Govt to announce Stamp Duty Cut for first time buyers

mrginge

11) the ‘pointless’ degrees help to subsidise the more expensive to run ‘useful’ degrees. When the former have been binned, who’s funding the gap on the latter?

Thepurplescope

Assume any announcement would have to be actioned immediately to prevent an almost complete cessation of the FTB market until it came in to practice?

Windofchange

12) What happens to your beloved house prices if we do build 700,000 new homes a year somehow and therefore the supply goes through the roof?
13) If in say 10 years you do manage to build 500,000 houses a year, giving you an extra 5 million houses somewhere in the UK, what happens to prices when these people want to upsize to a family home? What do you suppose would happen to the price of property if 5 million homes hit the market in the next 10 years?
14) Where do you intend to build 5 million houses?
15) How are you going to police an entire new housing estate of 100,000 say party loving 18 year olds stacked ontop of one another? Do you feel there will be a huge increase in crime and nuisance from putting a load of hormonally charged human beings in a small place?
16) What about those who say I don't want to go to university, but I want to take a couple of years out travelling for instance? Do they lose their £30k?
17) How long do you see this scheme running for? Forever? If not, is it right for a small snapshot in time to get £30k free and then everyone else nothing?
18) Do you still give your £30k to the off spring of millionaires? If this is about saving money then would you still give it out to people who's parents may well just buy them a house anyway?
19) What happens 15 years down the line say when lots of these 18 year olds are now in their late 20's / early 30's and want to sell up? Are you going to have huge wastelands of small flats and studios because 3 million need to sell but there are only 700,000 new 18 year olds to buy?
19b) Again, related to the above, how much do you presume a 100k starter home will be worth then when there are another 7 million identical ones on the market? Has the taxpayer then maybe taken a massive hit of negative equity?
20) How many well paying non degree jobs do you think can be sustained? If lets say 50% of 18 year olds choose uni, 50% house, can you create 350,000 menial jobs a year that don't require degree level education? If so, where? That's a lot of McDonalds to open. Does the taxpayer fund apprenticeships and the such ontop in order to get these people in work? If so, again, who pays and how?

Windofchange

I'm off out shortly, but seeing as it'll take another 5 mins or so:

21) How high do you plan to stack em to get your 700,000 new homes built each year, and how will you overcome current planning regulations around height of buildings and green belt useage say?
22) Related to the police above, how will you provide the infrastructure to all these new places? Where does the money come from to fund new hospitals, schools, teenage pregnancy services etc?
23) What do you plan to do when there are large amounts of defaults? How do the banks swallow the losses given what happened with sub-prime in the last financial crisis, and let's face it, the vast majority of teenagers would be very much in the sub prime category!
24) Should these toxic debts hit the UK economy at large, how are you going to stop it bringing about another 2008 seeing as what you want to do in essence is create a huge amount of sub prime risky lending?
25) Is this idea going to create a very quick and very destructive boom and bust? 700,000 kids suddenly have money for a house, pile in pushing prices up initially as the supply isn't there, and then lose their shirt as you put another 5 million homes in place over the coming years?
26) Is tampering with a supposedly free market a good idea? Previously you have mocked me for suggesting that nurses should be able to buy somewhere half decent on a single salary and here you are suggesting we give 18 year olds £30 grand to do exactly that.
27) What effect does this have on the aspirations of the young? Do they drop out at GCSE illiterate and have a few children because they can get their windfall at 18 and be minted.
28) If we become a nation of massive home ownership with low intellectual ability, what happens when there is nobody to pass on your starter home to? As per the above, do you then see a huge crash in prices? University educated types wanting prime london rentals and the party lifestyle - millions of others wanting to sell up in slums with 24/7 partying and drug problems?
29) Isn't this kind of what Thatcher did in the 80's by initiating right to buy (another thing that you have taken issue with in the past). How has that worked out? Has that increased the amount of social / cheap housing available, or lead to the worst housing crisis this country has ever seen? You in essence have handed large sums of money to the poor through discounts, and has this lead to hoards of them becoming wealthy?
30) Do immigrants to this country also get included in your free cash bonanza? Will this cause a further huge wave of immigration as word gets around sub saharan Africa that the UK is dishing out a cool £30k to every 18 year old? If maybe this does lead to an influx of young refugees heading here, how do we pay for that?

