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Budget 2013 House builder subsidies will end in tears!

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  • Budget 2013 House builder subsidies will end in tears!

    First there was FirstBuy.
    The there was NewBuy
    Now in yesterday's Budget there is "GovernmentBuy" where the tax-payer effectively gives anyone buying a new home a 20% equity-release, an interest free 20% discount for as long as the buyer owns the property.

    This will enable house builders to raise prices as new homes will enable sub-primers to buy a home they cannot really afford.
    All this will do is raise the prices of new homes and instantly forcing the naive buyers into negative equity (the 20% government share cannot be passed on to second buyers). This will create a British Credit Crunch but with a State financial crisis not a bank crisis this time when interest rates have to rise to combat runaway inflation.

    Perhaps there should be a windfall tax on every house builder next year that makes more than 10% profit, at least then the tax-payer would get something back.

    At least in May 2015 we can have "GoodBye" when we can get rid of this incompetent, spin loving government once and for all!
    BRAND NEW HOMES
    Information for UK new home buyers
    New Home Blog The latest news and views

  • #2
    Re: Budget 2013 House builder subsidies will end in tears!

    Originally posted by New Homes Expert View Post
    First there was FirstBuy.
    The there was NewBuy
    Now in yesterday's Budget there is "GovernmentBuy" where the tax-payer effectively gives anyone buying a new home a 20% equity-release, an interest free 20% discount for as long as the buyer owns the property.

    This will enable house builders to raise prices as new homes will enable sub-primers to buy a home they cannot really afford.
    All this will do is raise the prices of new homes and instantly forcing the naive buyers into negative equity (the 20% government share cannot be passed on to second buyers). This will create a British Credit Crunch but with a State financial crisis not a bank crisis this time when interest rates have to rise to combat runaway inflation.

    Perhaps there should be a windfall tax on every house builder next year that makes more than 10% profit, at least then the tax-payer would get something back.

    At least in May 2015 we can have "GoodBye" when we can get rid of this incompetent, spin loving government once and for all!
    It does rather feel like a return to Fannie Mae and Freddie Mac - and look how that ended.

    Comment


    • #3
      Re: Budget 2013 House builder subsidies will end in tears!

      It is exactly like Fannie May Freddie Mac.
      And yes it will end just the same way.

      If buyers havent got enough money for a deposit and dont earn enough then they cannot afford a home. Whether it be a new one or not.

      Having two loans with one linked to inflation plus 1%, for 80% of a badly-build tiny new home isnt going to end well.

      Worse, the government gets to make a profit on its share if the home increases in value too.
      Even more worse! Buyers are paying Stamp Duty on 100% of the home price and only buying 80% of it!

      Buying a new home was always a bad idea, it just got worse!
      BRAND NEW HOMES
      Information for UK new home buyers
      New Home Blog The latest news and views

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