House prices will INCREASE when Osborne's £130bn mortgage help scheme kicks in

mystic_trev

George Osborne’s flagship £130billion mortgage plan to kickstart the housing market will simply drive up house prices making it even harder for people to move up the property ladder, it was warned today.

Instead of encouraging builders to increase construction on new homes, the Chancellor’s attempts to make it easier to obtain mortgages will push up asking prices, the independent economy watchdog said.

The Office for Budget Responsibility’s stark warning was echoed by former Labour Chancellor Alistair Darling who warned the state-backed mortgages risk recreating the ‘housing bubble’ in the USA which triggered the 2007 global financial collapse.

http://www.dailymail.co.uk/news/article-2299333/Osbornes-130billion-mortgage-help-scheme-wont-boost-building-drive-house-prices-UP-economy-watchdog-warns.html

Not exactly surprising news!

Carl31

Push up house prices further for 3 years, then its taken away, prices will be pretty much totally out of reach for most people by then

shortchanged_2

Carl31 wrote: »

Push up house prices further for 3 years, then its taken away, prices will be pretty much totally out of reach for most people by then

Until the next [STRIKE]scam[/STRIKE] scheme comes along.

Carl31

shortchanged wrote: »

Until the next [STRIKE]scam[/STRIKE] scheme comes along.

these government schemes are never particularly well received anyway, didnt Graham post some ridiculously low volumes for the last one recently?

Thrugelmir

Carl31 wrote: »

these government schemes are never particularly well received anyway, didnt Graham post some ridiculously low volumes for the last one recently?

Any scheme is better no scheme in the current climate.

Take away the props. Confidence will drop. Prices could gyrate all over the place. Creating huge uncertainty.

spacey2012

They are working in the interest of those that lend money.
More they can lend, more interest they can charge.

The Housing market is manipulated, most are not worth a quarter of what they are valued at.

You don't seriously think they have found a social conscience do you ?

Thrugelmir

spacey2012 wrote: »

They are working in the interest of those that lend money.
More they can lend, more interest they can charge.

The days of lending more (2000-07) are well and truly over. Lenders are more interestred in pricing the risk correctly. Than volume. With a decent margin to boot.

wotsthat

It's difficult to look at this in-depth because the details are a little sketchy to say the least. Looks like plenty of scope for the laws of unintended consequence to be applied.

shortchanged_2

I was wondering. Are there any safeguards in the scheme to stop people who have the money available for a cash deposit but opt for this scheme instead?
Thereby having an interest free loan for 5 years and in the meantime investing the equivalent amount elsewhere to get a return.

If that's the case I might have a bash myself.

the_flying_pig

the thread title's a bit pointless. the key thing in the article seems to me to be as follows:

Q// will the schemes lead to anything other than a trivially small increase in building?

A// OBR bloke and Darling think not.

Mr._Pricklepants

the_flying_pig wrote: »

the thread title's a bit pointless. the key thing in the article seems to me to be as follows:

Q// will the schemes lead to anything other than a trivially small increase in building?

A// OBR bloke and Darling think not.

Are we reading the same article? Or have you been 'skimming' again.:rotfl:

Firstly, the thread title is not pointless as it's an exact copy and paste of the article title.

Let's continue:

will simply drive up house prices

the Chancellor’s attempts to make it easier to obtain mortgages will push up asking prices

former Labour Chancellor Alistair Darling who warned the state-backed mortgages risk recreating the ‘housing bubble’

but instead flood the market with buyers and push up prices.

The key is: is it just going to drive up house prices – by and large in the short run the answer to that is yes.

If you need further help with reading, let me know.:)