The online commenters have done our work for us.
From The Telegraph:
New 95pc mortgages for first-time buyers – here’s how it would work
State-backed loans for would-be homeowners to be unveiled in the Budget next week
Plans to turn “Generation Rent into Generation Buy” that could help two million people get on the property ladder are to be unveiled as early as next week in the Chancellor’s Budget. The Prime Minister confirmed in October the Government was working on a new scheme to allow banks to offer long-term, fixed-rate mortgages of up to 95pc to would-be homeowners, returning to the type of lending practices common more than a decade ago.
Banks will be able to provide the loans to some 3,000 people each month on properties worth up to £600,000, it understood, with further details to be announced soon. It will be accompanied by an extension to the stamp duty holiday, which helped push house prices to all-time highs last year, it is understood.
It appears that people have now cottoned on to the fact that such measures will simply inflate house prices and the credit bubble, which are due to go *pop* again in 2025 or 2026 (assuming the centuries old eighteen cycle repeats itself). Here’s a selection from the comments:
Robert Storey – Perhaps the young would benefit more if house prices were allowed to collapse every now and then rather than be forced to take on staggering amounts of debt which ultimately represents money finding its way into the pockets of developers and older homeowners. Inter-generational theft perhaps?(and i’m in my fifties).
Martin Mitchell – Boris and Rishi have already got today’s young people into £350 billion of debt this year which they will have to pay off. So what’s a bit more debt to get a 95 per cent mortgage on a new build shoe box? Should be more accurately described as Boris promises to do what ever it takes to keep house prices as high as possible (well the Cabinet is heavily invested in UK property!!) and to protect the banks from bearing any risk from a housing downturn while still trousering large profits.
Beware politicians promising to help first time buyers – they are doing the exact opposite! PS I had assumed last December the country elected a Conservative government that believed in market forces not a socialist one providing taxpayer subsidies to prop up prices in certain sectors of the economy?
Christopher Skielnik – In six months time we’re going to be in a depression so bad that few can even imagine. And what’s the governments plan? Cut taxes? Cut red tape?…no let’s try and blow another housing bubble!