No analysis and no satire, I know, but I just want to say to as many people as possible right now that this policy is so wrong on so many levels that I can scarcely believe that it’s being proposed:
More than 100,000 people could get onto the property ladder in the next five years thanks to a part-ownership plan, Chancellor Gordon Brown has said.
Buyers would have to raise as little as half the cost of homes sold on the open market, he said.
The remaining equity in the house would be shared by the government and the bank or building society.
It’s Labour’s Black Wednesday in the making. To hear a Chancellor use the dread Ponzi scheme phrase “property ladder” chills me through. God help us all.
He really is keen to keep the Property Bubble fully inflated, isn’t he? From next April people will be able to buy houses for their pension schemes: same effect. You’d almost suspect that he wants The Bubble to stay plump – el Gordo – until he’s P.M.
The entire Social Security system is one big Ponzi scheme. It is hardly surprising Gordon Brown is advocating another one.
Thanks for that PG,
I was beginning to think that I was the only one who thought that the property market was beginning to look a tad Albanian.
He has based his “skillful” handling of the economy on a buoyant housing market, I don’t think he is stupid enough not to see that it will only make it worse (Maybe he’s hoping someone else will have to clear up the mess.)
We have seriously considered expediting our departure from the UK because of some of the announcements that have come out in the past couple of days. (Someone else, from Treasury, I believe, wants to make the upper tax level even more “progressive”, which means that they will collect less tax, and will have to raise taxes on everyone else, too.
Even the Observer managed to say that the “Taxpayer” would fund this scheme, rather than the “Government”, as they normally do when New Labour largesse is mentioned.
Tells you something about how cockamamie the scheme is if the Observer doesn’t use its propaganda terms…
I’m not sure buying your own home as part of your pension plans is a “ponzi scheme”. The essential point about pensions is you want to be able to consume when you are no longer producing. Usually as you cannot store most consumption goods (at least without them deterioating) you have to do this at one remove, by buying something you can sell later, e.g. shares. However one of the largest items of consumption is housing, and it is one of the very few that you can effectively store.
Buying a house purely for investment might be.
Assuming that Brown hasn’t completely lost his grip, we can assume that this stunt is aimed at addressing the problem of affordable housing for essential workers in London and the South East.
In the unlikely event that anything actually goes ahead, look for constraints which directly or indirectly preclude take up north of Cambridge or west of Swindon. Regional civil servants are already assuming that it will not affect their patches.
But it isn’t likely to go ahead, because of the difficulty in getting potential lenders to come aboard. For a precedent, look at the grief they had trying to interest banks in underwriting Individual Learning Accounts (remember them?).