In UK, first-time buyers offered GBP 70K deposits by local councils

First-time buyers are being offered deposits of up to £70,000 by their local council to help them on the property ladder, with taxpayers footing the bill if house prices fall.

Source: Telegraph.co.uk

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CanuckDownUnder
Member
CanuckDownUnder
Meanwhile in Australia internet searches for "no deposit loans" are way up. But no luck: 'RateCity, a financial comparison website, said that at present there is only one loan product out of the 2000 it monitors that covers 98 per cent of a home purchase – Teachers Credit Union My First Home Loan. Otherwise, it says there are 95 per cent loans, that make up 59 per cent of all home loans that it monitors.' I love the subtle rent v. own comparison – the rent on the average Sydney home is predicted to rise by $33.60 but the weekly repayment on a mortgage is only expected to go up $23.47 a week. If you're only borrowing $300,000 for a house in Sydney you're putting down around 60%, not 5%. I don't think this applies to the typical renter. And… Read more »
patriotz
Member

The scheme designers, Sector Treasury Services, insisted caps would be set by each local authority.

http://www.sector-group.com/About-us.htm

At a time when the public sector faces significant year on year revenue decreases and a requirement to improve services, our combined specialist expertise, broad range of services and track record can play a material role in helping to bridge the gap.

Our expert advisors are drawn from both the public and private sectors and combine extensive skills and deep industry knowledge with a strong public service ethos. This combination allows us to provide a service offering designed to improve the effectiveness of financial management, maximise resources and understand and enhance the overall impact on costs, culture and performance.

What a joke.

Best place on meth
Member
Best place on meth

More government meddling in real estate.

This should be illegal.

tetra
Guest
tetra

grim news from the states,

New Home Sales Fall to Record Low in February
http://www.calculatedriskblog.com/2011/03/new-hom

Why there is such time delay with Canada regarding the house collapse? I don't understand.

registered
Member
registered

4 tetra Says: "Why there is such time delay with Canada regarding the house collapse?"

Harper.

bubbly
Member

@Best place on meth: Falling prices are de facto illegal. That's why they are doing this. Nobody cares about productivity and saving anymore…

Woodrow
Guest
Woodrow

Looks like the spring rate hike is out the window:

http://www.cbc.ca/news/canada/story/2011/03/23/el

jesse
Member

@tetra: @tetra: "Why there is such time delay with Canada regarding the house collapse?"

After listening to former finance ministers on CBC's The Current this morning it's pretty obvious: there is no public discourse over the impending problems with overpriced housing. Until it is generally recognized as a problem, politicians will not act on it as a broader theme to their campaigns.

If you want governments to care, suggest a way to shape the message such that the electorate can understand and agree with it. I would be pleased to hear any suggestions.

chip
Guest
chip

I was born there and lived there off and on over the years but the UK is a complete mess. They have 11 trillion pounds in debt and unfunded liabilities, a fifth of the population lives on some form of the dole and in most of the country the govt generates more than half of the GDP, yet in their wisdom the nobs at the local councils want to take a flyer on the housing market with yet more taxpayer-funded debt.

What can go wrong?

tetra
Guest
tetra

@jesse: "Until it is generally recognized as a problem, politicians will not act on it as a broader theme to their campaigns."

I am not convinced that the government is the reason for the time delay. Politicians did not act in the US or Ireland in order to rein their housing. It fell on it's own weight.

I am mostly leaning on Shiler intreprataion that high resource prices prevented house collapse. But still I don't understand how is that possible.

Flip Flop
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Flip Flop

It appears we'll be going to the polls soon. This is a great time to check out the Wikipedia page for your riding and get a feel for the competitive landscape.

Email the MPs for the 2 top parties that compete for the seat, and let them know the issues that are important to YOU.

Some of the ridings will be quite close, so if we all make some noise, maybe the CMHC issues will get some attention.

“Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has” -Margaret Mead

The Leak
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The Leak

that's sick.

Capitalism only works with periodic depressions.

jesse
Member

@tetra: "high resource prices prevented house collapse"

For provinces like Ontario with a significant manufacturing base that seems rather odd: their housing market took off like everyone else's in 2009, even with high unemployment.

I think to understand the lag you have to go back further to mid last decade. The US peaked in 2005 while Canada's housing market was still inflating. The first place I'd look is to compare the timing in changes in lending practices between the two countries.

Anonymouse
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Anonymouse

@jesse:

"Until it is generally recognized as a problem, politicians will not act on it as a broader theme to their campaigns."

