Is this how to help low-income earners?
Fraser Nelson 6:03pm
As if proof were needed that this government has lost its grip, the centrepiece of today's Not The Queen's Speech is a plan to lure thousands of low-paid workers into state-sponsored negative equity.
The government expects the housing market to crash by up to 10%, as we know from Caroline Flint. Yet today, Brown sets aside £200m to buy unsold houses, at the top of the market. And £100m to lure first time buyers into this crashing market with a shared equity scheme - or shared negative equity, as it will be. Only open to the lowest earners, i.e .those who can least afford negative equity. From the man who sold gold at the bottom, a scheme to gave the poor buy houses at the top. You couldn't make it up.
The Tories should take this idea apart. Problem is, they are proposing a version of the same. The bursting of the asset bubble demands new ideas and new thinking. We're not getting much of it from Westminster.
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Comments
David Lindsay
May 14th, 2008 6:32pmHouse prices to fall by five to ten per cent in the coming year? Let joy be unconfined, say I.
The explosion in house prices has meant that most younger middle or upper-working-class people stand no chance of living out the middle-aged peak of their powers in properties remotely resembling the ones in which they grew up.
"Bricks and mortar" do not, at least ordinarily, constitute an "investment". They constitute a place to live.
If we are now being forced back to acknowledging that truth, then about time, too.
Kevyn Bodman
May 14th, 2008 6:52pmLet the market operate.
Let house prices drop; they went up and they can come down a bit.
Low-income earners would benefit from a fall in house prices; they'd be more affordable.
Then when enough people move in the market starts to recover. Let it happen, don't interfere.
jaymason
May 14th, 2008 7:00pmIf Gordo is upto his high standards he'll buy at the top of the market, wait for it to crash and cash in his investment bit like gold really
Perry
May 14th, 2008 7:03pmNow let’s see . . this Mz. Prudence . . she the one who sold gold cheap, put the nation into massive, pointless debt, attempts to buy a by-election, now buys houses at a premium, and calls others to join her in this farrago.
I’m fascinated by this dour Mz. Prudence. I can glimpse the developing plot line for a sitcom.
Ah, now I see it! It’s a story of moral rectitude. A fable in which good triumphs over bad, frugality over waste, sanity over inanity.
TomTom
May 14th, 2008 7:35pmSmoke and mirrors. Nothing will happen. Brown needs headlines but markets need reassurance - £200 million is peanuts when you've already bought the bank - Northern Crock.
Northern Crock is probably the main progenitor of Britain's housing crisis yet Gordo can only muster £200 million to offset billions of pounds of credit-binge property inflation as it deflates....pathetic.
If he can blow billions into PFI profits and even have The Home Office and Treasury real estate owned through Jersey trusts by HSBC then £200 million is pure tokenism
Bruce, UK
May 14th, 2008 10:08pmOk, average house price in England is £218,112. Overalll budget £200 000 000.
Dividing one by the other gives 916 houses.
As Ed Balls might say, So What.
occasional ranter
May 15th, 2008 12:13amIf houses were an FSA regulated investment he would be crucified by the regulator for such a plan: pushing an investment that his "firm's" internal research showed was likely to fall in value.
And he's using taxpayers' money to push it....
occasional ranter
May 15th, 2008 12:20am... and Fraser is spot on: the Tories need to take this apart, even if it means an embarrassing retreat from anything similar they may have proposed.
The difficult days - of trying to attract sleepy and contented taxpayers away from Labour with ever more cuddly sounding proposals - are over.