Gordon Brown Offers mortgage holiday

[Blinglovin]

www.ft.com/cms/s/0/39ab3296-c143-11dd-831e-000077b07658.html?nclick_check=1

Home is where you and your family live, not bricks and mortar.
I hate the same argument when people say the elderly won't move out of 5 bedroomed houses they've lived in all their lives, so what it's a house, your memories are in your head.

If you are using credit cards to just get by then you can't afford your lifestyle, that simple, that black and white i'm afraid.

No southeastra it won't because up to £200k the government will pay your mortgage for you.

but what if you aren't using cards. what if you just earn enough to pay everything but not save?

and home is more than bricks etc

From Robert Peston's blog:

UPDATE 19:00

I've become a bit wary of the Government's claim that the eight biggest banks have backed the mortgage-guarantee scheme, having spoken to a couple of them.

They're not prepared to attack it in public. But they're not sure it will have much of an impact, unless they are strong-armed into keeping the genuinely feckless in their homes - which the banks feel would be a bad thing.

Also, Margaret Beckett, the housing minister, has just said on BBC Five Live that a bank has estimated for the Government that the scheme will help perhaps 9,000 families who would otherwise have lost their homes.

Yep, just a bit of spin, then. As usual.

Wow, so unlike the govt. to talk out of their arses? Can we actually trust a word that comes out of their mouths?

it's always been the same though, i blame thatcher

"guitarheroine - only if you fail to discuss things with the bank and sell up on time to retrieve any equity there."

Surely the point is that you can't sell your house at the moment!
Otherwise this wouldn't be such an issue
You could sell and downsize or rent rather than be reposessed

anyone can sell at the right price, even now

people claim they can't because they are deluded about the achievable price now that the boom has ended - if reposession is looming you are most likely best off pricing to sell rather than trying to hang on in the hope that someone will fall in love with your property and give you whatever price you imagine you deserve

"anyone can sell at the right price, even now"

No, that is poor economics, as many buyers can no longer get mortgages in order to buy, and many more are waiting to see what happens over the next few months. Some houses are still selling, so those selling larger properties cab usually find a buyer (though whether those buyers can themselves find buyers is more of an issue).

Yes you can price your house so low that it purely becomes an unmissable investment opportunity for someone else. But house sales are slowing down in part due to liquidity issues. Even now people with apparently good incomes looking for mortgages at 3x income are not getting sensible offers.

Not to say that some people can't sell, but you can't extrapolate to anyone can or indeed lots of people should. This policy looks at the big picture: however much some of you think that people "deserve" to be repossessed, it will actually be incredibly bad news for our society and economy if we do end up with 100,000s of repossessions in the next 2 years. Nothing really to do with the individual stories behind each potential repossession, but more to do with the huge numbers affected in a sort timescale.

It is always a balance between individual choices and responsibility and the state's responsibility and need for stability.

Can't see how this will work as in 2yrs time people will have to repay & will repay more as the mortgage wont have reduced but will have accumulated more interest. I'd sell up now to avoid the even bigger property slump of 2yrs time.

Right ladies, get your credit cards out, fuck it have a great Christmas because the states going to bail us out !!!!! Yippeeee

oh fgs
you are talking as if people want to accumulate more interest

They are only talking about if you lose your job and are incapable of paying the mortgage

Grow up a bit

Do you know what it's a time bomb and what really really annoys me is that I'll be paying for it along with anyone else who still has a job in 2 years time.
What the heck we should all eat, drink and be merry because everyone of us will be paying for this mess for a long time, why shouldn't we have a share of the fun too.

lol at you'll be paying for it

as i said earlier i pay tax for alot of things i don't necessarily agree with.

what's fun about facing reposession?

I am starting to doubt your
i am not bitter just cynical
comment

Do you know what, having read that proposal all the way though there's simply nothing to discuss, it won't happen the banks aren't going to be bullied into behaving recklessly because they know if they agree to this people will withdraw their savings and then they will be stuffed, the government will either have to go with hyper inflation or back down.
There's nothing to discuss, but i am genuinely surprised yet again how hoodwinked the general public are or maybe i gave them too much credit (bit like the banks lol).

I certainly didn't say that guitar ??????

oh sorry that was Mercy!

You do sound bitter though

LadyMuck - I never suggested that anyone "deserves" to be reposessed. It just doesn't seem like the best idea to use taxpayers money to keep people in very expensive houses they clearly can't afford at a time when property prices are falling and unemployment is rising - at the end of two years they may well be in a much worse situation than if they had accepted the need to downsize now. The pain is just being deferred to the future, as is the New Labour way.

The easiest way to prevent this situation would have been to intervene during the boom years and prevent the bubble from getting so very out of hand. That "balance between individual choices and responsibility and the state's responsibility and need for stability" should have been maintained. I have a great deal of sympathy for those who find themselves facing losing their home - but this scheme seems to apply to the truly feckless (no insurance, second mortgages etc) and the relatively wealthy (mortgages worth £200k - £400k). I think there are people who are in more desperate need.

"Even now people with apparently good incomes looking for mortgages at 3x income are not getting sensible offers."
If they have deposits, they are being made sensible offers, just not the kind of looney and unsustainable 125% ones that were being offered. All this misery has been caused by the crazy lending of the past few years and the unsustainable debt bubble that the government facilitated. The market price of anything from apples to houses is set by what people are willing and able to pay. When that drops, whether due to reduced liquidity, or reduced pressure as people no longer fear being priced out forever if they don't buy today, it does not mean the new price is wrong. Anyone can sell, just not at the price they want.

I might think my elderly car is wonderful and worth £XX,XXX but it is only really worth what someone is willing and able to buy it for. Which would be more like £XXX. Before the bubble burst I might have got more for it, but so what? It is the same for houses.

Sounds like another bad idea to me. Money would be infinitely better spent building social housing, which would go a small way to tackling unemployment as well as homelessness.

I am both cynical and bitter about this by the way.

You seem to believe that the price that you are offered in an illiquid market is the "value" of the home.

Whilst I have no problem in agreeing that houses have been overvalued in recent years, I disagree absolutely that the price offered in a limited market equates to the value of an asset. As do economists and accountants.

How much of the current situation is caused by Labour's mismanagement and how much comes from global pressures is harder to call to be honest.

Still the cost of this measure to the taxpayers is far less than the money already thrown to banks or spent on Iraq. I'm amazed if this is the proposal which causes taxpayers to be upset.

LadyMuck - agree that the money involved here is relatively small. And actually the effects are likely to be small too with an estimated 9,000 households to benefit.

"I disagree absolutely that the price offered in a limited market equates to the value of an asset. As do economists and accountants."
Which economists and accountants? Why would it be assumed that current conditions are abnormal, when arguably it is just a return to more normal levels of liquidity? Sure, some houses are unusual and difficult to value, but most are not. A bog-standard three bed semi still has an easily estimated market price, it is just lower than what it used to be. How else would you determine what it is worth unless by the current market price, which (some economists would argue) reflects all that is currently known about future price moves?

"agree that the money involved here is relatively small"

it is guessed at being a billion pounds - shows how money has been devalued really. That money could do wonders elsewhere.

Well, I don't mean to sound bitter.

Just trying to point out the realities of renting, I know some people think it's pretty straight forward (ie, you lose your job or take a pay cut therefore you qualify for HB which covers all your rent) because it's not.

I have no idea re economics or how the housing market works so can't comment on that but I am still cynical re this latest offer.