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Debate House Prices
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Mortgages delayed 2 years - let's wait and see?
neverdespairgirl
Posts: 16,501 Forumite
I'm not sure how we can really assess this scheme yet. It seems very spin-orientated, and the detail is just not there at the moment.
I've become a bit wary of the Government's claim that the eight biggest banks have backed the mortgage-guarantee scheme, having spoken to a couple of them.
They're not prepared to attack it in public. But they're not sure it will have much of an impact, unless they are strong-armed into keeping the genuinely !!!!less in their homes - which the banks feel would be a bad thing.
Also, Margaret Beckett, the housing minister, has just said on BBC Five Live that a bank has estimated for the Government that the scheme will help perhaps 9,000 families who would otherwise have lost their homes.
That's rather smaller potatoes than the Prime Minister implied - although, as Mrs Beckett also said, the existence of the scheme may alleviate the anxiety of many more hard-pressed families.
http://www.bbc.co.uk/blogs/thereporters/robertpeston/
I've become a bit wary of the Government's claim that the eight biggest banks have backed the mortgage-guarantee scheme, having spoken to a couple of them.
They're not prepared to attack it in public. But they're not sure it will have much of an impact, unless they are strong-armed into keeping the genuinely !!!!less in their homes - which the banks feel would be a bad thing.
Also, Margaret Beckett, the housing minister, has just said on BBC Five Live that a bank has estimated for the Government that the scheme will help perhaps 9,000 families who would otherwise have lost their homes.
That's rather smaller potatoes than the Prime Minister implied - although, as Mrs Beckett also said, the existence of the scheme may alleviate the anxiety of many more hard-pressed families.
http://www.bbc.co.uk/blogs/thereporters/robertpeston/
...much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.
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Comments
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To save his skin what will he come up with next?
Maybe he will let every mortgage holder have a year off from payments as long as they spend it in the shops0 -
9000.
Isn't that a good thing?
Presumably the others who cannot be helped are basket cases anyway. Even if they were given the option it would only delay matters. There will be families that just need time to get back on their feet after this downturn hitting hard.
If it keeps 9000 in their own homes then that is a great deal less stress for them plus this is not being written off, they could well find another job and be able to repay.0 -
If it keeps 9000 in their own homes then that is a great deal less stress for them plus this is not being written off, they could well find another job and be able to repay.
Maybe the new job offered to them will be in a different location. Like that thread the other day where he/she was offered a good job with good prospects in Bloomsbury.. and was weighing it all up with help from the forum.
This stupid scheme is more likely to limit people from moving when it would be in their interests to. Their debt problems just getting worse and locks them down in an area, when they may be best taking the hit with the correction.
And that, like PN said, is just one of the many many side-effects of this clumsy, ill-thought-through, market intervention.0 -
Why can't they move? Let's say they get offered the new job after four months of no job. If they want to move then I am sure they can if they repay all of their negative equity plus rolled up interest. It wouldn't have been better for them to have been repossessed after three months of unemployment. The banks will have sold the property for nothing. Yes they can move and rent (perhaps) but and the difference in price and mortgage could be ruinous.
The reason I am all for this is nothing to do with the general prinicipals of mortgage borrowing and all because of the outcomes of repossession - years (futures?) ruined by forced sale at auction and likely suicide when some find out the level of remaining losses to repay.
I know a lot of people on here don't care. I do.
Yes, house prices will take longer to fall. No that's not what I want. However, I would prefer that to people leading wholly distressed lives. I believe in karma. Not a lot of that on here.0 -
Why can't they move? Let's say they get offered the new job after four months of no job. If they want to move then I am sure they can if they repay all of their negative equity plus rolled up interest.
Well the person I was referring to didn't seem to have negative equity or debt issues. He/she came asking questions about moving to the London area (with a job offer in Bloomsbury), and was focussed on the costs of renting/buying in the surrounding area. Could she afford it was most in his/her mind.
The market intervention by Labour and Brown is more likely to keep house prices, and rents higher (for a little bit) than they should be, as debt sufferers don't have to sell/move. Given a natural course without intervention, the prices could drop and so allow him/her to move in to the new area, and take up a job to help the economy.. pay more in taxes, help recovery, ect ect.0 -
9000.
Isn't that a good thing?
Presumably the others who cannot be helped are basket cases anyway. Even if they were given the option it would only delay matters. There will be families that just need time to get back on their feet after this downturn hitting hard.
If it keeps 9000 in their own homes then that is a great deal less stress for them plus this is not being written off, they could well find another job and be able to repay.
9000 ?, so next year we are going to see 66000 repo's instead of 75000 and it's going to cost 1 billion. This is typical of Clown, like his other schemes it looks fantastic and gets great headlines for a day or two but when the media hype as gone and it's examined more closely it turns out to be a turd.0 -
To be more specific:
(click the
for full thread/post)Hi.
There is a job I might be interested in, but it is in central London (Bloomsbury). I wouldn't be making any more money than I do here in West Yorkshire, and we can't guarantee OH could work, and if he could, it isn't going to be long term because of his medical condition, so it is only possible to apply for the job at all if we could live on my salary. But - it is a prestigious institution and a real step up.
Yet people here are celebrating at the fact mobility is reduced for those with opportunity.. especially those will skills and in know-how that is still in demand. You'd rather have people remain in their houses, even though they can't afford them, and keep prices higher than they should be... rather than letting prices adjust and allowing opportunity to those with skills in demand.
For all you know.. this person might have the skills and creativity to help the next big company in the UK, and generate jobs and opportunity for others. Yet most likely they won't move because they can't afford the area - made worse by Gordy's plan. Forget "out with the old, in with the new"... but keep the old happy and comfortable and lock out the new from opportunity.0 -
9000 ?, so next year we are going to see 66000 repo's instead of 75000 and it's going to cost 1 billion. This is typical of Clown, like his other schemes it looks fantastic and gets great headlines for a day or two but when the media hype as gone and it's examined more closely it turns out to be a turd.
You are mixing numbers to suit you (9000 from the media and 1 billion for GB). It's not going to cost 1 billion if only 9000 are helped. It will cost 1 billion if the numbers GB says it will help are helped.
They are underwriting two years maximum 400,000. Let's say 6% interest, 9000 families. Thats a maximum of 4.32 million plus a bit more for compounding. That maximum assumes nothing is repaid (and some undoubtedly will be)and it assumes every one of those households has a 400k mortgage - which is not the case. It also assumes the banks dont pay anything for this and they are.0 -
House prices will still fall. There is little credit available and FTBs have to be able to afford homes before the market becomes real again. It will just take longer to adjust.0
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Cost is less than a £100m
http://www.ft.com/cms/s/0/39ab3296-c143-11dd-831e-000077b07658.html?nclick_check=1
Officials estimate the measures will amount to a £1bn “contingent liability” but cost about £100m.0
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