Windofchange

Reckon that is a reasonable 30 or so reasons why this is perhaps the worst idea you have ever had, and you've had some corkers! I reckon 50 is achievable if the bright lights of Clapham weren't calling me.

GreatApe

Windofchange wrote: »

Please do, it'll be hilarious.

1) How does an 18 year old service a mortgage? With his pocket money?
They do not have to buy at 18 they can use the sum at any age upto 35 the sum would be indexed to CPI. In a lot of cases I suspect the young ones would not need any mortgage. For instance two young adults could put their £60k together to make £120k that £120k is enough to buy a starter home in most the country. For example you can buy 3 bedroom terrace in birmingham for £120k

1b) How does an 18 year old get a mortgage? Are you going to force banks to lend them whatever regardless of risk?
As per the above it would not be available just on their birthday they can make use of it anytime upto age 35.

2) What if, shock horror I know in your world, house prices go down? Where is your return on investment for the taxpayer then? Negative equity is very real in lots of parts of the country
About half of the loans would be paid off via income. A lot of the rest would be partly paid off. Those that still have an outstanding debt will be paid off on sale of the property or death. It would be extrmeely unlikely that there would be many people who do not pay it off in full. Compare that to student loans for an education where the tax payer accepts that half wont pay it off so its a much much better bet for the tax payer than is education. Also I am sure many will opt to buy even more expensive homes becuase lots of people do well in life. And most people who do not pay it off would have had the loan for about 70 years

3) As per when you previously brought this up, where are you going to find £21,000,000,000 annually to fund this? Ontop of this, where are you going to find the money to backdate this for everyone under 30? £100 billion plus bill to start off with?
Same magic money tree that is funding the university tuition and maintenance. Also unlike the student loans where half wont be paid back and need to be written off with this I much less than 1% will need to be written off. Also lots of savings in other parts of government expenditure. And as already mentioned the government are offering the young £1k a year via the LISA upto £32k and that is a gift a 100% cost while my idea is a £60k loan 99%+ of which will be paid back

4) How are you going to subsidise 18 year olds to get a 400 grand mortgage for a starter property in London / S.E, or are you going to demand they all move up north?
A starter property in London is closer to the £300k mark, if the kids get £60k each that works out as a 40% deposit. In the SE a starter property is closer to the £200k mark which would be a 60% deposit. The remainder they will need to fund the way they fund it now, savings, family, mortgage etc.

5) In relation to the above, what impact will this demand have upon society in the south?
None of us know for sure but my central estimate is that there would not be a big uplift in demand. There would be more demand from owners but less from renters. Overall demand would only increase if these owners decide to live less dense than 2.35 people per property which is unlikely. And I would not mind the second home stamp duty surcharge going up to +6% from the current +3% if we see house prices rising more rapidly than they would have. In fact I would have the second home surcharge vary depending on the size of the private rental stock. Above 25% private rental increase the surcharge to +10%. Above 20%
private rental have the surcharge at 6% and above 15% private rental have the surcharge at +3% and if the private rental market is at or below 15% of the stock have 0% surcharge

6) Where are you going to find some 700,000 new houses / studios each year for these people to buy?

There wont be that much demand you numpty. For a start contrary to your protesting FTB numbers are quite healthy. Something like 350,000 properties are bought by FTBs each year. If you say most of those are couples eg 70% couples then you have ~600,000 young ones becoming home owners each and every year. By comparison there is about 900,000 in each age group.
So while you think no young people are buying, the truth is something like 600,000 / 900,000 = 67% of them are buying their own homes. Of course this idea might take them up towards 95% of them buying their own home so it would be an increase in demand of ~280,000 more FTBs or 150,000 more FTB purchases annually (as most will be couples).

So you need to cry where are the additional 150,000 homes going to come from (not 700,000 you numpty). And the answer is easy there will be ~150,000 fewer landlord purchases. These young adults without this idea need to rent privately which is what a lot of young people do. With this idea they no longer rent privately.

Understando?


7) How are you going to deal with the political unrest of giving a huge amount of money to one part of the population whilst cutting welfare, pensions, social care, NHS etc etc?

But we already do this, if you are 18 you can open a LISA and get £32k gifted to you GIFTED. My idea is much cheaper its a loan of £60k of which 99%+ will repay it. And you are not giving away money you are loaning it. IT would also imo save a huge amount of money longer term via lower benefits and not to mention young ones having a lot more money (no rent no mortgage) so can spend it into the economy creating further jobs.