From a campaigning perspective, it's not a problem when such a high proportion of voters are also home owners.

patriotz
Member

@tetra:

Politicians did not act in the US or Ireland in order to rein their housing. It fell on it’s own weight.

In case you didn't notice, housing also fell on its own weight in Alberta in Summer 2007 and in BC and Toronto in Spring 2008.

What was different in Canada from the US or Ireland is that the busts in those countries were too far advanced to be reversed by super low interest rates and government-ordered looser lending in late 2008 as happened in Canada. That's all.

pricedoutfornow
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pricedoutfornow
@Anonymouse: "From a campaigning perspective, it’s not a problem when such a high proportion of voters are also home owners." Yes, according to homeowners and politicians, who really cares if your house is overpriced? Great! We can all be rich rich rich! So what if our children go into massive debt to buy some crummy house? Which politician would really want to bring on the wrath of homeowners/voters by suggesting that house prices are too high? I wrote my MP and told him a nice story of a guy I know who has a $900k mortgage, thanks to the CMHC and the government of Canada. I pointed out that this guy has to rent out 80% of the property to make the mortgage payments, and still managed to qualify for a loan, despite the fact that he's never made more… Read more »
patriotz
Member

@chip:

a fifth of the population lives on some form of the dole and in most of the country the govt generates more than half of the GDP

Those of course are only the official numbers for those on the dole.

In reality the whole banking and RE industries in the UK are on the dole as they can continue their present operations only through the explicit backing of the UK and local governments, the topic of this thread being just the latest example.

The difference is that those on the official dole are treated with scorn while those on the unofficial dole are treated like royalty.

jesse
Member

@patriotz + @chip: Bloomberg: Banks Bring Jobs to London as Finance Pays Most Tax in U.K.

“We want London to remain a global financial center, and one that will continue to flourish and grow because of the employment it brings,” Treasury minister Mark Hoban said at a conference in the City of London last week. “We want to see more employment in the U.K., not less and I think a blooming financial services sector can help deliver that.”

I wanted to find the Private Eye article showing how the "most tax in UK" shtick is a "load of bollocks" but meh.

Devore
Member
Devore

@The Leak: Where do you see the "capitalism"?

jesse
Member
@Anonymouse: "it’s not a problem when such a high proportion of voters are also home owners" The reason I brought this up is because of the discussion I just heard on the radio surrounding budgets in fiscal crises. The issue Canada was facing in the early '90s was that its finances were in trouble and interest rates were high, making debt payments onerous. The country had to decide to implement "austerity" measures or risk ratings downgrades. The groundwork for austerity was laid by the Tories in the form of the GST. (Former Liberal finance minister John Manley acknowledged this multiple times in the discussion.) The GST was implemented at a time when the public discourse surrounding higher taxes was deeply unpopular due to an ongoing economic slowdown. Only after things started to recover slightly was the public mood geared towards… Read more »
Anonymouse
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Anonymouse

@pricedoutfornow:

"Of course no politician wants to admit that this could be a problem. But I’m sure they all see the writing on the wall."

I'm not disagreeing with you, just saying it'd be very tough to persuade home-owning voters that they need to see lower house prices. Turkeys voting for Christmas, and all that….

bubbly
Member

The banks and government want you to be in debt. A person without debt is dangerous – too independent.

The government also wants high prices ==> high revenues from property taxes!

Anonymous
Guest
Anonymous

@tetra: ….grim news from the states,

New Home Sales Fall to Record Low in February

….

Isn't it obvious what's happening? The US price drops are due to all those American folks selling their homes so that they can buy homes in Vancouver where the price never drops. Thank God for free markets! (cash is free right?)

VanRant
Member
VanRant

How much longer can this madness go on?

"The CMHC is a driving force in the housing market. But critics warn its policies could fuel a U.S.-style meltdown."

"CMHC’s balance sheet looks strikingly similar to both Fannie and Freddie"

“CMHC has distorted the housing market by making homes, especially ones that are on the pricier end of the spectrum, more affordable and encouraged a lot of people to get in over their heads.”

http://www2.macleans.ca/2011/03/23/a-mortgage-mon

tetra
Guest
tetra

patriotz Says: "What was different in Canada from the US or Ireland is that the busts in those countries were too far advanced to be reversed by super low interest rates and government-ordered looser lending in late 2008 as happened in Canada. That’s all."

That is too simplistic thinking. Super low rates were available in US and Ireland and other countries for the most part of the decade.

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