They're all at this week, on the subject of repossessions and evictions and so on:
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First up, Nick Clegg:
Liberal Democrat leader Nick Clegg said: "The much-publicised Homeowner Mortgage Support Scheme announced last year has not yet helped a single family in trouble. The prime minister's wasteful complacency means that millions of extra families could be added to already full social housing lists."
Sorry mate, but when a home is repossessed, is it promptly demolished, or does the bank eventually sell it on for a lowish price to somebody who can afford it, so that's a different family OFF the waiting list? Isn't it a zero sum game?
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As an aside, there's a bit of Indian Bicycle Marketing in there as well. In the blue corner...
Shadow housing minister Grant Shapps said the [Homeowner Mortgage Support Scheme] which was meant to help people facing a sudden drop in income defer mortgage payments, was announced with such a "flourish" it had even "upstaged" the Queen's Speech on the same day. But the details had not been fully worked out and lenders had not signed up to it to the extent Mr Brown had claimed, Mr Shapps alleged.
... and in the red corner ...
Cabinet Office minister Liam Byrne said the government's "goal" was to get the scheme "up and running in April" but he stressed there five other ways in which the government was helping people struggling with mortgage payments... He contrasted the government's approach with that of the Conservatives, who he claimed would "do nothing" to help people through the recession.
So at least Labour have some sort of plan, as expensive and damaging as it may be, even though they have, literally done nothing. The Tories then accuse them of doing nothing (but without committing themselves to saying whether they support or oppose the idea) and then Labour hit back by saying that the Tories wouldn't do anything either, but I digress.
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Returning to the New Maths, next up is the Council of Mortgage Lenders
The number of homes in the UK repossessed by lenders rose last year by 54% to 40,000, according to the Council of Mortgage Lenders (CML). Despite the recession, the CML said this was fewer than it had originally predicted, but it expects repossessions this year will reach about 75,000. It said lenders were making "strenuous efforts" to ensure repossessions were a last resort.
This reminds me of the article in the Daily Mash, Price of gas to rise, say men who set the price of gas. Presumably the CML are trying to put pressure on the government to bail them out a bit?
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And let's see what a fakecharity has to say:
There has been a "steep rise" over the last six months in numbers of tenants evicted after landlords defaulted on mortgages, Shelter has warned. Tenants can get just days' notice to leave their home, says the charity, which wants ministers to "act quickly to give tenants far, far longer".
As a tenant, I'd quite like to see a rule that my landlord's mortgage lender has to give me a month's notice to quit (or even better, simply offer to sell me the house), so that I can recoup my deposit by simply not paying the last month, but hey, they are indulging in fact-free maths. How 'steep' is 'steep'? How many such cases are there? The article doesn't say and the relevant press release doesn't appear to be on Shelter's website either.
Shelter get £12 million a year from the government (see bullet point 5 here) so it's hardly surprising that they toe the government line and call for much more homebuilding, which IMHO is a good idea, but for some reason very unpopular with existing homeowners, hey, that's politics.
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To round things off, how about a bit of total economic illiteracy from The Progress Group:
An influential Labour Party group is urging the Government to freeze stamp duty for the rest of the year on houses worth up to £1 million as part of a massive economic boost. The Progress group - whose members include Cabinet ministers Ed Miliband and Andy Burnham - was also calling for a £1,000 tax credit to home buyers ...
Ho hum. As there is a fixed supply of housing and first time buyers have fixed budgets, giving them all £1,000 will merely increase the price that they can pay by £1,000, thus pushing up the price of houses by £1,000, so that £1,000 subsidy actually accrues to people selling homes (and who are probably paying the extra tax to fund it) and the equilibrium does not change, ditto Stamp Duty reductions.
... Both ideas form part of a £20 billion stimulus for the economy in order to ensure this year is "the bottom of the recession".
