This crackpot scheme proves that British houses are too expensive

homelessskilledworker

http://www.moneyweek.com/investments/property/uk/property-market-libdems-pensions-for-houses-60700



The stupidest idea to come out of the coalition yet


The Liberal Democrats have a cunning plan to solve Britain’s housing problems.
What’s that? No, they’re not going to build more houses. And no, they’re not going to try to improve tenants’ rights. Nor have they suggested that it might be a good idea if house prices were lower.
Instead, the big idea is that parents and grandparents should be able to put their pensions at risk in the name of helping their offspring to buy a house.

ukcarper

Do we really need another thread about this.

homelessskilledworker

ukcarper wrote: »

Do we really need another thread about this.

OK, fair point.

But was trying to make more of a point that todays media are more crammed with articles with more a less the same message, "the idea is crap, high house prices is the problem"..

homelessskilledworker

http://www.telegraph.co.uk/news/politics/liberaldemocrats/9561010/Grandparents-to-use-pensions-to-help-young-buy-houses-says-Nick-Clegg.html



http://www.economicvoice.com/nick-clegg-announces-new-plan-to-bolster-house-prices/50032622#axzz27PjpUo2y



http://www.dailymail.co.uk/news/article-2207367/Lib-Dem-conference-Nick-Clegg-reveals-plan-pension-pots-help-younger-generation-rung-housing-ladder.html?ito=feeds-newsxml


http://www.guardian.co.uk/money/2012/sep/24/pensions-experts-sceptical-liberal-democrat-house-deposit-plan?newsfeed=true

wotsthat

ukcarper wrote: »

Do we really need another thread about this.

Well obviously - we always need to hear the gospel according to Moneyweek. A surprise for me as I thought they'd be all for this idea.

Loughton_Monkey

I think it's a brilliant idea. Better still, surely, is for young penniless potential house buyers to ship their parents off to Switzerland at the first sign of a cough, sneeze, or limp, and cash in the whole estate! They won't even need to buy another house will they?

Joking apart, the key inference that can be drawn is the lack of knowledge of these Liberal muppets. I thought Vinvce was supposed to know a little bit about finance. Do they not know that father's pension money does not technically belong to him. As anyone knows, the pension fund is in trust until such time as it is crystallised.

Fella

Vince Cable is a staggeringly overrated moron.

PasturesNew

Can somebody explain how this would work (on paper) ...... surely if you're working then your pension can't be touched (and probably isn't big enough) - and once you've retired it's untouchable.....

For me.... by the time I was 20 I had one grandparent left, living on a state pension in a council house.... and that grandparent had 12 grandchildren.

Sapphire

PasturesNew wrote: »

Can somebody explain how this would work (on paper) ...... surely if you're working then your pension can't be touched (and probably isn't big enough) - and once you've retired it's untouchable.....

For me.... by the time I was 20 I had one grandparent left, living on a state pension in a council house.... and that grandparent had 12 grandchildren.

Isn't there a statement somewhere in those news reports (from the Liberal Democrats) to the effect that the law may need to be changed?

I find the whole thing completely unbelievable. These people are on another planet. 'We're all in this together' indeed. :rotfl:

Loughton_Monkey

PasturesNew wrote: »

Can somebody explain how this would work (on paper) ...... surely if you're working then your pension can't be touched (and probably isn't big enough) - and once you've retired it's untouchable......

There certainly used to be something called a "Pension Mortgage". This consisted of an Interest-only mortgage in which the repayment vehicle was a pension scheme rather than the more usual Endowment policy. The latter could be assigned formally to the lender, but the pension couldn't.

I may be wrong, but I think they tended to be offered by an Insurance Company either on their own mortgages, or those lenders with whom they had an arrangement/process to highlight if the pension policy contribution didn't get paid.

They were aimed at higher rate taxpayers, and assumed the mortgage repayment would come from the lump sum.

But Cleggy wants, somehow, the future lump sum to be "pledged" to guarantee young Johnnie's mortgage. I suspect HMRC have already fired 199 papers at Cleggy to tell him what a huge amount of law change it would require, and how it really cannot work.... In this case I suspect they are right.

As we all know, pensions cannot possibly be crystallised until age 55. For those in work with several years to go before retirement, then getting their hands on the lump sum to pay Johnnie's arrears would be a non trivial task!

I see nothing wrong - in principle - with a father/grandfather guaranteeing the loan, provided they can demonstrate ownership of property that can be assigned to the lender.... But in practice, I would never recommend any parent doing this.

A._Badger

Fella wrote: »

Vince Cable is a staggeringly overrated moron.

True. But he sings a song the BBC et al love to hear.