March 21st, 2013

Budget Doesn’t Unravel, Budget Spin Does

24 hours later and Osborne’s budget has yet to unravel, though both sides are having quite a set-to over the Help to Buy mortgage scheme. This morning Labour spinners got very excited by Osborne’s refusal to deny that the scheme would help wealthy homeowners to buy second homes, having the cheek to call it the “spare home subsidy”.

Both Osborne and Cable again did not deny it in the House at lunchtime. A Tory spokesman insists to Guido: “this is a very technical area. We have said that we are going to consult in order to get this right, instead of rushing into decisions or knee jerk reactions”. Yet Housing minister Mark Prisk seems to have made his mind up, telling Wato second homes would not be included.

Labour aren’t having a much better time of it: yesterday two-faced Chuka Umunna told Radio 4 he liked the policy, today he’s against it. If it turns out the spare home subsidy doesn’t exist and the policy is as he thought yesterday, that leaves him in a rather awkward position…


95 Comments

  1. 1
    Before the Budget says:

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    • 13
      Anonymous says:

      Where is the money for £130bn 5 year interest free loan coming from? On top of £130bn there will be another £40bn of free interest.

      Where is the money coming from?

      Like

      • 18
        Anonymous says:

        Like

      • 23
        Huge Grant MP says:

        It’s a guarantee old chap – underwriting the mortgage. Did you really think the government was literally making mortgage payments?

        Like

        • 27
          Anonymous says:

          1) Do you mean 5 years interest free is also a guarantee? Someone has to pay interest on it, who is paying it?

          2) Who is going to give the £130bn. Someone has to loan the money first. Where is it coming from?

          3) What is the bad debt on this guarantee, where is the money to pay for it.

          It looks like someone had too much coke before coming up with it.

          Like

        • 31
          Anonymous says:

          Osborne’s plan seems to be UK version of Fannie Mae and Freddie Mac.

          Like

        • 34
          Anonymous says:

          Is Osborne creating sub-prime mortgages?

          Like

          • P says:

            He is and if you read the fine print it is an extension to what Gordon started but only a handful of house buyers signed up to it.

            Like

          • Anonymous says:

            Does not matter how many sign up. If the sellers are under the illusion that money is cheap again, the prices will go up. Even if no one uses the scheme the impression will be enough to upset the market again.

            “Do I sell now or wait until 2014. Oh, we will wait for the better price.”

            Like

          • in other news on radio four today says:

            guido is a bias blog sus staining loon
            no use to establishing reality

            its a vote buying scam
            house prices need to re adjust
            they still havent
            this is the 20-25% that the gov are having to say they will honor
            banks are acting responsibly

            just as in cyprus
            someone has to take a hit
            all govs will avoid home owners taking the hit
            but all else is folly
            and mild to extremely dangerous
            the solution is in house building
            only way out

            the spare room tax or what ever you call it
            is very dodgy
            there arent enough one and two room properties
            it only raises 400million in perfect theoretical reshuffle
            and no admin costs

            the gov honor on 20-25%
            this will at best have no effect
            at worse
            its more credit drunkenness against house assests
            postponing the correction on markets and house prices
            and
            a house price fall is only thing gonna get first time buyers in
            *just saying*
            or a huge increase in wages
            these right wingers live in deeper cloud cookda bookscoo land than left wing
            but cant see their own cloud
            as different tHint

            and dont get us started on the liberal washy wish middle

            Like

          • Barney says:

            Looks like it to me.

            Like

    • 17
      CarryHole is a Dismal Hunt says:

      Sounds like a spare home subsidy to me….

      Rent Seeker party v Income Thieving party

      Whoever wins we lose.

      Like

      • 49
        CarryHole is a Dismal Hunt says:

        Osbourne’s announced the National Mortgage Service? Doing to affordability what the Liverpool pathway does to the living.

        Like

    • 20
      Toilets Mugliar says:

      Like

    • 22
      More Bollocks from Balls. says:

      So before the Budget Labour anted to Kickstart house building but after the budget they have turned it into a social housing project which is something completely different.

