From The Daily Mail:
Banks should offer ‘mates mortgages’ to help groups of friends buy a home together, a Government minister will say today.
Grant Shapps will urge lending giants to send a lifeline to the record numbers of first-time buyers struggling to get on the property ladder. The housing minister said that without urgent help from banks a generation of young people would be locked out of the market. The answer, he suggested, was a radical and new type of lending that he called ‘mates mortgages’.
In most parts of the country it is almost impossible for a young person with a full-time job to buy a home on their own. The average salary of workers in their 20s is £21,000 whereas the cost of the average home is around £160,000. As a result, only those on much higher salaries or with family money can put down a deposit on a house.
Mr Shapps said: ‘If there are mates who are perfectly capable of paying monthly mortgage payments but are struggling to fund a deposit of their own, there should be straightforward options to unite with their friends and take the first step on to the housing ladder together.’
I'm sure you can all see several flaws in that.
Tuesday, 5 July 2011
Another day, another desperate throw of the dice (45)
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12 comments:
All live together in one big happy family.
As Hancock invariably said, Stone me! And Shapps is one of the brighter ones.(Maybe he is and just wants out of his impossible position)
Uh? Hasn't this type of mortgage been around for a very long time? ISTR buying a house with my brother back in the 80's using this kind of thing.
L, yes, I've twice jointly owned a house and both times I was lucky: I could afford to buy out the other owner first time and the other owner could afford to buy me out the second time, but I can see it going horribly wrong when one joint owner wants to be bought out and the others can't afford/don't want to.
Mark, I think you should start a series like the "Arguments against LVT" one, entitled "Can't see this one going wrong...."
JH, no, "happy families" is not what this is about, it's about "happy bankers and middle aged homeowners".
L, if house prices go up, they'll be kicking themselves that they didn't buy one each; if prices go down they'll be kicking each other.
DBC, I'm beginning to doubt it, actually.
B, yes it has and you were lucky twice. This is a series - they are up to desperate thorw #45 by now (plus several dozen I probably overlooked).
What if you are, like me, an unsociable bastard, with no friends?
Subsidising housing is bad enough, but now we're subsidising the ability to not fall out with your housemates.
OP Don't be so hasty to think you are unique in that respect. Do you think that going out to a dinner party, sitting listening to the ignorant bang on about house prices and then launching into Georgism makes you friends? Mrs Lola issues an order in council before we go anywhere. "Keep you big gob shut, or else"
OP, you may consider yourself unsociable, but I'm sure you'd be a dab hand at setting up a spreadsheet to split up the rent and the bills to the nearest penny :-)
L, my wife just turns on the waterworks :-( if I even mention LVT at home, let alone in front of the brainwashed masses.
Lola, MW (group hug) thank f***ing God for the internet!
SL, returned herewith.
I came across a scheme called LAMS yesterday; dare I say the Local Authority Mortgage Scheme, designed to "help first time buyers onto the housing ladder" and "stimulate the housing market" by having lenders lend 95% LTV with an indemnity given by the local authority for any losses on default.
The explanatory material stresses that "this is not encouraging reckless lending" because lenders "will apply their usual guidelines as to suitability for a mortgage".
Give me strength. The local authority is the same bunch of pricks, of course, that refuses planning consent for almost everything almost everywhere and so has driven up the price of a rubber-stamped on a piece of paper to about £80k, even in our remote corner of the world.
FT, to my pleasant surprise, at the Priced Out meeting (see later post), Ms C Flint kept mentioning such schemes, and people round the table responded "We don't want these schemes that only help us to get even deeper into debt! We just want lower house prices!"
Hallelujah! Maybe common sense is dawning slowly. The view that house prices are ludicrously high and so a Bad Thing Generally appears to be gaining a little more traction overall; perhaps it's wishful thinking but I seem to hear the position mentioned more frequently these days.
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