Taxpayer will give £1bn to help first-timers get a
Discussion
Fantastic. Having scrimped and saved for years to get together enough money for a deposit, sacrificing a social life, working all hours of the day and night and spending years living in shared hovels that make the Young Ones' place look like the Ritz, I now have to subsidise thousands of other people who feel that it is their right to have a house of their own as soon as they want one...
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2005/05/23/nhouse23.xml
Taxpayer will give £1bn to help first-timers get a mortgage
By Brendan Carlin and Sarah Womack
(Filed: 23/05/2005)
Up to £1 billion of taxpayers' money is to be spent subsidising mortgages to help first-time buyers own their home, Gordon Brown will announce this week.
The shared-equity plan, to enable as many as 110,000 more people to buy properties by 2010, will be coupled with an announcement from John Prescott of a significant expansion of house-building targets, to deflect fears of the scheme simply stoking house-price inflation.
The scheme will be open to any first-time buyer
There is already a publicly-funded shared-ownership scheme to help key public sector workers get on the property ladder, but it has had limited effect.
A report published last week by Halifax, Britain's biggest mortgage lender, said nurses, teachers and police officers had been priced out of the housing market in three quarters of urban areas.
The new scheme, to be unveiled on Wednesday, is a much more ambitious, Government-backed, shared-equity programme. It will be open to any first-time buyer.
Treasury sources suggested that "tens of millions of pounds" of public money would be set aside to set up and administer the plan, with the cost likely to be more than £50 million in a five-year period. However, there is no formal limit to the subsidy nor to the price of homes to which it will apply.
The scheme, which could involve couples having to raise as little as half the cost of a home, is the result of a deal struck between the Government and the Council of Mortgage Lenders.
Typically, buyers would have to find 75 per cent of the cost, with the rest of the equity shared equally between the Government and the mortgage lender, or possibly the house-building company. Buyers would pay a "rent" on the part they do not own, with the option to buy the whole stake.
Mortgage companies will administer the scheme but Treasury sources confirmed yesterday that the Government was effectively underwriting the deals. If the property price were to fall when a house was sold on, the Government would be the first in line to lose its stake.
However, a Treasury source said that the prospect of public money being lost overall on transactions was unlikely.
If anything, the Government would probably get back more than it had invested, the source signalled.
Speaking on the BBC yesterday, the Chancellor raised the prospect of one million more people becoming homeowners by the end of this Parliament, both from the new shared-equity plan and from other measures to encourage home-ownership.
Over time, three out of four people could own their own home, Mr Brown said.
Halifax welcomed the scheme, saying: "The housing market depends on first-time buyers. Without them, it slows down, so initiatives like this are very, very good."
Both the Council of Mortgage Lenders and the Home Builders' Federation greeted the plan, but added that more house building was also needed to stave off the danger of feeding house-price rises.
It is understood that in Wednesday's joint announcement with Mr Brown, Mr Prescott, the Deputy Prime Minister, will unveil new home-building plans, partly in line with the Treasury-commissioned Barker report which, last year, said England needed 1.4 million more homes than planned over the next 10 years.
A Government source said under Mr Prescott's plans, "there will be a target set for the numbers of new houses built each year. It will represent a significant increase on current arrangements".
George Osborne, the shadow chancellor, issued a guarded welcome to the shared-equity plan as in line with Conservative principles but gave warning that the scheme might be "too complex or restrictive".
Vince Cable, the Liberal Democrats' Treasury spokesman, accused Mr Brown of "reinventing the wheel", given that housing associations already had such schemes but had run out of money.
Adam Sampson, of the charity Shelter, said the plans could result in subsidy "being directed away from providing housing for the poorest, in favour of enabling people who very often already have adequate housing to profit out of home ownership".
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2005/05/23/nhouse23.xml
Taxpayer will give £1bn to help first-timers get a mortgage
By Brendan Carlin and Sarah Womack
(Filed: 23/05/2005)
Up to £1 billion of taxpayers' money is to be spent subsidising mortgages to help first-time buyers own their home, Gordon Brown will announce this week.
The shared-equity plan, to enable as many as 110,000 more people to buy properties by 2010, will be coupled with an announcement from John Prescott of a significant expansion of house-building targets, to deflect fears of the scheme simply stoking house-price inflation.
The scheme will be open to any first-time buyer
There is already a publicly-funded shared-ownership scheme to help key public sector workers get on the property ladder, but it has had limited effect.
A report published last week by Halifax, Britain's biggest mortgage lender, said nurses, teachers and police officers had been priced out of the housing market in three quarters of urban areas.