      If Bollock Ed gets his way and only social housing/”affordable homes get Osborne’s mortgage then there will be house price inflation at the bottom of the housing market trapping people into these awful “affordable” builds that used to be called slums.

      Like

    • 25
      Balls Balls Balls. says:

      Can’t see what is wrong with people using the scheme to buy second homes for the rent market anyway. It saves the state having to 100% finance new builds for let and at the same time provides new builds for let.

      Or would Labour rather the state build and allocate all housing in this country?

      Like

      • 41
        Lost In The Wilderness says:

        Exactly, the 20% assist is to help the first time buyers with the additional benefit of helping to stimulate the economy. The second scheme for existing homeowners is solely as a way of getting property sales moving thus money moving around the economy. For pity sake even my gerbil understands that concept.

        Like

        • 47
          CarryHole is a Dismal Hunt says:

          Ricardo’s law of rent says different. This is an anti-stimulous to the economy and will act like a privately collected tax.

          Like

          • Lost In The Wilderness says:

            Did he know what a silicon chip was? No so dont qoute the philosophy of an outdated, albeit credited expert, when relating it to present day economics. I am sure you have knowledge in this field by the fact that you referenced him but I am sorry, his application is now not relevant.

            Like

          • CarryHole is a silly Hunt says:

            I’ve heard some long winded ways of covering your ears and saying lala la I can’t hear you but that takes the biscuit.

            Since 2000/1 has been a tour de proof of Ricardo’s awesome work.

            Like

    • 37
      Politicicians just can not resist playing politics. says:

      That didn’t take long then. In less than 24 hours Labour has turned its back on the squeezed middle.

      Another 24 hours and they will insist Osborne’s mortgage(which I think he was stupid to introduce anyway) only goes to same sex couples on tax credits with a postal vote promised to Labour.

      Anyway isn’t this cunning mortgage plan only an extension to what Gordon Started but was not taken up by many?

      Like

      • 90
        Jimmy says:

        So should we call this the spare home subsidy? I know how touchy you people get about terminology.

        Like

  2. 2
    Anonymous says:

    Gideon is a toff moron.
    Bit like a certain bushy haired buffoon of this parish.

    Like

  3. 3
    Chuku says:

    I know I don’t seem very bright, but that’s because I’m not very bright.

    Like

  4. 4
    Toffs Out says:

    Gideon is a posh moron.

    A bit like a bushy haired buffoon of this parish.

    Like

  5. 5
    Tony Benn says:

    TAX TAX TAX! EVERYONE SHOULD BE TAXED AND LEFT TO LIVE ON SUBSISTENCE ONLY!!!

    NOT ME THOUGH. I LIVE GRANDLY!

    Pip pip

    Like

  6. 6
    What a load of fuckwits says:

    650 villages somewhere in the UK are being deprived of the services of perfectly seviceable idiots.

    Like

  7. 7
    Anonymous says:

    “spare home subsidy”

    How dare you, George Osborne! This has to stop.

    Like

  8. 9
    bunch of hypocrites says:

    How many homes does Blair own again?

    Like

  9. 10
    The Amazing Chancellor-Man says:

    Like

  10. 12
    UKIP says:

    Vote UKIP everyone.

    We promise to

    1. Maintain all public services used by right thinking chaps
    2. Cut all taxes
    3. Prepare for the 20m Romanians currently hiding in the Channel Tunnel.

    Additionally a free poster of Christine Hamilton will be displayed in every home.

    NURSE!

    Like

  11. 16
    Bang to rights says:

    Chuka comment starts about 17:15

    http://www.bbc.co.uk/programmes/b01r9rtb

    Like

  12. 26
    Anonymous says:

    Change all public sector pensions to money purchase, job done

    Like

  13. 28
    Ed Balls - Shallow Chancer says:

    THE REIGN OF TERROR 1997-2010……

    Like

  14. 32
    Chuka Logic says:

    Like

    • 39
      Financial Scholar says:

      Like

    • 48
      Anonymous says:

      And in the process cause a step change in the house prices so that more have to rent.

