Rightmove August -1.8% MoM +5.5% YoY

Graham_Devon

mystic_trev wrote: »

Thanks

I wonder what bubble he's talking about? He was saying prices were sustainable in 2007.

If stage two of help to buy goes through (and I can't see why it won't) there's no doubt house prices will rocket. I can see rises of 10% with SE (and Aberdeen ) hotspots rising as much as 20% Looks like an Election winner for the Conservatives. What happens once the 'help' is removed, who knows?

It won't be removed IMHO. Not all at once anyway. Politicians are already talking about it, and the basic idea, if it goes ahead (which many are warning it shouldn't, including Fitch rating agency - so could be hurdles there if they continue with it) is that to remove it, they would have to extend it for several years, slowly reducing the guarentee as they go.

So what starts out as a 3 year plan would most likely turn into a 10+ year plan, with say 3-5% removed every 3 years from the guarentee.

Once it's in place, stopping it, and removing a 20% guarentee from the marketplace at a time prices have ramped up on the back of it could cause the mother of all crashes, especially, as, as is likely, interest rates are rising at the same time. On current speculation, the guarentee would be removed slap bang in the middle of interest rate rises. The first move on interest rate rises is said to be around 2016 if current paths continue. The scheme would be removed in 2017....

Hence they simply wouldn't be able to remove it. Not while all those people who bought into the first stage of help to buy were facing the calling of their loan, higher interest rates etc etc and everyone else is seeing their fix bought now coming to an end and interest rates increasing.

It's playing with a fire for which we don't currently have a suitable extinguisher.

Thankfully, the calls to axe the 2014 scheme are coming thick and fast. From conservative bank benchers, to the conservative home blog, to rating agencies, the CBI, even down to the estate agency groups, who would presumably prefer steady work rather than a load of work and then nothing when it all goes wrong again.

Though it has to be said there is still support from the BCC and housebuilders, the BOE and the government.

Lets put it this way, the US version of the scheme were playing with blew up pretty famously!

wotsthat

Graham_Devon wrote: »

Hence they simply wouldn't be able to remove it. Not while all those people who bought into the first stage of help to buy were facing the calling of their loan, higher interest rates etc etc and everyone else is seeing their fix bought now coming to an end and interest rates increasing.

I don't really see why the scheme can't be removed just because other people are on it. Like any other incentive scheme really - they start, they run, they stop.

Just because someone has signed up to a loan really has no bearing as to whether or not someone else gets a loan.

The scheme will just fade away as the economy recovers and people are able to secure better deal from a builder by having a bigger deposit.

Graham_Devon

wotsthat wrote: »

I don't really see why the scheme can't be removed just because other people are on it. Like any other incentive scheme really - they start, they run, they stop.

Well, the reasons given in the article I was listening to is that you will remove a large chunk of demand from the market overnight and that will lead to a sharp fall in activity and therefore prices.

Imagine if funding for lending were removed tommorow. The low rate mortgages would dry up again and the supply of mortgages would contract.

Were just as stuck with funding for lending, as you cannot turn off a tap and expect the water to carry on flowing.

CLAPTON

the HTL equity loans are constrained by a limit

Graham_Devon

CLAPTON wrote: »

the HTL equity loans are constrained by a limit

So was funding for lending.

The limit is simply extended, as we've witnessed.

HAMISH_MCTAVISH

Graham, you've already been told dozens of times.

These schemes are government doing its job to repair a broken and dysfunctional lending market.

When the market has been repaired, the schemes will no longer be required, and can be withdrawn.

If the market has not been repaired at the scheduled end of the schemes, they can and almost certainly will, be extended.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Graham, you've already been told dozens of times.

Anbd you can tell me dozens of times more.

The schemes are not the "government doing their job" at all.

Read your post again anyway. Basically you are stating that these scheme are repairs. You then go on to state if the system is not repaired with these repairs, what we shall do is repair them again with the same repairs.

Doing the same thing and expecting a different result....

HAMISH_MCTAVISH

Graham_Devon wrote: »

Doing the same thing and expecting a different result....

Indeed.

Like all your doom-mongering threads that have have failed to materialise in reality.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Indeed.

Like all your doom-mongering threads that have have failed to materialise in reality.

This is the problem though Hamish. You state something, and then when questioned resort to an ad homien almost every single time.

It's a very simple point. As you state, you keep "telling us", that these are all just "repairs" by the government "doing it's job".

Yet you then state that if these repairs don't work, they will do it again.

So how exactly are they doing their job, if they are using "repairs" that don't, in your own words, repair the economy and therefore, need to simply be extended....hoping that somehow, what's not working, will work....well, sometime.....hopefully.....and if that doesn't work, we'll just do it again.

HAMISH_MCTAVISH

Graham_Devon wrote: »

This is the problem though Hamish. You state something, and then when questioned resort to an ad homien almost every single time.

"ad hominem" Graham....

You should probably learn to spell it first, and then I'd recommend learning the correct usage.....