This article in City AM reads like a spoof but appears to be genuine:
THE GOVERNMENT has today launched a long-awaited review of the private-rented housing market that calls for councils to waive affordable housing requirements on private rented schemes and for financial incentives to encourage investment into the sector.
The review, conducted by 3i chairman Sir Adrian Montague, makes five recommendations to the government for encouraging large institutions (1) to invest in privately rented homes to help meet demand.
As well as waiving affordable housing requirements,(2) these include making more public sector land available(3) for private rented schemes and setting up a “task-force” of developers to advise the government and set standards.(4)
The report also recommends the government provide equity or debt funding(5) to share the risk and help kickstart investment.
Residential landlord Grainger today described the proposals as “a critical step forward for the faltering UK housing market”.(6)
Harry Downes, the founder of Fizzy Living, which has raised £30m to build rented flats in London said: “ It is very difficult to get funding for a development that isn’t going to be sold off. What we need is for banks to understand that the sector is a viable investment class.”(7)
1) Such as his own company.
2) The Morbidly Obese One has already set about fixing that little problem.
3) They own land! And even though they aren't using it for anything, let's go on the safe side and give them more land! The thought of building social housing on that public sector land is off the radar.
4) Set your own exam, mark your own answers, decide the prize money.
5) They own land! Give them cheap money!
6) People like Grainger ARE the housing market, do they admit they have failed?
7) Well either it is or it isn't. I suspect that it is, banks seem happy enough to lend to Buy-To-Let landlords, why not lend to Build-To-Let landlords?
Thursday 23 August 2012
We own land, give us money: Masterclass
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6 comments:
I think they are running an experiment to see how blatantly they can report the activities of the kleptocrats before their readership starts noticing.
I saw the story on the BBC. Can't quite believe how blatant it is, but as you say it seems to be real.
B, AKH, when I read it, I thought "I can easily do a spoof of that" but actually that'd be impossible, they've already asked for just about everything they want.
Agreed 100 % but I'm not so sure that this incentivising of BTL and build to let might not be the catalyst required for a politically feasible launch of LVT
To launch LVT we would need the following conditions ...
1) a cash hungry state requiring tax revenue . Check
2) a dwindling ability for the state to obtain said taxes from a productive sector. Check
3) a large percentage of the losers from LVT to be broad shouldered financially, immobile ( read mortgaged), and politically expedient as collateral damage . This is always the tricky one .
The introduction of LVT would lead to a large correction in house prices and whilst this would offset generationally there would be a large number of repossession etc and a massive hole in banks balance sheets (again)
The more the banks shift to 25% down Btl the easier this latter problem becomes. 'families' can be protected, for-borne ?? and maintained whilst the get rich quick rentiers can be milked to pay for the shambles their greedlust or stupidity has created . Or maybe I'm wishful thinking
JC, agreed, the more blatant the Homeys get, the higher the number of renters, and hence more potential pro-LVT voters. But they know that as well as we do, which is why they go to great lengths to ensure that the number of owner-occupiers stays at a certain level (well above 50%).
"The introduction of LVT would lead to a large correction in house prices and whilst this would offset generationally there would be a large number of repossession etc and a massive hole in banks balance sheets (again)"
Large correction = hopefully yes.
Large number of repossessions = no. Why would there be? I've done the maths, even if yer average recent purchaser had £50,000 nequity all of a sudden, they'd have extra £10,000+ a year net income to pay it off. By and large, recent purcashers would be able to pay off their mortgages in full in ten years at the most.
Massive hole in banks balance sheets = no. I don't listen to hysteria, I've done the maths. If house prices halved overnight and everybody in nequity lost their job and defaulted without paying another penny (all very unlikely extreme scenarios), banks would lose about 12% of their nominal assets. Which is less than the amount they have in outstanding bonds, ergo, this can be sorted out be debt-for-equity swap, depositors will NOT lose a penny.
Yes, it's hard to remeber that when the banks are happy, they are doing obscenely well, when they are grumbling they are doing extremely well, when they are angry they are doing very well and when they are screaming blue murder, they are merely doing well.
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