King Boosts New Stimulus Package to £300bn

Fella

HAMISH_MCTAVISH wrote: »

What you need is for anyone with a decent credit score, a decent work history, and a 5% deposit to be able to walk into a bank and get approved for a mortgage at non-punitive margins above bank funding costs.

Did you argue for that though, during the time when any monkey could walk in off the street, ignore their credit score, invent their work history, and not bother with the 5% deposit?

Serious question, since your posts suggest you do actually understand how this works but if you didn't argue for the above then you are in no position to say what's needed now.

Graham_Devon

You need affordable mortgages to run alongside affordable homes.

One or the other doesn't work.

The UK needs to start a proper building programme, employing people, providing contracts for business who can then expand their business, providing house price falls so that people can take on the sort of mortgages Hamish talks of.

This aim of propping up the prices, or indeed, making prices higher of the existing houses and pushing everyone into even higher debt simply won't work in the long term. Granted however, it can fix things for the short term if what you are trying to do is increase asset prices.

Theres development near me of over 200 homes, but this development is happening over years. 9 year plan. The whole scheme is set up to dump a few houses every now and then so as not to depress prices. There was even a whinge in the local rag about the way it's being done, as it also doesn't create much employment and leaves building sites empty with just security on it for over a month. The plan is to also include a school, but people are stating they can't buy as the school will be built too late, and families can't plan like this. The services will only come a few years down the line, until then, you live on a building site.

Surely if we are dumping money to lend into the system, it makes sense for houses to actually be built and the lending used. Theres plans for a shop, but of course the shop won't be open until there are enough people to service. So until that point, you live without ease of access to these services. Not many want to live in this way, but builders seemingly build this way.

the_flying_pig

HAMISH_MCTAVISH wrote: »

Or, for example, start lending a lot more at historically normal, prudent and sensible deposit levels.

Instead of the current situation where just 1.98% of mortgages issued are at a 10% deposit.... And a shockingly low 0.38% of mortgages issued are at a 5% deposit.

Like most on here i've mostly stopped responding to the substance of your posts given that you only really trot out the exact same two or three points ad nauseum, without a shred of intelligence, rigour, balance, or humour, but just to pick you up on the "historically normal" point, please don't let's forget that lending multiples of joint incomes are vastly higher than the historical norm.

sabretoothtigger

Was the newbuy scheme available with fixed rates

Thrugelmir

Originally Posted by HAMISH_MCTAVISH
If the Europeans can get their act together and things don't implode, this could lead to a pretty big increase in mortgage and business lending, and a much more rapid recovery in the housing market and wider economy that we've seen so far.

The issue for Spanish banks (and indirectly the Government) are far from solved. German regional banks aren't in best of health. Having bought loads of toxic debt. The problems caused by the credit boom are far from over. Europe as a whole has yet to agree on the solution. A far from easy task given the wide range of opinion.

HAMISH_MCTAVISH

Thrugelmir wrote: »

Europe as a whole has yet to agree on the solution. A far from easy task given the wide range of opinion.

Germany's previous positions are becoming increasingly isolated.

The rest of Europe, and indeed the world, appears to be coming into alignment behind a realisation that growth is the only way out.

https://forums.moneysavingexpert.com/discussion/4022121

https://forums.moneysavingexpert.com/discussion/4022111


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grizzly1911

HAMISH_MCTAVISH wrote: »

There are several million renters paying more to their landlords than a mortgage would cost. Even if that mortgage was at 5%.

Affordability obviously isn't the issue.

Many landlords are not so fussy about the long term covenant, many renters don't necessarily want to buy and many more get assistance to pay.

homelessskilledworker

am one of these property bears who is hoping they do go for growth now, even though I believe borrowing got completely out of control and will have to be addressed at some point.
But making people suffer and struggle because of their past misdemeanors is one thing, execution is another.

By all means pump money into the economy, but make sure it goes to infrastructure, homes, education, and manufacturing(exports).
And lets have none of this money go to bankers or city spivs.

Generali

HAMISH_MCTAVISH wrote: »

Germany's previous positions are becoming increasingly isolated.

The rest of Europe, and indeed the world, appears to be coming into alignment behind a realisation that growth is the only way out.

https://forums.moneysavingexpert.com/discussion/4022121

https://forums.moneysavingexpert.com/discussion/4022111


.

It's true but growth that merely comes from shifting taxes from tomorrow to today (i.e. borrowing to spend on civil servants' salaries) doesn't help anything.

Borrowing to increase the productive capacity of the country is fine because it makes you more able to repay the debt. The UK Government is borrowing about 8% of GDP this year. If the UK can produce a total of 8+% more as a result then that's fine, if not then repayments just get harder to service.

Rinoa

Further confirmation that Banks will be allowed to run down reserves.

http://www.thisismoney.co.uk/money/markets/article-2163311/BoE-allow-UK-lenders-free-billions-cash-buffers-drag-economy-recession.html

The Bank of England looks set to allow UK lenders to free up billions of pounds from their cash buffers to help drag the economy out of recession.

The Financial Policy Committee – Threadneedle Street’s risk watchdog – met yesterday to discuss ways to kick-start lending to credit-starved businesses.

Experts believe that when it publishes its findings on Friday next week it will recommend plans to relax rules forcing banks to hold large amounts of cash in reserve.

It is hoped that the money will be used to lend to households and businesses as the Bank steps up efforts to stimulate growth.

Together with the Treasury the Bank last week announced two new packages worth £140bn a year to keep banks afloat and encourage lending.

Governor Sir Mervyn King, who chairs the FPC, also hinted that the Bank may look at relaxing liquidity rules for UK lenders in his Mansion House speech. He said: ‘In current exceptional conditions, the need for banks to hold large liquid asset buffers is much diminished.’

Vicky Redwood at Capital Economics said: ‘Following the comments, it is likely that the FPC will advocate relaxing the liquidity requirements for banks in some way.’

Deputy governor Paul Tucker – who is also on the FPC – has also said regulators should look at freeing up hefty cash buffers.