Help to Buy is nothing but an election ploy....

antrobus

Graham_Devon wrote: »

....Basically, this will be seen as a political project gone wrong...

I'm puzzled, what exactly has "gone wrong"?

CLAPTON

Scrootum wrote: »

I would suggest that Greece is a good example of politicians just pandering to what an electorate think they want.

Can end in disaster.

There are many example of politicians who refuse to acknowledge the democratic wishes of the people which have lead to all sorts of evils.

It is for opposition parties to make a case for change and to win the argument via the ballot box.

wotsthat

antrobus wrote: »

You're missing the point. That's HTB2 operating as designed. It is a "temporary measure" designed to deal with a "cyclical issue" in the mortgage market.

I'm not disagreeing. Fundamentally it's intended to deal with a particular problem in the mortgage market (excessive deposits) and until the private sector fills the gap it's going to be in place.

The OP asserts that HTB is an election ploy but, strangely for an election ploy, it's hugely unpopular and the momentum is building against it every day. However, he also asserts that it's politically impossible for the government to back track.

What I'm doing is trying to suggest a scenario whereby the government could take a U-turn and still spin it into good news based on the recovering economy when/ if HTB turns into a vote loser.

i.e. HTB serves a function but it's hardly a matter of such high principle that the Tories would continue with it if they thought dumping it would lead to more votes. Maybe in 2010 but not with the clock now ticking to an election.

The only thing that matters now to politicians is votes.

blinko

So what do you guys reckon if anything will happen in September, given all the calls against H2B even from Standard and Poor.

Will the chancellor be able to hold out.
Will they taper the amount of loan available to say 90%/300k
Withdraw the scheme altogether/exclude London

wotsthat

blinko wrote: »

So what do you guys reckon if anything will happen in September, given all the calls against H2B even from Standard and Poor.

Will the chancellor be able to hold out.
Will they taper the amount of loan available to say 90%/300k
Withdraw the scheme altogether/exclude London

With an election just 8 months away at that point the government will do whatever they think will be most beneficial in terms of votes.

Thrugelmir

blinko wrote: »

Will they taper the amount of loan available to say 90%/300k

Complete red herring. Try and find a lender who'll advance 95% on a £600k mortgage. This is where the media goes for fiction without understanding the facts.

CLAPTON

Scrootum wrote: »

Doesn't work like that though.
Greece for example needed to start collecting tax owed. Any politician that had campaigned on that basis would not have stood a chance due to evasion being so widespread.

how should it work then?

Graham_Devon

The IPPR has now said that help to buy risks undermining the economy.

The Institute for Public Policy and Research (IPPR), the left-of-centre thinktank, said the chancellor's attempts to increase business lending had been a failure and that by resorting to policies such as Help to Buy in the housing market he risked undermining the recent recovery.The IPPR's chief economist, Tony Dolphin, said: "A massive build-up in household debt before 2008 contributed to the depth of the recession in the UK. George Osborne was right when he said that we can no longer rely on ever-higher levels of debt for growth.
"It is an indictment of the failure of his attempts to boost business investment spending that, rather than encouraging a rebalancing of the economy, he now has to resort to policies that will increase its imbalances."

http://www.theguardian.com/politics/2013/dec/28/rising-household-debt-cause-for-alarm

Thrugelmir

Graham_Devon wrote: »

The IPPR has now said that help to buy risks undermining the economy.

Given it's a left of centre Think Tank hardly likely to be in tune with the Chancellors views.......

A year ago similar was being said. Yet the Chancellor appears to have made the right calls (so far ).

cepheus

Thrugelmir wrote: »

Given it's a left of centre Think Tank hardly likely to be in tune with the Chancellors views.......

A year ago similar was being said. Yet the Chancellor appears to have made the right calls (so far ).

What fuelling a credit led recovery where people are saving less, and house prices are spiralling in a corner of the country whilst people are being lured into a bubble with artificial low rates. It seems to confirm his incompetence. Neither does it say much for the success of this site in encouraging typical people to save.

......the recovery has been driven, on the OBR's analysis, by households spending a good deal more than it and other economists anticipated.

But, says the OBR, this has happened at a time when growth in real household disposable income has fallen from 1.6% to 0.5% - which, for what it's worth, is less than the growth in the real aggregate spending power of the household sector in the immediate post-Crash years of 2009 and 2010.

And, of course, these aggregate numbers paint a misleading and too rosy a picture of what's been happening to living standards for most British people; according to official figures, median or typical household income for those who haven't retired has fallen 6.4% since the 2008 debacle.

However the OBR's real household disposable income calculations and forecasts are a guide to the direction of travel, and the point is that 2013 is a year of slowdown in the recovery as it affects people.

Which begs the question why on earth we are spending more.

You know the trite answer: we are saving less