pslewis

NO!! I say!!

Plans are afoot to allow Banks to have massive assistance from the bank of England ...... ie. OUR MONEY!!

I think the Housing Market should be allowed to find it's own level - let it drop to where it should be .... that is how you help the youngsters get onto the ladder!

I'm spitting feathers ..... state intevention - AND the Tories are claiming it was all their idea!!

fast bloke

How exactly does the BoE gets it paws on your money?

lozgti

So,we own one bank and now we are going to own all the rubbish mortgages that the banks don't want.

Where does the B of E get all its funds from and are we now one of the skintist countrys in Europe ALL because Gordon is so desperate to preserve his famous house of cards economy?

TBH I don't think he can stop what is coming.Loved his quote about 'I've started a job and I'm going to finish' Crikey ,if this is only the start get him out now!!

PeteBrant

This was muted on Radio4 on Tuesday.

Of course everyone with a vested interest wants this to happen. The Government, the banks, financial markets, Estate agents etc etc.

At the moment, banks cannot sell thier "dodgy" debt as they normally would, because no one want to touch it. So what is being suggested is that the BoE buy this debt, and therefore free up banks to be able to loan out again.

This is despite the fact that the taxpayer has already bailed out Northern rock to the tune of £60 Billion (thereby more than doubling the national debt).

And to what end? This action will sovle nothing. All it will do it prolong the inevitable and leave us in an even bigger hole when it goes pop.

The government are absolutely ****ting themselves about the Housing market going, because over the last 20 years or so, people have gone hook line and sinker for the great con that if your house increases in value you are better off.

People, are equating the value of thier property directly to thier properity, so the Government, any government, does not want to be in power when it drops.

I sincerely hope this idiotic idea is dumped and the interests of the country are put before Governments, and money men.

pslewis

EH?

Where do you think the money in the BoE comes from?

MrNoisy

iTrader: (28)

When this government's landed us in trillions of debt due to over-borrowing and deferred loans, and then Northern Rock, I fail to see where the money's going to come from.

(Gordon) Alistair, the banks aren't lending to each other. How do you think we can sort them out?
(Alistair) Let's tax the working and middle classes some more. About another 5p on fuel should do it, plus let's spend all the money from the road tax on more digital speed cameras so nobody can go 1mph over limit without getting a £30 fine and 3 points - that should generate some revenue.
(Gordon) Wow! That would solve the environment problems too - nobody would be on the road because they'd all lost their licenses. That's brilliant Alistair.
Then we can make more police redundant as they won't need to meet their targets on catching speeders anymore, and I can divert the money to buying us another flat in London with a £1m refit and expense the lot.
(Alistair) But what about the banks?
(Gordon) Oh, we'll just bump income tax up from 17.5% to 20%. People won't care and even if they do we'll just ignore them - it worked for Tony after all.

If that really did happen I would leave the UK!

fast bloke

I think I have a fairly good understanding where it comes from. The words 'tax' and 'payer' are not involved. Where do you think it comes from?

PeteBrant

Evidently not!

FlightMan

This country is so f@cked up its unbelieveable.

How we've got to a stage where our leaders, both political and business, will screw us over with OUR OWN MONEY, to save their political skins/ bonus' is beyond me.

This "idea" is complete nonsense.

boxst

Similiar things are happening in America. Even worse really as the suggestion that is just being put into action there (that annoys all the Americans that work for me) is that they goverment will assist people with mortgages they can't pay by offering special capped mortgage plans. That is a good idea until you realise that people who managed their finances properly, have a modest house, but can afford the increased payments will be penalised whilst the people who overstretched themselves will be rewarded by the government assisting them.

Steve

MrNoisy

iTrader: (28)

You're not wrong mate; which is why I bet this PC loving government with it's do-good left wing nonsense approach will follow suit and bail out all the chavs who have maxed out their credit cards and borrowed thousands more than they could afford. Oh the poor things .

They should let people see what getting into debt really does to you if you don't manage it properly - only then will the youth of today realise that money doesn't grow on trees and learn to save some of their income.

What terrifies me is that nobody nowadays seems to be making any provision for later on in life (i.e. a pension or any form of savings). Quite where they think the money is going to come from I don't know, but I'm damned if I'll let the government raid my funds when that time comes! If they only forced people to pay into a pension and made it mandatory - hey presto - more funds for banks. Oh, but forcing someone to pay into a pension that would be for their own good? That would probably infringe their human rights...

PeteBrant

I don't know what sort of mentality you need to have in order to even worry about this sort of thing.

Do you throw a wobbly when someone gets an extra roast potato (that obviously couldn't afford it) on a sunday?

fast bloke

Enlighten me then.

FlightMan

You're joking, right?

PeteBrant

You do realise *why* credit was taken out by people who probably couldn't afford it until very recentry, right?

FlightMan

Yep, to buy 42" plasma TV'c, cars and foreign holidays. Because "everyone else is doing it"

PeteBrant

Nope.


I mean, actually think about what is being suggested. What do you think will cost the state more, having to house someone who has lost everything, or, helping with a few quid to top up thier mortgage?

PeteBrant

Nope, try again.

FlightMan

Nope. Come on Pete, enlighten us poor souls with your wisdom.

