion could be turned into cash by trading down, but hardly anyone does that (and, say I, good luck to those with the guts to do it).
There is, to my mind, no difference between the house value bubble and the GDP bubble caused by the spending of money borrowed by the government. Remove the bubble and we all live in the real world - a far healthier state of affairs.
MW - perfectly agree that "vested interests" would be behaving quite strangely if they stopped agitating for themselves - thus giving rise to the "Aw who gives a toss, we'll happily be divested of our interests interests" and of course that it would be "quite nice" to see more use of the simple "No" in response to VI pleadings. But on that "deflating balloon that pumps itself back up" thing - for a moment there I thought you were satirising "I am on the side of the common people - the common people can go hang" Mr E Pickles !
TFB, yes, good point.
Anon, like I said, it is perfectly normal for people to go to the government and ask for special treatment, there's nothing wrong with that, provided the government tells then to go away in no uncertain terms.
We really are locked in between a coalition of utterly incompetent economic ignoranamuses and New Labour (which is the same thing), aren't we?
Two quotes spring to mind, both from H2G2 - 'Death's too good for them' (Prostetnic Vogon Jeltz) and 'I think you ought to know I'm feeling very depressed', (Marvin, the paranoid android). Both seem very appropriate to me.
Meanwhile back on planet earth, trying to earn a crust in retail financial services one also despairs at the continuing slavishness to this 'house price rises are always good' meme. You'd think my peer group (almost universally anti-bank would have realised it all by now, but no. Ho hum.
L, that's the icing on the cake - everybody's anti-bank nowadays, but not because they helped inflate house prices to unaffordable amounts, but because they are no longer doing so!
seen this crap...?
http://conservativehome.blogs.com/platform/2011/06/brian-binley-help-for-the-home-front.html
L, I seldom look at ConHome because it's usually text book crap - just like that article. DBC Reed had once earmarked Binely as a potential LVT-er but it would appear not!
From Wikipedia...
Expenses
On 17 June 2009 it was revealed that Binley had claimed over £50,000 in expenses, renting a flat from his own company, BCC Marketing.[8] Two months after beginning to rent the flat, expenses rules were changed to clarify that MPs could no longer rent properties from businesses in which they had an interest. Binley appealed to the Speaker of the House Michael Martin, whilst still claiming for the flat. Binley lost his appeal after two and a half years, during which time he still claimed for the flat in question. Binley has not had to repay the £57,000 he improperly received while the Speaker deliberated.[9]
The property market is just dreadful at the moment for first time buyers. There is no help what so ever. There are a lot of affordable houses available at the moment, namely repossessed homes. But there is a time limit of 28 days from the day of offer, to changing contracts. Most mortgage brokers, can't even process a mortgage in that time. They usually say that they can process a mortgage within 6 to 8 weeks. So that means, they haven't even decided whether to borrow the money or not. Usually after the Surveyors Reports (which you have to pay for), it all goes down the toilet. The Mortgage Brokers see that there are repairs to do on the property, and then decide not to borrow the money at all. Very often than not, you are always the last to know about it. In the meantime, you just paid money to set the Solicitor away, and they are waiting to hear from the Mortgage Broker. Land searches already done and you just paid over the deposit. It's just one big joke at your expense. I personally think the sellers should already have a Survey Report to produce to the buyer and the lender, that way everyone knows where they stand before anything happens. I can't see why the buyers have to gamble their money for nothing every time. This has happened every time I have tried to buy a house. It's not the fact I can't afford a home, it is actually cheaper than paying rent. Personally the whole system is wrong, but no one is doing nothing about it either. Who gives a dam!
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