Help to Buy is not causing a housing bubble

Thrugelmir

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Halifax’s first 1,000 mortgage approvals came from 5,000 applicants, so despite the guarantee from the government, and the strict application criteria for the guarantee, Halifax have a low acceptance rate. This indicates that the credit underwriting that they apply is of an even higher standard than their general mortgage book.

Nothing new. Underwriting has been tightened over a period of time. Incoming impact of the Mortgage Market Review which take it to yet another level.

grizzly1911

CLAPTON wrote: »

Yes of course they are subsidised in the literal sense but one has to distinguish between cause and effort, between intentions and results.

They are only subsidised now, not because they need to be, but because the state has constructed a multi-layed complex subsidy system that prevents the natural economic forces to work such that they wouldn't need subsidy.

So because we subsidised rents we created higher rents which means we need higher subsidies for wages etc.

Supermarkets are indeed subsidised because the workers need to pay high rents but they are only high because of the HB subsidies.

Each feeds on the other.

Many of the results are perverse: the unemployed and unemployable are assisted at the expense of normal working people.

Stop the cycle and things will improve.

Then we won't be subsidising supermarkets.

In an ideal world perhaps this would be a perfect outcome.

The difficulty comes in severing that subsidy and waiting for the market to actually start working, if in fact it would. Many vulnerable people are likely to be severely affected in the interim.

There may be sufficient capacity, lag and imported or itinerant desperate labour that the market doesn't need to adjust.

CLAPTON

grizzly1911 wrote: »

In an ideal world perhaps this would be a perfect outcome.

The difficulty comes in severing that subsidy and waiting for the market to actually start working, if in fact it would. Many vulnerable people are likely to be severely affected in the interim.

There may be sufficient capacity, lag and imported or itinerant desperate labour that the market doesn't need to adjust.

sadly many vulnerable people are currently severely affected

Conrad

Thrugelmir wrote: »

Nothing new. Underwriting has been tightened over a period of time. Incoming impact of the Mortgage Market Review which take it to yet another level.

As before, this will lead to people being declined and ending up in a landlords dinner plate.


Regulation has lost site of the bigger picture in it's zeal to bring about fair outcome's for customers. What is fair about having t rent for long periods?


You just wanna see some of the people working at the FCA, they're like automotons speaking of 'regulated mortgage contracts' and 'fair consumer outcomes' with little sense of the real world impact their bureaucratic wet dreams result in.


Before anyone says it, this is GOOD news for someone like me, but bad news for consumers.