The new scheme, to be unveiled on Wednesday, is a much more ambitious, Government-backed, shared-equity programme. It will be open to any first-time buyer.
Treasury sources suggested that "tens of millions of pounds" of public money would be set aside to set up and administer the plan, with the cost likely to be more than £50 million in a five-year period. However, there is no formal limit to the subsidy nor to the price of homes to which it will apply.
The scheme, which could involve couples having to raise as little as half the cost of a home, is the result of a deal struck between the Government and the Council of Mortgage Lenders.
Typically, buyers would have to find 75 per cent of the cost, with the rest of the equity shared equally between the Government and the mortgage lender, or possibly the house-building company. Buyers would pay a "rent" on the part they do not own, with the option to buy the whole stake.
Mortgage companies will administer the scheme but Treasury sources confirmed yesterday that the Government was effectively underwriting the deals. If the property price were to fall when a house was sold on, the Government would be the first in line to lose its stake.
However, a Treasury source said that the prospect of public money being lost overall on transactions was unlikely.
If anything, the Government would probably get back more than it had invested, the source signalled.
Speaking on the BBC yesterday, the Chancellor raised the prospect of one million more people becoming homeowners by the end of this Parliament, both from the new shared-equity plan and from other measures to encourage home-ownership.
Over time, three out of four people could own their own home, Mr Brown said.
Halifax welcomed the scheme, saying: "The housing market depends on first-time buyers. Without them, it slows down, so initiatives like this are very, very good."
Both the Council of Mortgage Lenders and the Home Builders' Federation greeted the plan, but added that more house building was also needed to stave off the danger of feeding house-price rises.
It is understood that in Wednesday's joint announcement with Mr Brown, Mr Prescott, the Deputy Prime Minister, will unveil new home-building plans, partly in line with the Treasury-commissioned Barker report which, last year, said England needed 1.4 million more homes than planned over the next 10 years.
A Government source said under Mr Prescott's plans, "there will be a target set for the numbers of new houses built each year. It will represent a significant increase on current arrangements".
George Osborne, the shadow chancellor, issued a guarded welcome to the shared-equity plan as in line with Conservative principles but gave warning that the scheme might be "too complex or restrictive".
Vince Cable, the Liberal Democrats' Treasury spokesman, accused Mr Brown of "reinventing the wheel", given that housing associations already had such schemes but had run out of money.
Adam Sampson, of the charity Shelter, said the plans could result in subsidy "being directed away from providing housing for the poorest, in favour of enabling people who very often already have adequate housing to profit out of home ownership".
Mon Ami, I think that Bedford Rascal beat you to it yesterday morning:
[url]www.pistonheads.co.uk/gassing/topic.asp?h=0&f=141&t=180675[/url]
[url]www.pistonheads.co.uk/gassing/topic.asp?h=0&f=141&t=180675[/url]
mojocvh said:
However, a Treasury source said that the prospect of public money being lost overall on transactions was unlikely
Yep, and there's the crux, it's a gigantic state sponsored tennants association. You're never meant to actually "own" the house.
Ever.
MoJo.
More like HM Gov not to miss out on getting in on a slice of the Buy to Rent Market.
Note that they will benefit from the Capital gains as well over time.
So.....we pay for special brew and fags for the sports clad, and not giving people money for deposits. There is definately something wrong. My wife and I work out collective nuts off, have 2 children, house and mortgage. Trouble is, we are in the middle earning bracket which means we have to give most of it away.
I was talking to a well known malingerer that was in a custody unit the other day - we have known each other for years. He actually 'earns' more than me in benefits, is on disability benefits due to asthma - and smokes embassy regal fags - has 4 children, a 3 bedroom house which is larger than mine maintenance free. And pays nothing. His kids have free school meals, and I think he even has benefits for claiming benefits. He took great pleasure in telling me he has studied PC's wages and takes home £350 more than me a month.
I'm off for some special brew.Once upon a time "social" housing was considered OK. It had none of the stigma associated with "council" estates of today Indeed, decent, honest, hard working folk (like my parents) had no other option as they could never have afforded to buy a house back in the 1950s/60s.
Times have changed. Councils no longer have the ability to build "low cost" rental properties - they are barred from doing so by government rules.The estates that remain are usually inhabited by a large element of the "bottom rung" of society. Those hard working, but low earning, members of society find themselves caught in a trap - too rich to be allocated a place on the social housing list and too poor to embark on a proper house purchase.
Why not re-introduce proper council housing rental schemes instead of "first time buyer" schemes. After "x" number of years, many such council tenants might be in a position to buy a property of their own (as my parents were, eventually).
Indeed, the prescence of "normal", socially responsible people in such estates could actually help make them reasonable places to live again.