      Of course all those that prefer to live on government hand-outs will jump on this, but those that prefer to be as far from government as possible will be penalised.

      The encouragement of the benefit culture has spread throughout politics now.

      Wake up!

      Like

  15. 33
    Lost In The Wilderness says:

    I’m still chuckling over the comment made by that old rapscallion Vincey. labour have had more positions over their plans for the economy than there are in the Karma Sutra. quality

    Like

    • 42
      Vince Cable says:

      Did I really say that? It was really rather good and a great shame I have forgotten it already.

      Like

    • 58
      Bloody helll, some people are pig-ignorant says:

      Kama, you fuckwit. Karma is something else.

      Like

      • 62
        Brigadier Ben Ritchie Hook says:

        Needs to get his legs brown out East I think

        Like

      • 79
        Lost In The Wilderness says:

        Sorry prick excuse me for such an error. Spelling mistakes can be corrected but ufortunately for you being a fuckwit is obviously hereditary. Must take a lot of your time wiping away their dribbling saliva.

        Like

  16. 36
    a non says:

    Are the LibDems the equivalent of Real Government having a Spare Party subsidy?

    Like

  17. 43
    Ed Miliband says:

    I have nothing to say on the matter until I have spoken to Hugh Grant first.

    Like

  18. 44
    Chris Huhne HMP says:

    Only 2 weeks into my prison sentence and I’ve already come up with a balanced budget. If I give all my snout to my cell-mate he’s agreed not to bum me too hard!

    Like

  19. 53
    Bill in his Gate says:

    Why are politicians (both Labour and Conservative and that other lot) trying to increase the price of houses at a time when people can not afford to buy houses?

    Like

    • 64
      Brigadier Ben Ritchie Hook says:

      Someone needs to have a quiet word with the Accommodation Officer as I think he’s pocketing the billet fees and short changing on the floor space allocation. No use let soldiers get into debt for a bit of floor space that is their by right in my view. Saw this sort of thing out at Singapore, officer responsible go his comeuppance when the chaps left him high and dry on quayside as Johnny Jap moved in. Bad show all round.

      Like

  20. 56
    Peter Mandelson says:

    Maybe Osborne should have done a house scrappage scheme instead. New houses for old, plenty of work for the builders and no need to cover the countryside with new development.

    Like

    • 67
      Brigadier Ben Ritchie Hook says:

      Not a bad idea saw something similar in East Africa, the District Commissioner knocked down all the local village huts to make way for new corrugated iron prefabs, did look better I’ll give him but the spear up the arse he got I think let him know what the locals really thought. Somethings best left in my view, but by all means give it a go.

      Like

    • 81
      CYNICAL OLD MAN says:

      Prescott already tried a version of the house scrappage scheme. Cost us taxpayers a f***ing fortune. How about all those perfectly serviceable homes in Liverpool bought under compulsory purchase (£70,000 each?) and sold a couple of weeks ago for £1.00 apiece.

      Everything these Labour numpties touch turns to ratshit!

      Like

  21. 57
    Casual Observer says:

    It may be worth revisiting OLIM investments for part of explanation as to why government wishes to try and prop up houseprices at unsustainable levels.

    Juicing construction is a way of dragging up the GDP figures – this is a trick Ch!na has been using for a while now. (See the empty cities…)

    If government was to stop messing about and set up fixed rate prime lenders such as Mae and Mac then the upfront seeding with public money makes sense. They are not though: Most of this cash will be lost to combination of fraud and bad loans as housing market continues to correct. (Are the major mortgage lenders going to make the same mistake twice ?)

    Not sure if Nationwide have made a statement on this. It smells like a state raid on thrifts though, drawing an analogy with S+L.

    Like

    • 68
      ZZss says:

      Not so sure house prices have much more if anything to correct given the devaluation of sterling since 2008.

