UK Government to Underwrite New Mortgage Lending

HAMISH_MCTAVISH

For those who can't afford deposits.....

ministers are working on proposals to meet the three demands of the employers' organisation the CBI for:

* a scheme to encourage the creation of jobs for those who are young, unemployed and have few qualifications

* a rebate for high energy-using industries to limit the impact of soaring carbon prices and green taxes - which were today partly blamed by RTZ Alcan for the closure of its plant in Northumberland

* And, most intriguingly of all, a scheme to underwrite mortgages to lower the risk to lenders when faced by those who want to buy a house but simply cannot afford the necessary deposit.

http://www.bbc.co.uk/news/uk-politics-15766391

If this scheme happens in any meaningful way, it's absolutely game over for the bears.

Good to see some action being taken on the economy though.... And not before time.

A second round of QE already launched, and now the Govt to underwrite high LTV lending to get the mortgage and housing markets moving again.

Looks like some lessons are being learned.....

You can't have a sustainable recovery in the wider economy without a sustainable recovery in the housing market, and the housing crisis won't be fixed until lenders start lending at historically normal, prudent and sensible levels again, as builders won't build what they can't sell.

:beer:

globalds

This is irony .....Right ?

reweird

You should go over right now as the bears are in uproar ripping themselves apart with this latest government salvo landing straight into the heart of HPC central.

Sibley

Yeeesssss.
We've been saved.

House prices will rocket up now.

ruggedtoast

Yes, the government is flush with cash at the moment for things like this. Free money for all.

Going4TheDream

Didnt the previous government do something similar for nurses/ teachers etc I believe it was, where they were given an allowance or something towards a house purchase?

The thing I find strange is that if we have mortgage rationing and all of a sudden everyone turns up with the required deposits then wont the required deposits just 'raise' again so that only the best risk are selected for the few mortgages that are available meaning that mortgages are still out of reach for some? (or am I being dim)

(and I agree RuggedToast, just where is all this money coming from?)

wotsthat

The last thing the government should be underwriting is the debt of people who "simply cannot afford the necessary deposit". Seems like quite a high risk idea.

My guess, and I've nothing to support is, that there are more people with deposits than we think waiting in the wings - they've just not got the confidence to spend it.

Turnbull2000

Was waiting for this to happen. Intervention such as this was inevitable. Not only will it open up the property ladder to more youngsters and increase transactions, but house prices should react positively too.

Meanwhile, house building remains in the doldrums and immigration continues unabated. When will the bears (well, the few that a left) understand that the politicians will be quite content for that to continue? I warned them about this. I warned that they're desperate for hight LTV mortgages to prop up the market too.

A nationwide recovery to peak prices should be on the cards quite soon IMO.

This is MASSIVE news.

Game over bears. Game over. I can only suggest you buy ASAP using this scheme before prices reach new heights.

nearlynew

You might be able to move out of your sister's spare bedroom now turnbull.

DaddyBear

HAMISH_MCTAVISH wrote: »

For those who can't afford deposits.....

http://www.bbc.co.uk/news/uk-politics-15766391

If this scheme happens in any meaningful way, it's absolutely game over for the bears.

Good to see some action being taken on the economy though.... And not before time.

A second round of QE already launched, and now the Govt to underwrite high LTV lending to get the mortgage and housing markets moving again.

Looks like some lessons are being learned.....

You can't have a sustainable recovery in the wider economy without a sustainable recovery in the housing market, and the housing crisis won't be fixed until lenders start lending at historically normal, prudent and sensible levels again, as builders won't build what they can't sell.

:beer:

The housing market will not recover until property becomes more affordable for a larger percentage of the population without relying on government subsidy. Projects like this get the bulls excited but have about as much impact as a fart in a hurricane.
There is a lot of pain ahead for the bulls. You can't have a ten year long party without clearing up afterwards. The problem is that the party finished 4 years ago and nobody has cleared up, in fact the mess had been added to.

Aberdeenangarse

Just add it to the list of other failed Government initiatives

http://www.direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/BuyingYourHome/DG_4018090