Varboy

OK, so if the government doesn't intervene on what is essentially a mild risk debt, then what happens?

Do we continue to see a rapid cooling in the housing market as people cannot afford to purchase a home or are squeezed financially when they see their remortgage payments go up a couple of hundred per month. Just think of the ramifications of this for a minute if it continues to happen. Not good for the majority of people.

I can understand the frustrations of the posters here that obviously are careful with their money, have little to no debt and crap loads of equity in the property, but perhaps they ought to consider.... what if the situation continues to worsen severely, what if they or their partnet loses a job or falls ill? how will they stand then????

I must admit that when I first heard this news, that I was in the same frame of mind. Your perspective soon changes when you put the boot on the other foot.

PeteBrant

Well, just to put it in basic terms. Why do you think the re-nationalisation of Northern Rock by the BoE cost every single tax payer £2000, if the BoE has nothing to do with tax payers money?

And if you then come to the conclusion that it actually uses tax payers money to do the deal, you can then assume that any deal to buy debt from banks will use the same tax payers money.

The BoE is a central bank, it's not ,like, barclays. Its the equivalent of the Federtal Reserve in the states.

boxst

I know you like to play Devil's advocate, but I'll bite. In America it causes huge resentment as it has always very much been a sink-or-swim nation where you literally DO get thrown out on the street and no-one (goverment) cares.

Here, less so of course. But it doesn't teach anyone a lesson as if you overspend, overstretch, don't worry the government will help you.

Steve

lozgti

But the situation should not have existed in the first place.

MrNoisy

iTrader: (28)

Sorry but I don't agree. When you take out a mortgage, you are warned that the rates can go up or down and that you should be able to afford an increase - if you can't then you're overstretching yourself.

Yes, it's irresponsible to do so, and yes the banks are irresponsible to lend money to people who can't afford the repayments, but ultimately SO WHAT!? If their house gets repossessed they can rent. There's no way in hell my tax money should go to pay off some irresponsible idiot's mortgage because he / she / they chose to buy a property which was ultimately too expensive for them to afford.

PLUS - if the housing market does cool off, prices will fall and first time buyers will be able to get back on the ladder. A recession is coming and there's nothing Brown can do about it except delay the inevitable.

Ringpeas

This SHOULD of all been nipped in the bud years ago with tighter lending regulations.

We are now in a position though, that if we don't improve the availability of credit, many people will stop spending money. This is tough on them but this could result in a lot of job losses over the next couple of years, then things will get very serious.

As the economy is built on consumer dept rather than manufacturing, I think it is too late already

MrNoisy

iTrader: (28)

Couldn't agree more.

FlightMan

Varboy

Agree or not. If a significant majority of people suffer, then we will ALL suffer in some way or another.

I'ts easy to sit in a position of strength and say 'well I didn't buy the plasma, have the nice holidays or the X5, why should I pay for other people's mistakes' but the fact is that we (from a position of strength) will always pay for people's mistakes. I just think the Government calming the jitters of the lenders by providing this 'funding' is far more preferable to the possible alternatives.

PeteBrant

Thats absolute rubbish.

I'm not playing Devils advocate, I am following *exactly* what came as a result of a parlimentary review following the last housing crash.

THousand upons thousands of peopel lost thie rhome sin that crash. People that were encouraged to buy houses in a burgeoning market.

When the crash happened lots of people lost thier homes - Through no fault of thier own. They had to stretch to afford the home, but it was ok, in few years they would be more manageable, then the interest rate absolutely rockets and they are left not being able to afford the mortgage which has, suddenly, doubled.

Could you afford it if your mortgage doubled?

So, as a result, the situation was review and it was decided that it would be far better for the people, the banks, the economy, the strain on the welfae budget, to just give a few hundred a month to help with mortgage payments, (interest only) rather than have entire families homeless which you now have to find a home for and pay for the whole lot.


I mean its not rocket science.


The situation now it similar, the interests are low, but the housing prices are much much higher, so the net effect is the same.

When someone who has bought a house, for several times thier income (remember, these people are positively encouraged to do so by government and the banks) in a recessive market, remortgageing dissapears off the table because you are in negative equity. Any rise in interest rates is just as painful in the early 90's because peopel ar eborrowing much much more.

The same rules apply. It has absolutely nothing to do with people thinking "its ok the government will bail me out" it is normal people caught in a set of circumstances where they cannot afford to pay thier mortgage and are at the mercy of the financial situation of the country at large.


You have to be pretty small minded to think "That *******s getting his mortgage paid for by the state the ****ing chav"

Devildog

So, Pete.

Are you finally admitting that all those years that your golden boy was in power he was, via labour policy, in fact, screwing the UK into the ground?

Thats the problem when you apparently base the economy in your care on the property market.

But Pete - look at the bigger picture mate, its not just about house prices finding their place and the consumer having less/negative equity.

Eveything from pension funds/schemes through the constrution industry and property companies to local businesses will be affected if there is a significant "crash" in property values.

Anyone who thinks they are secure because of the current level of equity in their home is sadly misguided, irrespective of whatever level the property market is at. After all, you only get the benefit of that increase in value if you sell and downsize, or move to another area.