>> Edited by Eric Mc on Monday 23 May 08:54
Times have changed. Councils no longer have the ability to build "low cost" rental properties - they are barred from doing so by government rules.The estates that remain are usually inhabited by a large element of the "bottom rung" of society. Those hard working, but low earning, members of society find themselves caught in a trap - too rich to be allocated a place on the social housing list and too poor to embark on a proper house purchase.
Why not re-introduce proper council housing rental schemes instead of "first time buyer" schemes. After "x" number of years, many such council tenants might be in a position to buy a property of their own (as my parents were, eventually).
Indeed, the prescence of "normal", socially responsible people in such estates could actually help make them reasonable places to live again.
>> Edited by Eric Mc on Monday 23 May 08:54
einion yrth said:
anonymous said:[redacted]
Wasn't that a Thatcher policy?
Damn right. One of the biggest con-tricks ever pulled on the British Taxpayer.
Along with the selling off of public assets to a small group of private shareholders in order to fund short term tax cuts and buy elections.
But that's another thread....
>> Edited by alexkp on Monday 23 May 09:19
alexkp said:
anonymous said:[redacted]
Wasn't that a Thatcher policy?
Damn right. One of the biggest con-tricks ever pulled on the British Taxpayer.
Along with the selling off of public assets to a small group of private shareholders in order to fund short term tax cuts and buy elections.
But that's another thread....
>> Edited by alexkp on Monday 23 May 09:19
when you say "private shareholders" you really mean the family or whoever lived in the house.....
simpo two said:
House prices are only so high becuase interest rates are low because the BoE reduced them to prop up a faltering economy.
I'd propose two base rates; one for normal lending and one for housing. Then you could control both sectors independently.
Interesting idea, but totally impossible.
Mon Ami Mate said:
Fantastic. Having scrimped and saved for years to get together enough money for a deposit, sacrificing a social life, working all hours of the day and night and spending years living in shared hovels that make the Young Ones' place look like the Ritz, I now have to subsidise thousands of other people who feel that it is their right to have a house of their own as soon as they want one...
Could'n tagree more.
silverback mike said:
I was talking to a well known malingerer that was in a custody unit the other day - we have known each other for years. He actually 'earns' more than me in benefits, is on disability benefits due to asthma - and smokes embassy regal fags - has 4 children, a 3 bedroom house which is larger than mine maintenance free. And pays nothing. His kids have free school meals, and I think he even has benefits for claiming benefits
Throw in Sky and you’ve got a deal. Where do I sign?
tinman0 said:
alexkp said:
einion yrth said:
anonymous said:[redacted]
Wasn't that a Thatcher policy?
Damn right. One of the biggest con-tricks ever pulled on the British Taxpayer.
Along with the selling off of public assets to a small group of private shareholders in order to fund short term tax cuts and buy elections.
But that's another thread....
>> Edited by alexkp on Monday 23 May 09:19
when you say "private shareholders" you really mean the family or whoever lived in the house.....
No, I meant the investors who bought the Railways/BT/Water/Gas for peanuts and make a killing.
>> Edited by alexkp on Monday 23 May 10:49
Wouldn't it make more sense to bring in legislation to prevent banks from lending stupid amounts of money to buyers (like 6 times salary for example).
Result, house prices fall, particularly at the lower end of the market.
Ah, but we can't do that because of the enormous windfall that Gordon has had over the last few years due to ridiculous amounts of stamp duty.
Socialism my arse!
Result, house prices fall, particularly at the lower end of the market.
Ah, but we can't do that because of the enormous windfall that Gordon has had over the last few years due to ridiculous amounts of stamp duty.
Socialism my arse!
And of course it won't have the knock on effect, of kickstarting the housing market, PUSHing up prices even more. I a few years time 'new' firsttimers won't even be able to afford 'HALF' the cost, and then the governemnet will be subsidising even more...
PERFECT recipe for a HUGE property crash in a few years.
B
PERFECT recipe for a HUGE property crash in a few years.
B
And of course it won't have the knock on effect, of kickstarting the housing market, PUSHing up prices even more. I a few years time 'new' firsttimers won't even be able to afford 'HALF' the cost, and then the governemnet will be subsidising even more...
HAve the governmnet NEVER heard of 'unatended consequence' they have a brilliant history, of not spotting the blindly obvious effects of their actions
PERFECT recipe for a HUGE property crash in a few years.
B
HAve the governmnet NEVER heard of 'unatended consequence' they have a brilliant history, of not spotting the blindly obvious effects of their actions
PERFECT recipe for a HUGE property crash in a few years.
B
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