UK Government to Underwrite New Mortgage Lending

tclick

This is good news for all of us in the construction supply industry. Long may it continue.

2011 has been the worst year on record for us but we have seen a slight pick-up in the last few months, signs of things to come?

There were always two industries that were the first indicators of coming recessions, Print and Construction.

Graham_Devon

Ahhh, the same CBI report that also included the proposal that we should be able to cash in our pensions early (very very early in some cases) in order to be able to gain the deposit for a house.

We'll have no pension, but who cares!!

Out,_Vile_Jelly

I don't want a dodgy loan or dubious deal involving my pension (such as it is). I would prefer to borrow less against a lower price. Surely that's just simpler all round?

noodle_doodle

We live in a democracy, where the number of votes counts, not the cumulative IQ of those casting them. This means the government will pander to X million people happy to get into ludicrous amounts of debt to buy a house, and Y million not wanting to see their house values fall, rather than a few hundred thousand high-earning STR types who thought they'd made a logical market call. Unfortunate for them. Market forces may well say its unaffordable in the end, but the end may be far over the horizon from now.

the_flying_pig

doire wrote: »

...The frothing is laughable even before this scheme is even set in stone. No-one even knows if its for all mortages or just FTB? New builds?

If this was: (1) only for new builds; and (2) on a very modest scale; and (3) something that somehow enabled the taxpayer to properly share the risks and rewards of ownership, it'd be perfectly OK IMO.

IronWolf

Oh no they aren't actually seriously considering that stupid pension pot deposit idea are they.

Dan:_4

I thought the Torries would stop all this 'proping up' nonsense and just let the banks and markets be.

Thrugelmir

wotsthat wrote: »

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.

Why? If people are income rich but capital poor. Then there's no reason not to give then a helping hand onto the first rung of the ladder. The easy days of lending of the early 2000's are over. Providing that people meet the underwriting criteria standards, have repayment mortgages from the offset and borrow on sensible income multiples. then this concept isn't as high risk as it may seem. If anything it will bring more normality and stability to the market place.

toby3000

It doesn't seem a very efficient way of spending government money, to be honest. If it was only for new-builds I guess that would be an advantage, but surely if the money would be better spent on building new council housing - construction gets a boost and we get desperately needed social housing.

I don't really see why the government would be keen on having people have ever-larger amounts of money tied up in property, which I've always thought isn't very economically efficient.

grizzly1911

The CBI has a vested interest as it represents business that will benefit from the government guarantee/cash.

It is not interested in the long tern future of the individual or the state.

It is not resolving the cause just treating a symptom.

Housing, and the increased borrowing against inflated valuations is a big part of the reason we are in this mess.

If people are income rich let them save it for a few years and let the market stabilise itself.

If the government must use our money then a least use it to build a housing stock that we can all see a return from.