Sorry chaps. You cannot magically put £20 billion into the economy without taking it out as tax. Seeing as all taxes (except Land Value Tax) have deadweight costs, £20 billion in taxes reduces the size of the economy by (say) £25 billion, and because the government spends money so inefficiently, their £20 billion spending will only increase the size of the economy by (say) £15 billion, so what they are actually proposing is taking £10 billion out of the economy.
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Sure, we'd like to get the recession over with ASAP, I posted my Five Point Plan at comment 10 on this thread over at HousePriceCrash. As my plan is based on honesty and economics, none of it will ever happen, of course, which is why the recession is set to drag our for years and years rather than months. But if that's what people want ...
We don't need no stinkin' objectivity
31 minutes ago
6 comments:
Mark, as you said of the Progress Group (sic) - total economic illiteracy. It's astonishing that (quite apart from the points you make yourself) they want to encourage people to start pouring their money into deliberately overpriced assets, and think this will effectively abolish the recession. Why don't they just say "a bribe to get people to vote Labour, combined with PR efforts (not even worth dignifying with the word lies) to claim that the worst is all behind us now." Of couse, they are only essentially following the leader, whose brilliant statement that there is nothing wrong with 125% mortgages so long a people can afford them now wants to write the lending terms (no 100% mortgages, you must have a 5% deposit) into law. I am in my 50s and I have never ever loathed and despised a Prime Minister with a fraction of the animus I feel for this one. Oh how much longer do we have to wait to dance on his political grave?
CB, part of my as yet undrafted Banking Act is that only 70%* of the purchase price of land & buildings will be registered as a charge at HM Land Registry. Of course banks can lend more than this if they want, but it will rank as unsecured and be disclosed as such in the bank's accounts. But it will help discourage reckless lending on speculative land values.
* This figure will be adjusted downwards if house prices have risen more than 5% in the previous year.
Mark - that is a proper proposal, and is aimed as you say, at stopping reckless lending from driving up speculative land values, and would achieve that through direct provisions for the way the price is accounted. A key element is your concern for variations and freedom, in the statement that banks could do as they pleased (but would need to take into account the costs involved). But perhaps more that anything, it is you who is saying this, not GB. I think someone must have explained 125% mortgages and credit bubble to him (again), becuase now we suddenly get his 5% deposit proposal. About as far as he can see is whether people will always be able to pay their mortgage debt costs -- and never risk getting re-possessed. He doesn't think, can't think, about the real economic consequences of what he dreams up, and it doesn't cross his mind that people get themselves into debt other ways, and lose their homes because of that). He has also gone on about the banks not lending enough and how they should get back to 2007-levels --- when one of the reasons mortgage approvals are now lower is the widespread requirement of a deposit (that is, the banks are using the very policy he is proposing to make compulsory). The next thing he will propose is a law that people who have paid a deposit cannot have the home repossessed (will they be allowed to release some of the equity or raise further debt secured on the home?) Shortly after he will tell the banks to lend to more first-time buyers. When they don't he will announce a new scheme of government "help" for people who can't afford the 5% deposit they need. Then he will propose to axe police pensions. Then he will be beheaded in Whitehall and his body quartered and fed to rats in the four corners of the Kingdom.
As a tenant, I'd quite like to see a rule that my landlord's mortgage lender has to give me a month's notice to quit
As a tenant, I am responsible for the rent until the end of the agreement, thus up to a year at most. I can only get out early if an alternative tenant can be found. These rules should be symmetric, i.e. if they take the house back, the landlord's mortgage lender should fulfill all the obligations of landlord until the end of the agreement.
Ed, you have to be careful with the s-word. While I agree with what you say in principle, under English land law, an occupant only has superior rights to a mortgage lender if he was in occupation at the time the mortgage was granted and the mortgage lender had actual or constructive knowledge of that occupant, plus other hurdles. Of course, the law keeps changing, in order to keep solicitors in business.
Mark, I meant should as in what law I would pass were I in power, not should as in how the law stands at the moment. Sorry for any confusion.
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