Labour plans for FTB ISAs

colsten

Details are still scant but apparently Labour are planning to build 125,000 houses in the course of the next parliament with money from the FTB ISAs, and by forcing banks to invest the FTB money into housing schemes.
http://www.bbc.co.uk/news/election-2015-32176740

I can't immediately see how all the required money could be raised through HTB ISAs, given that all people can put in is £15K over 5 years. The banks won't be keen on being told what to invest in, either - for starters, it flies straight in the face of free market principles. Presumably the government would also assume the risks for the returns in which case, if they have the funding, why don't they just launch some NS&I savings plans for prospective FTBs?

Can anyone shed any more light onto this?

EDIT: http://www.westbriton.co.uk/Ed-Miliband-unveil-bond-plans-125-000-new-homes/story-26281292-detail/story.html

This one says Milliband is talking about "a minimum of £5bn that can be unlocked". That can't just be FTB ISA money, can it?

PeacefulWaters

HBOS lent loads of money to property developers last time Labour were in power.

I assume Ed wants a repeat of what happened there ...

This one says Milliband is talking about "a minimum of £5bn that can be unlocked". That can't just be FTB ISA money, can it?

More made up numbers from a politician. £15,000 x 125,000 = £1.88bn.

Was it the Ed Miller Band who had a hit with The Joker?

Robert Mugabe would like this:

We won't let those large developers just hoard land, waiting for it to go up in value when it could be used to build homes. We'll say: either you use the land or you lose the land

Ed has a flawed plan here too. What happens when FTBs need to withdraw their deposit - which is inevitable?

That means, we'll put the money saved by first time buyers in the first time buyer ISA scheme to work.

OneADay

"taking money from banks" = "stealing from savers"

If he wants to build new homes, how about making the EU pay for them as its the influx from EU that is causing demand.

masonic

The Conservatives said the scheme was "ill thought-through".

As would most people.

colsten

OneADay wrote: »

If he wants to build new homes, how about making the EU pay for them as its the influx from EU that is causing demand.

now that is even more weird than the Labour plans.

Archi_Bald

Sorry, can't help with any clarification. But I am horrified by the statement that Labour would instruct banks on how they need to invest these savings.

If I was a bank/BS, I would

1. not offer any of these ISAs, on the grounds that it would cost me too much to administer them
   
   
2. instead offer first time buyers savings accounts with attractive interest rates / incentives if they take out a mortgage with me. Same sort of accounts that some building societies have been offering for some time.

ColdIron

Miliband has shown his intentions of market intervention several times in the past. I don't suppose there is anything compelling the banks to offer these products, or make them attractive even if they were coerced to do so

Coveredinbees!!!!

Where exactly is he planning on building these 1000's of new homes?

Thrugelmir

We won't let those large developers just hoard land, waiting for it to go up in value when it could be used to build homes. We'll say: either you use the land or you lose the land

Where's the evidence that this is what they actually do?

More anti business rhetoric.

themanfromamarillo

Frankly the whole HTB ISA scheme is daft government manipulation of the housing market. At least this (and the original, new-build HTB scheme) are trying to solve the supply problem of housing rather than jacking up demand. Although frankly the 125k new homes is puny compared to the massive number of new homes that need built. None of the major parties are proposing anything like a suitably bold solution to the housing crisis.

PeacefulWaters

Thrugelmir wrote: »

Where's the evidence that this is what they actually do?

More anti business rhetoric.

I'd assume they prioritise which land to develop next with land value, local building costs and end sale values part of the equation.

Given that most undeveloped brownfield plots in my area are council owned the threat of the state stealing land legally owned by builders is genuinely alarming.

themanfromamarillo wrote: »

Frankly the whole HTB ISA scheme is daft government manipulation of the housing market.

I agree to a point, but at least this encourages people to save up a deposit.

At least this (and the original, new-build HTB scheme) are trying to solve the supply problem of housing rather than jacking up demand.

There are regions in the country where there isn't a supply problem. Better regional policies would be better than more house building.

Although frankly the 125k new homes is puny compared to the massive number of new homes that need built. None of the major parties are proposing anything like a suitably bold solution to the housing crisis.

Farage would argue he's got the solution to reducing demand. But you did say "major" parties.