David Cameron writes about Help to Buy
Prime Minister David Cameron writes ...
 "A lot of people faced the same problem as Barry and Samantha. They worked hard, earned a decent salary and could afford monthly mortgage payments - but not the big deposit needed to buy a home of their own. So we introduced Help to Buy to help hardworking families like them get onto the housing ladder and get on in life. It's helped Samantha, Barry and their little boy Alfie secure their first family home - and official figures released today show it's given over 88,000 families the security of owning their own home. Please watch and share this important video today:  If we win the next election, we'll extend Help to Buy until 2020, build 200,000 more Starter Homes for first-time buyers and help keep mortgage rates low for hardworking taxpayers. And brick by brick, family by family, we'll build a Britain where everyone who works hard can have the security of a home of their own. Yours,  David Cameron"  |
Comments
"since the early 90's there has been a huge bubble in housing, as prices keep raising, there was a prick to the bubble in 2008 but we have been endlessly working to continue pumping air into the bubble and keep house prices astronomical. So rather than aiding the situation by abolishing NI,VAT, Inheritance tax and stamp duty, and introducing a Land Value Taz to replace them, we intend to keep all the nasty taxes above hurting people who do the right thing and work, and rewarding big fat bankers. we intend to do this by using some of the money taken in the above nasty ways and using it to pay astronomical deposits on houses.
it also has the added bonus of producing large profits for current home owners as their house price rasies in accordance with whats going on around the site they own. In other words generates a large sum of money for the few and costs the many.
Brilliant
The house price bubble is particularly concentrated in London and knock-on effects have spread to most of the rest of the South East.
The germ of truth in your post is that we do need to monitor Help to Buy to make sure it does not pump more money into house prices - as opposed to house building - and make that bubble worse.
That is why the Chancellor was absolutely right to ask the Bank of England governor and FPC (Financial Policy Committee) to review "Help to Buy" every September to ensure that the scheme is not causing the problem you describe.
However, the most recent such review was published on 2nd October and Governor Mark Carney said then that, quote,
“There has been strong house price growth in some regions but, in the Committee’s judgement, the scheme does not appear to have been a material driver of that growth.”
There are two main reasons for the House price boom. One, which it would be very difficult for any government to stop, is that many investors around the world have decided that the London property market is a safe bolt-hole for some of their savings. In the process there has been a self-fulfilling prophecy that investing in London property is a one-way bet.
One problem with this kind of belief is that such prophecies can be self-fulfilling in the short and medium term but rarely forever, especially when a market gets so out of line with the fundamentals that ordinary people are priced out of it.
When, not if, the correction comes, it will hurt a lot of people. We are more likely to get a soft landing if we can keep the market accessible to more people: and also in the meantime, we have to help more people obtain homes.
The third reason for supporting Help to Buy is to try to get more starter homes built.
The tax argument is a red herring: all taxes distort the market to at least some degree and so would Land Value Tax.
People dislike paying VAT, National Insurance, Inheritance Tax and stamp duty and - guess what - they would dislike paying Land Value Tax too.
None of these taxes are a primary cause of the house price boom: by taking spending power out of the economy the net effect of all five is most likely to be to depress house prices.
We do have to watch the bubble, but on balance "Help to Buy" has done a lot more good than harm
LVT is not a red herring, it would bring down the cost of buying land and houses, would create tax havens right where they are needed most, and would help first time buyers no end.
yes, people would not "like paying" LVT, but they would prefer it than paying VAT. there is no such thing as a "good tax" its just LVT is the "least bad" one.