8) At what age can someone sell their house? Who takes the profit if there is any?

The loan would be portable so they could move from home to home. If they sell then the government gets the outstanding loan back. Generally I do not think many would sell to rent.
However that can be solved too, for instance if the couple have £50k of their government housing loan remaining and they decide to sell their home the government get the £50k back. If they buy again in the uk within say maybe 5 years they can reaccess that £50k loan on their next purchase.

8b) Given teenagers / early 20 somethings are notoriously socially mobile, what when they need to move to take a job? Go travelling? If you have set an age that they can't sell before, how do you mitigate this? Allow them to rent it out? How do you ensure they get a BTL mortgage? How do you ensure no empty periods leaving our travelling 18 year old with a £1000 mortgage bill they can't pay that month?

Its not a huge problem homeowners on average move just once in their lifetime and the typical house only transacts once every ~25 years. The loan can be portable in the way most normal mortgages are portable. If they wanted to sell the loan would be repaid and they can access it again when they purchase.

Not many people default on their mortgages its very very rare so these would probably be the same. Either way its much better than the 50% default rate on student loans. Put a kid though £80k photography education and see them default on 100% of it or let two of them couple up and buy a 3 bedroom terrrace in birmingham and see 99% of them repay and also cost the government a lot less over their lifetime in benefits and tax credits etc etc

9) What happens to the UK education level if everyone stops going to uni? Even easy degrees (and I will agree with you on one point here that there are some pointless degrees) teach some form of reasoning, dissertation writing, critical appraisal etc.

My guess is university attendance would fall towards 10% of the population and almost all of them would be useful courses that repay in full and add value and income to the person eg I do not see a single medical school closing down!

The next question is would the country be worse off if university education went down from 50% of the population to 10%. I dont think so I went to one of the best universities in the country and did a very numare job and now am quite wealthy but my degree did not play any role in it. Overall I do not think universities add much value and also the kids are not going to be dissolved into the either for 3-4 years. The jobs they take and the life they live will add to their skill and knowledge. I have learnt more since university than while I was at university


10) What impact does closing all but 10 universities say have on employment in areas? Lecturers? Cleaners? Entertainment and nightlife? Admin staff? Student buy to let? How many 100's of thousands of people do you think would be out of a job without a large student population? What impact would that then have on the economy?

My view is that 80% of university places are surplus to requirement and add almost zero value. So its like if we had a £30 billion a year industry in digging holes and filling them up again and I propsoed we stopped doing that and you come back at me with well what the hell is going to happen to all the hole diggers and fillers? They will just get jobs in something productive. The kids would have ~£3-4k more spare cash each (no rent/mortgage)
and whatever they spend that money on is where the capital and man power of the lost university workers will be deployed.

That has taken about 10 minutes. I'm sure we can add more in your newly created thread.
Thanks for your concerns but I dont think any of them are valid

Answers in green

GreatApe

mrginge wrote: »

11) the ‘pointless’ degrees help to subsidise the more expensive to run ‘useful’ degrees. When the former have been binned, who’s funding the gap on the latter?

Well thats !!!! isnt it

Lets charge and lumber a photography student with £80,000 debt so that £10,000 of it might be funneled into the medicine department? Great idea!

I would rather up the funding for the medicine department by £10k rather than charge a photography student £80k so that I can funnel £10k of it into the medicine department

Assuming what you say is true, it needs fixing not the funny money trickery accounting that you are saying exists

GreatApe

Windofchange wrote: »

I'm off out shortly, but seeing as it'll take another 5 mins or so:

