Monday, 22 July 2013

I haven't but my wife/husband/partner/dog has interests in several - is that relevant?

"It was also confirmed that people will not be able to use the scheme to buy second homes, with lenders required to collect a declaration stating that the borrower has no interest in a property anywhere else in the world. It will not be possible to use Help to Buy in conjunction with any other government home-buying scheme".

Credit history will bar many from £12bn scheme for homebuyers

22 July 2013: Those keen to benefit from second part of the Help to Buy scheme to be subjected to income checks and 'stress testing'


mombers said...

It seems that the gvmt is just going to ignore the chorus of people warning how stupid this scheme is and go ahead regardless. MW, what do you think of a suggestion to mitigate the risk by restricting this to mortgages fixed for 5 years or more? The UK has a relatively long average duration of gilts which protects us from swings in short term interest rates, but adding a bunch of Freddie Mac style guarantees to the national debt will reduce the duration if the guarantees are on floating rate or short/medium term mortgages. This will damage the credit rating of the country more. Your thoughts?

mombers said...

Also another risk mitigation for the scheme would be to remove the care home bung to anyone who takes part in the scheme. You can chose between a government subsidy to buy your house or one to pass it to your heirs. Also might want to say that if you use it you lose access to winter heating allowance and pensioner tax credits unless you sell the house and give the proceeds to the government. All these suggestions are of course wildly unrealistic but an interesting thought experiment

Mark Wadsworth said...

M, long term, schmong term. Ultimately, this must be bad for UK govt credit rating and for future taxpayers (who'll be struggling with higher taxes AND larger mortgages).

"All these suggestions are of course wildly unrealistic but an interesting thought experiment."

Wot? Steal money from hard working pensioners and deprive their children of the family's accumulated wealth?

So that people like you and me can spend it all on iPods and flat screen TVs? Are you mad?