Monday, 12 March 2012

"£500,000 mortgages backed by the taxpayer as NewBuy Guarantee scheme launched"

From The Telegraph:

Up to 100,000 people will get Government support to take out nigh unaffordable loans on overpriced new homes allegedly worth up to £500,000 in a Coalition move to revive the bankers' dream of mass indebtedness, ministers will announce.

David Cameron will today formally open the NewBuy Guarantee scheme, where the Government guarantees a large part of the windfall gains to land ownership by encouraging homebuyers to take out much larger loans than common sense dictates...

As well as helping landowners, ministers say the new scheme will boost the banking sector – officials estimate that up to 50,000 jobs could be supported if the guarantee is fully used. Ministers brushed aside fears that the State could end up guaranteeing more risky borrowers.

Formally launching the mortgage guarantee today, the Prime Minister will today pledge that the NewBuy scheme will help repair a "broken" housing Ponzi scheme.

"It’s no good hoping people will get deeply into debt if the bottom rung is missing. Unaffordable properties and seductively available mortgages are vital," he will say. "Indebted families, large landowners and bankers rely on overpriced homes. That’s why I want us to ensure the highest possible prices for the few new homes built and I want more people to have the chance to get deeply into debt."

16 comments:

mombers said...

What about a massive program to build homes for long term rent at market prices? At least the new housing will be used in a more optimum way. Every NewBuy home will eventually end up being a Poor Widow in a Mansion, whereas a rental will be more likely to optimally used. And of course the government could trouser the land rent instead of selling it off on the cheap, never to generate public revenue again.

Mark Wadsworth said...

M, I think you are confusing the interests of the productive economy with the interests of landowners and banks.

Lola said...

Five words.

Fanny Mae Freddie Mac.

Wankers.

mombers said...

Lola, you said 'fanny' and 'wankers'. Children could be reading this blog.

Anonymous said...

Three more words:

The Daily Mash.

They really are horses' arses.

Anonymous said...

Sorry, the politicians are horses' arses. Not TDM. :-)

Mark Wadsworth said...

"After three years the government will be technically insolvent and will have to be split up into a good government and a bad government. The good bit will be bought by Richard Branson and the fat man who owns Top Shop and the bad bit will be left to fester in a disused fridge. It's innovative and exciting."

Bill Quango MP said...

The effect of your propaganda campaign.
When I heard the announcement I thought , "this is a bad idea"

Mark Wadsworth said...

BQ, thanks, I've still got a bit of an uphill struggle with my counter-propaganda.

Lola said...

Mombers.

Children do read this blog - my children. I encourage it...

Lola said...

MW

No you haven't. Some of us were there with you even before you knew we were...

Mr Lola Snr was on this in the 80's.

Ed said...

Have to say when I saw the announcement this morning my immediate reaction was "ooh, not limited to first time buyers, maybe I can upgrade!"...

Anonymous said...

It's nice to see the savaging in the comments, even if it is probably for the wrong reason

Bayard said...

I'm not sure the government are doing this to benefit landowners and bankers, more to benefit themselves. There is one group whom high house prices benefit: the soon-to-be-pensioners. The STBPs are all banking on making a massive windfall gain on downsizing to go into their pension plot. If these people are forced to lower their projected standard of living by a collapse in house prices, they will punish the government for it at the next election. I am sure the banks already have a strategy in place for making profits out of a house price crash, indeed I read that they are starting to slide their riskier mortgages off on to pension funds.

Physiocrat said...

Children use those words all the time.

Robin Smith said...

Weird. No one mentioned that there are a million empty homes in the country. And that building more would as if by magic reduce that number or discover the market price finally.

I guess it might be because we think the law of supply and demand applies to a monopoly?

Even this forum is infected by homeownerism. There was a lot of it at St Paul's too even among the activist squatters.

Its a strange place the world.