Yesterday Vince Cable and the Liberal Democrats proposed a series of measures to help tackle the soaring number of repossession:
Vince Cable, the Lib Dem Treasury spokesman, said change was needed urgently to stop the “downward spiral” of Britain’s housing market.
Proposals include a mortgage rescue scheme, which would allow families struggling with repayments to sell all or part of their house to a housing association or private firm and then stay in the property as tenants.
The government should also allow councils and housing associations to borrow money to buy up land and empty new homes “to help replenish Britain’s much-depleted stock of social housing”, the Lib Dems suggest. (The Scotsman)
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A power vacuum?
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8 Comments
Allowing families to sell part or all of their homes to social landlords – now why does that sound familiar? Well done Vince for reading the papers and making a press release out of it:
http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article4493264.ece
I think it’s a great idea, but Vince Cable deserves absolutely no credit for it whatsoever.
http://lettersfromatory.wordpress.com
LFAT: your case doesn’t really seem to stand up as the link you give is to a piece from earlier in August, whilst Vince – for example – mentioned the proposal in a speech in July: http://www.libdems.org.uk/economy/allow-social-landlords-to-buy-unsellable-houses-says-cable.14679.html
I love Vince.
He dances around the opposition – just when the orthodox view grows to the point where the two largest parties have reached the same conclusion and accepted reversing their similar interventionist policies in favour of allowing the market to correct itself, up pipes Uncle Vince to shatter the consensus to say that their new policy would have far-reaching effects which would likely create further damage.
Not only does Vince show both Tory and Labour to be wrong, he shows them to be fools too.
Surely in the right world they should have seen this coming, but clearly they’ve both taken their eyes off the ball and are looking over their shoulders.
Why can’t we let prices fall?
Then I may be able to buy a home within 50 miles of where I work. I am a new graduated, but house price cost have become ridiculous. Myself and a lot of my friends greet the house price falls with joy, in the same way we met the rises with fear.
Chris,
House prices should fall, are falling and will fall. (Declaration of interest: a mortgaged flat in London is a major asset for me.)
The problem Vince ia addressing is three part:
– eviction is bad for family life,
– there is a clear need for more social housing in many places,
– left to the market, house prices can be expected to fall more than is necessary or healthy.
His solution is to buy up houses that would be foreclosed on (at, I assume, valuations subjected to some type of discount or “haircut”) to make up the stock of social housing. That should reduce misery, improve our stock of social capital and smooth a desirable market adjustment; all at a cost of an increase in public borrowing matched by an increase in public assets. Further, it would be administered locally without a lumbering, distorting Whithall mechanism. All good LibDem sense I think.
Of course letters from a tory has no idea about anything – he seems to be the Harry Enfield paraody Tory Boy made flesh.
Heaven alone knows why he wastes his time on Lib Dem Voice. At least some of the other Conservatives can make interesting or relevant points.
David, (Declaration of interest no property looking to buy)
Thanks for clarify the points. While this scheme does seem to be an interesting idea, and reducing the trauma caused by eviction is very welcome. I wonder how it will work in practice, such as whether councils or associations can borrow cost effectively, when one of the major causes of the crash is an inability to access cheap finance.
I also wonder about the effect of neighbouring house values if next door suddenly became “social”, whether this would cause a domino effect of falling house prices and reprocessions.
If this policy delays the neccessary corrections to the markets and causes an even bigger crash at the end of the next bubble it would be enormously counterproductive.
There are twin problems of uncertainity and lack of money which are harming the wider market, and the best solution to the crisis is some stability. The problem was created by the over valuing of houses by cheap finance and lack of construction these were failings by the market. Maybe letting the market fail would be the best way to remove these systematic failings
foreclose the mortgage from a troubled home owner and sell the house in open market. Now buy the house that the home owner can afford from the open market.
There is no need for home owner to stay in the home that they can’t afford. Lets not reward the people who were speculating and living above their means.