      Commodity price rises have now increased to enough to make building cost prices seem reasonable. The major influence now could come from the other 50% of a house cost, the land it stands on, if government frees up too much.

      Like

      • 77
        Casual Observer says:

        As commodity / energy prices have gone up, average wages have come down, and for sure in real terms.

        Some of the input prices are artificial, caused by added tax, but in the case of energy, exceptionally poor policy decisions.

        Devaluation of sterling is somewhat irrelevant, except that such devaluation is allowing inflation to be imported to the housing sector due to lax rules on foreign purchases. However, did read that the ‘most expensive’ house in London did get GBP 35m knocked off the asking price, but unclear if it has sold, so perhaps this effect is wearing off a bit.

        Final price correction will likely be stimulated as the buy to let sector continues to contract, and mortgage rates go up. The process will be complete when the average house price is back at around 3.5x average salaries, and the banks are once again happy to lend this with 5-10% down over 20 years at a 4% average.

        At this point in time, most of those wishing to take out mortgages are horribly subprime (by virtue of the poor economy), as are many who wish or need to move up the ladder from a position of negative equity.

        Like

  22. 59
    (I don't need no doctor) says:

    Ummuna is a liar, plain and simple.

    Like

    • 70
      Brigadier Ben Ritchie Hook says:

      This chap looks like a witch doctor I once met who claimed to be Prince Phillips’ love child from a state visit back in the 60s. You never know with these things might have had some truth to it. He was an excellent shot and couldn’t stand other Africans so you never know.

      Like

  23. 61
    Ed Miliband says:

    What’s a policy?

    Like

  24. 65
    Moussa Koussa Mark 7 says:

    Of course it is unravelling.

    I’m off to apply for a second home mortgage, I will rent it out…But I will get help with the deposit and guarantees…FROM THE TAX PAYER….ie you Guido. Thanks

    Like

    • 69
      Liam Byrne says:

      Where is all the money coming from? There was none left when I was booted out of office.

      Like

  25. 71
    michael says:

    Stamp duty on 600k = 24k , cgt on any 2nd house gain for higher income earners is 28%. in a chain of ten 600k 2nd houses that have doubled in value there’s a potential tax take of 1.2 million quid (inc stamp duty), but not including tax from 15k per property solicitors and agents fees.

    Like

  26. 73
    Weygand says:

    Whether the scheme can be used to buy second homes is irrelevant because the real purpose is to stimulate general growth.
    Buying a new house means buying white goods, carpets, furniture, paying plumbers, electricians etc – all that Keynsian multiplyer sort of stuff.
    Just like building roads but will get more directly to local businesses – seems a good idea to me.
    Is the sort of policy Labour have been asking for and the second home palaver is just shameful politics.

    Like

    • 76
      Anonymous says:

      All depends on why the purchase was wanted/needed.

      It might have been the way for 15 years to upgrade, but now the moves are dictated by needs like relocation for jobs and reducing travel costs.

      Around here there are more mansions with stables for sale than 1 bedroom houses. The idea is to downgrade now.

      Like

    • 88
      Rip van Wrinkle says:

      What utter balls. An economy built of peasants borrowing money they can’t repay on overvalued assets in the hope that the next moron will pay even more for the same shoebox is called a Ponzi scheme.

      Ponzi schemes need new money to keep trading. Private money has run out. Osborne is providing the new capital to keep the Ponzi alive.

      It’s all about saving the banks. Period. Oh, and it will fail. Spectacularly.

      Like

  27. 74
    Chukka Yumunni here says:

    No problem. Hypocrisy sits lightly on my shoulders.

    Like

  28. 80

    No knee jerks….just Jerks all of ‘em!

    Like

  29. 92
    Vince Cable??? says:

    “I can’t quite remember which member of the government it was who claimed to have abolished boom and bust. Well, we abolished boom!”

    Like


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Owen Jones says:

We also need Zil lanes.


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