Will the mortgage guarentee go ahead?

Thrugelmir

ManAtHome wrote: »

Surprised (not really) that there's no mention that 'the taxpayers' underwriting this scheme are currently coughing up £100 billion a year less than UK plc running costs (meh, billions are soooo noughties....).

As at the 31st March the taxpayer still had an interest in the banks of £141 billion. Made up of £115 billion cash and £26 billion guarantees.

Possibly the hope is that NRAM can divest itself of some of it's legacy mortgage book of around £70 billion under the scheme. As that's where the losses may mount up in the future. .

ManAtHome

Yep, certainly a growing heap of "hope something turns up"

[Deleted User]

I'm going to try and get in early on this scheme before the boom starts.

Graham_Devon

LOL even the express are getting in on the act and have published an article warning of a "disastrous" house price crash.

The express! I mean, normally they are celebrating every time the average house price rises 96p!

http://www.express.co.uk/news/uk/416885/Top-economist-warns-of-disastrous-house-price-crash-due-to-new-Government-lending-scheme

wotsthat

Reverse psychology - if people believe that HTB will cause a crash they also need to believe it'll cause a boom first. i.e. buy now.

The same with the silly narrative that Carney is going to play fast and loose with inflation i.e. spend now

EDIT - we might knock the Express but they seem to have managed to get an exclusive on the Royal birth - it's just not being reported in other media channels.

Graham_Devon

wotsthat wrote: »

Reverse psychology - if people believe that HTB will cause a crash they also need to believe it'll cause a boom first. i.e. buy now.

Really?

Quite a feat for all the papers to collude together in playing a game of reverse psycology on the nation.

wotsthat

Graham_Devon wrote: »

Really?

Quite a feat for all the papers to collude together in playing a game of reverse psycology on the nation.

You make it sound like it's wall to wall negative coverage.

Currently the two lead 'house' stories on the Express finance page are

THE UK property market is on a roll again and there could be plenty more price growth to come.

and

Property boost guaranteed by Help to Buy equity loan

both accompanied by pictures of happy homebuyers that could have come straight from a housebuilder's brochure.

They'll say whatever they need to say to gain readers and website hits. Have you noticed that commentators either think things are really good or really bad? The Express et al aren't interested in the middle ground.

cepheus

That more flesh was put on the bones of the Help to Buy scheme at a time when much of the media was distracted, however, has not stopped the criticism pouring in, with the chief economist at the Institute of Directors (IoD) calling the scheme “dangerous”..

This follows hot on the back of criticism of the scheme when it was proposed by the treasury earlier this year, with former United States secretary of the treasury Larry Summers saying the scheme went “against basic things taught in economics textbooks”.
And in June Albert Edwards of French bank Societe Generale called the policy “truly moronic”

“I believe it truly is a moronic policy that stands head and shoulders above most of the stupid economic policies I have seen implemented during my 30 years in this business,” he said.

Presumably, having refused to stimulate the economy with significant investment, Osborne is hoping for an economic recovery on the back of another housing boom.
As everyone apart from Osborne seems to realise, however, the last house price boom didn’t end particularly well.


http://www.leftfootforward.org/2013/07/help-to-buy-scheme-dangerous/

Conrad

cepheus wrote: »

however, the last house price boom didn’t end particularly well.

You're conflating the global banking crash with a UK property bust. Even so the property bust wasn't that bad anyway. The vast majority enjoyed cheaper mortgage payments and sustained their home.

UK property will always be cyclical, so what? This notion we cannot bare to have a typically small bust on the back of a wealth creating boom is really perplexing to me. By wealth creating I'm referring to all those that used their equity to form business' / start a guest house / let their out buildings as holiday cottages etc. I've seen it many times first hand.

Graham_Devon

wotsthat wrote: »

You make it sound like it's wall to wall negative coverage.

Well, thats because, put simply, it was....across nearly every main media outlet.