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Help to buy threat to the UK credit rating?
Comments
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Thrugelmir wrote: »The "problem" was created in the lending boom years 2003-2007. Help To Buy is merely trying to maintain a stable environment and maintain confidence. The switch to a repayment basis for majority of new mortgages will take time to filter through and have an effect.
Unless the government can engineer a massive increase in house supply, very quickly, then help-to-buy can only create instabilty, and a loss of confidence.
TruckerTAccording to Clapton, I am a totally ignorant idiot.0 -
Unless the government can engineer a massive increase in house supply, very quickly, then help-to-buy can only create instabilty, and a loss of confidence.
TruckerT
Why do you think it will cause instability and a loss of confidence.
The areas that seem to be "giving it some" are in demand and will continue to be so.
I think it will cause more problems, in those honey spots, as less people will be able to even get the HTB assistance in due course.
There will, no doubt be some unfortunates at the extremes, who will get burnt. A few more might get burnt, if they are only gambling or have unforeseen problems, but long term holds should be OK. They generally are with property."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
grizzly1911 wrote: »Why do you think it will cause instability and a loss of confidence
Because it simply tinkers with prices (and voters' loyalties) and does nothing to increase the availability of homes.
Because it supports the banks, to the exclusion of everyone else (but this will only become evident if and when the new credit bubble leads to a new crash).
Long-term holds are fine if that is what suits you, but negative equity is not a good reason for anyone to be forced into a long-term hold.
I don't really understand your third paragraph.
TruckerTAccording to Clapton, I am a totally ignorant idiot.0 -
Because it simply tinkers with prices (and voters' loyalties) and does nothing to increase the availability of homes.
Because it supports the banks, to the exclusion of everyone else (but this will only become evident if and when the new credit bubble leads to a new crash).
Long-term holds are fine if that is what suits you, but negative equity is not a good reason for anyone to be forced into a long-term hold.
I don't really understand your third paragraph.
TruckerT
ps - it is said to be increased demand which leads to higher prices, but there is enormous unsatisfied demand (want?) already, and HTB is simply creating an artificial ability to buy, and thereby increasing prices (as well as, for reasons which are genuinely unfathomable to me, a feeling of well-being amongst voters). We don't need Help-to-Buy, we need Help-to-Build.
TruckerTAccording to Clapton, I am a totally ignorant idiot.0 -
I don't really understand your third paragraph.
TruckerT
As HTB pushes up prices in the likes of the SE even more people will be priced out and even HTB won't help them.
I don't think negative equity will be a problem down that corner. I can see it being a problem elsewhere.
Something tells me it will be very difficult to wind this assistance down regardless of what has been said upfront.
Private house building/purchase alone will never meet the demand."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
grizzly1911 wrote: »Private house building/purchase alone will never meet the demand
I think that's the bit which is missing from the pro-HTBers' logic. They seem to believe that an artificially-generated house-price increase of a few percentage points will motivate the building industry into pre-crash levels of activity.
But the building industry has learned its lesson.
Maybe the government needs to, shock/horror, pay the builders to provide the housing stock which is needed. These government-owned houses could then be offered to all comers for sale or rent at proper market prices.
TruckerTAccording to Clapton, I am a totally ignorant idiot.0 -
HTB is simply creating an artificial ability to buy,
No.
HTB is restoring the traditional ability to buy with 5% to 10% deposits.
Same as it was 20 years ago, 50 years ago, and 100 years ago.
The 25% deposit scenario is the artificial and temporary situation.
Not HTB.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
the building industry has learned its lesson.
Well, yes....
They learned not to flood the market with stock while a house price crash rages on, as nobody can get mortgage finance and thus they'd bankrupt themselves if they did.
Shouldn't be a surprise to anyone with half a brain....proper market prices.
They'd be a lot higher than we have now.
The artificial crash caused by mortgage rationing has repressed prices for the last few years.
But that's ending now....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »No.
HTB is restoring the traditional ability to buy with 5% to 10% deposits.
Same as it was 20 years ago, 50 years ago, and 100 years ago.
The 25% deposit scenario is the artificial and temporary situation.
Not HTB.
The 25% deposit scenario was a creation of market/commercial realities.
HTB is a distortion of those realities.
TruckerTAccording to Clapton, I am a totally ignorant idiot.0 -
HAMISH_MCTAVISH wrote: »They learned not to flood the market with stock while a house price crash rages on
No - they've learned not to flood the market with stock when peoples' ability to buy is dependent upon unsustainable levels of credit availability.
TruckerTAccording to Clapton, I am a totally ignorant idiot.0
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