From Housing Excellence:
Housing Minister Grant Shapps today reassured anxious homeowners struggling to pay their mortgages of the wide range of support available to help them keep their homes, and ensure that repossession remains the last resort...
The Minister made clear that just as the Government is providing help* for people wanting to get on the property ladder, a range of support* is also available to keep them in their homes and avoid the threat of repossession... Also over the next two years the Government is investing more than £200 million into the Mortgage Rescue scheme. The scheme, available through local authorities, is designed to offer a last resort to the most vulnerable families to avoid repossession...
Notwithstanding that £200 million is a drop in the ocean, isn't this just another example of The New Maths or something? There's a fixed amount of housing, so for every household 'helped to stay on the property ladder' there is another household who are being prevented from 'getting on the property ladder'.
Whichever group you subsidise, you end up with higher house prices and higher profits for the banks, and if you subsidise both you just double up this effect. Conversely, if we scrapped the equal and opposite subsidies, we'd probably end up with a higher level of owner-occupation, at a fair old saving to the taxpayer.
*"Help" and "support" are NewSpeak for "give money to".
Friday, 11 November 2011
We own land! Give us money!
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21 comments:
We in the CBI are here to tell you that all those people who have been going around since 2008 saying "stop regarding homes as an investment" and "you really should do some serious and actual financial planning for retirement" are complete idiots. We at the CBI would much prefer that you "purchase" a pension by purchasing a big expensive house, um, chiefly because that will help some of the CBI's more important members have a really splendid lifestyle and an equally splendid and early retirement, and what is more we in the CBI believe that the mortgages people secure to buy a big expensive house by realising any pension savings to fund a deposit should have a mortgage indemnity scheme which would at first glance be run and funded by "the industry" (by ahem, further inflating house prices and mortgages arrangement fees etc, just a little little bit more...) although as we have mentioned elsewhere ideally the scheme would have a "taxpayer backed guarantee" behind it - this would simply involve expanding and putting onto a more secure legal basis something like the Mortgage Rescue Scheme ....(cont page 94)
So now bailouts reach mainstreet with taxpayer monies. If I buy a Ferrari and stick the bill on my mortgage, can I haz this bailout too when I fall behind on the mortgage payments?
Sam, why do you think many of those peeps are behind in the mortgage payments? OK, maybe not a Ferrari, but repeated trips to the Money Tree of MEW to pay off the £15k credit card balance (again), holiday, new car, whatever.
And I do wish the media and Government would learn the difference between the words "investment" and "cost" or alternatively "bottomless pit for other peoples' money". I get so sick of it.
F, I'm glad that, unlike most people you see your home as a liability, not an investment. Pity, though, that you don't actually read what Mark writes, as, if you did, you'd have noticed that pensioners like you would not pay LVT in his taxation scheme. You'll have to be pretty hard up not to be able to find a property tax payment of zero.
"Still waiting for my HOME to get up off it's foundations and start providing an income"
May I suggest taking in a lodger? The "lazy bastard" would then be earning you £5K a year.
"Whichever group you subsidise, you end up with higher house prices and higher profits for the banks, and if you subsidise both you just double up this effect."
Which is precisely why they do it.
Comrade F, you are an insufferable Communist twat who refuses to answer the same old question we have posed many a time, so I shall take the liberty of deleting your tedious pathetic comment, as previously discussed. Sleep tight!
@formertory, yep: investment now means spending taxpayer monies or alternatively, buying votes.
~~
I can only guess (having missed the post) Comrade F is a diehard homeownerist, property is an investment and all that. A home is to live in, not to invest in. The fact that you can sell it for a higher price than you paid for it should only reflect inflation. And if you do really think it is a valid investment vehicle then you should have no objection to being charged CGT on the profit?
There's probably a case for short-term help, though - extra housing churn from people going broke and selling up means extra frictional costs.
That doesn't seem to be what this is.
That bubble has to be kept inflated, whatever the cost.
Anon 14.30, I've turned to page 94, it says that farmers have to be paid agricultural subsidies to reward them for preserving the countryside and The Traditional British Way Of Life, so therefore the taxpayer should pay subsidies to every land owner or business owner or public sector employee to enable them to continue doing what they are doing and preserve The Traditional etc.
S, yes of course, as long as the loan you took out to buy your Ferrari is secured on UK land and buildings, then we have to subsidise you to protect you from The Spectre Of Repossesion.
FT, that's the clever bit. On the one hand, housing is a "cost' so can't be taxed, and on the other hand housing is an 'investment' so it shouldn't be taxed. Or something.
B, our new policy is to ignore Comrade F, he's got the Morning Star and Pravda and so on to vent his spleen, I don't see why he needs space on a small government free market liberal 'blog as well.
S, that was a splendid example of Homey DoubleThink, not even Comrade F could have done better than that :-) But like all good Stalinists, he doesn't answer questions.
Anon 19.57, don't let the government loose on short term as it quickly becomes permanent.
Rob, correct, for politicians, Home-Owner-Ism is a one way bet, if house prices don't go up, you lose the next election.
It's so dispiriting if one is in the 'financial planning' business. All the time you are competing with the financial pornography peddled by the meeja (especially the BBC), the clueless regulators, the government (all and any government) etc etc. In fact I have stopped doing mortgage business completely. I just can't be party to it. And I have ramped up my FTB presentation (as in why do you think it is a good idea to make huge transfer payments to your parents?). But what good is it? Just why bloody bother?
Good piece by Alastair Heath in the Spectator:
http://www.spectator.co.uk/essays/all/7238833/this-is-going-to-hurt.thtml
"encouragement"
"protection"
Comrade F, you are a nasty devious person who refuses to answer one simple question, until you do so i shall remove your comments.
L, Heath likes to over-dramatise as usual, but this sentence is quite neat: "The Chinese state news agency, Xinhua, said the USA should cure its ‘addiction to debts’ — without seeming to notice the obvious implication that Beijing is the drug pusher."
@Mark, I know the German tax system wrt real estate, think it's a very good model (in essence, you pay CGT if you sell within 10 years of purchase IIRC).
Of course the homeownerists would be rioting if it were introduced here.
MW. My thoughts exactly. My analogy is that in 1997 Brown became the Godfather monopoly drug dealer to the UK. He set about destroying/emasculating the existing checks and balances and replacing them with his private enforcers - the FSA etc - who then motivated the dealers - the banks - to make us all adicts. He shared the risk profits with bankers to keep them on-side.
Anyway, that's what I think.
SS, interestingly, German land prices are the same as here and their council tax is much lower, but their secret weapon is very liberal planning laws, mortgage caps and rent controls which keep a lid on rents and have kept house prices stable for decades. Twenty years ago they were ridiculously high compared to the UK, but now they are a bit cheaper.
L, Brown and Blair took Home-Owner-Ism to a whole new level, and their 'regulation' of the FS sector allowed fraud and mis-selling to become rampant, the two things seem to go hand in hand. Problem is that the current lot are continuing in the same direction.
Indeed, having a house* there rented out the laws seem to favour both renters & owners (depreciation allowance wtf?) so it's a win-win really despite the CGT rules & tenant biased laws.
*inherited
Re. liberal planning laws, in my experience it's a 50:50. Small town bureaucrats turn a blind eye to planning breaches but at the same time designated farming land is über protected.
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