21) How high do you plan to stack em to get your 700,000 new homes built each year, and how will you overcome current planning regulations around height of buildings and green belt useage say? Already shown you its closer to +150,000 additional FTB property demand. This will come from roughly 150,000 lower demand form landlords
22) Related to the police above, how will you provide the infrastructure to all these new places? Where does the money come from to fund new hospitals, schools, teenage pregnancy services etc?There wont be additional need for many more housing due to this policy. However there is a need for more housing due to divorce and more singletons as things stand. Where will that housing come from? Well we have a positive savings rate and we are building some 2 million homes a decade
23) What do you plan to do when there are large amounts of defaults? How do the banks swallow the losses given what happened with sub-prime in the last financial crisis, and let's face it, the vast majority of teenagers would be very much in the sub prime category!Even in the crash UK defaults were never large amounts it was a tiny fraction of the mortgaged stock
24) Should these toxic debts hit the UK economy at large, how are you going to stop it bringing about another 2008 seeing as what you want to do in essence is create a huge amount of sub prime risky lending? Half of the money given to students will be defaulted on.
There is little change that more than 1% of the loans given to the kids for housing will be defaulted on. How can you think this is not much less risky than giving a dance student £80k to frolic around for 4 years??
25) Is this idea going to create a very quick and very destructive boom and bust? 700,000 kids suddenly have money for a house, pile in pushing prices up initially as the supply isn't there, and then lose their shirt as you put another 5 million homes in place over the coming years?As already explained you pulled 700,000 annual home purchased out your bum
26) Is tampering with a supposedly free market a good idea? Previously you have mocked me for suggesting that nurses should be able to buy somewhere half decent on a single salary and here you are suggesting we give 18 year olds £30 grand to do exactly that.£60k each you should be happy the nurses will be able to buy with 0x income
27) What effect does this have on the aspirations of the young? Do they drop out at GCSE illiterate and have a few children because they can get their windfall at 18 and be minted.That would be much better than doing the dance degree. With the dance degree which you do not object to your not getting a penny of that £80k back. If the kids couple up and buy a 3 bedroom for £120k outright with their government student loans then there are two big positives. First you are likely to get a lot more of it back likely 100% of it and secondly these types of people end up like that no matter what do its better to get 100% of the loan back on death/sale than it is to pay 60-80 years of housing benefits for them!
28) If we become a nation of massive home ownership with low intellectual ability, what happens when there is nobody to pass on your starter home to? As per the above, do you then see a huge crash in prices? University educated types wanting prime london rentals and the party lifestyle - millions of others wanting to sell up in slums with 24/7 partying and drug problems? Universities add little to nothing to IQ the data already shows that the best way to predict your outcome is not to look at your university attainment but your A-levels attainment
29) Isn't this kind of what Thatcher did in the 80's by initiating right to buy (another thing that you have taken issue with in the past). How has that worked out? Has that increased the amount of social / cheap housing available, or lead to the worst housing crisis this country has ever seen? You in essence have handed large sums of money to the poor through discounts, and has this lead to hoards of them becoming wealthy?Incorherent
30) Do immigrants to this country also get included in your free cash bonanza? Will this cause a further huge wave of immigration as word gets around sub saharan Africa that the UK is dishing out a cool £30k to every 18 year old? If maybe this does lead to an influx of young refugees heading here, how do we pay for that?I am suggesting £60k.
No migrants wont get it. It can be done so it is on the number of years you have lived in the uk between ages 0-18 for each year it can be say £3k. So unless a migrant comes here age a few months old then they dont get. Also you do not deny the migrants the opertunity to do the dance degree for £80k of which you dont get a single penny back so why deny them the housing?

Repose in red this time

GreatApe

WindofChange if I do a specific thread for this please dont spam it. If you have valid points feel free to discuss but do not spam. Have a read of the replays here and if you still have concerns bring them up but dont repeat nonsense like this idea adding +700,000 to annual housing demand as shown already its closer to +150,000 annually and almost all of that would be provided by ~150,000 lower demand from landlords.

One way it will add demand is if people decide to move out of their parents homes sooner than they otherwise would that is hard to model. If they moved out 2 years sooner on average that would add about 3.4% to housing demand. That would be roughly 1 million more homes needed but over a period of 60 years = ~17,000 more homes per year.

Where will that additional demand come from?
Well we will have to build more and the government wants to reverse the tend of later age FTBs so this would be a way of doing it. It would also move demand out of inner/central London as inner London has a lot of universities. That would overall be a good thing free up housing for London workers rather than dance students moving in from wales into zone 2 London housing displacing people with their £80k student loans. With this housing student loans they can stay in wales and buy a house there (or anywhere else they choose)

Windofchange

GreatApe wrote: »

Blah Blah Blah

How's the newly created thread going? A flood of forum members having a lively debate on a fantastic / edgy new idea, or is the entirety of this board (except your partner in idiocy economic) sat infront of their computer...