Zero deposit coupled with interest only payments. Bank forever owns the property.
“hopefully for a profit”.
Does this not sound a bit like a very weird long term rent with high risk should a collapse happen and reliance on buyers coming in down the road, like a ponzi scheme? IE “you keep the profits of the value increase of the home” being the promised investor profit?
Not to mention of course, with it not actually being a rent, the “lender” doesnt have to take on renting laws/duties? What if you suddenly lose your job and cant pay up, etc? What if the property suffers serious damage, etc?
If FTB’s didn’t have enough problems. This now gives the entire cohort the capability to buy without saving.
Aka, if the loan is commonly accepted as a deposit, it has the potential to significantly increase the level of demand for entry level homes.
OTOH also allows people to buy much sooner than they would have previously been able.
A blessing and a curse!
* Build more homea
* Block second (third, fourth…) homes
* Curtail STLs
* Curtail buy-to-let
The rocketing prices are *insane* just now, can’t see how throwing more fuel on the fire will help.
Restrict supply whilst subsidising demand. What could go wrong???
Stop the madness and make it legal to build more homes. We don’t do this nonsense with any other good or service.
This would be a terribly stupid policy for obvious reasons. Would make remortgaging difficult too, so will further suffocate labour market mobility.
You’re meant to wait a whole lifetime before repeating the folly’s that caused the last crash. It’s been 14 years.
More demand side tinkering which will only drive up house prices and make the problem worse. What’s needed is more housing supply.
7 comments
Zero deposit coupled with interest only payments. Bank forever owns the property.
“hopefully for a profit”.
Does this not sound a bit like a very weird long term rent with high risk should a collapse happen and reliance on buyers coming in down the road, like a ponzi scheme? IE “you keep the profits of the value increase of the home” being the promised investor profit?
Not to mention of course, with it not actually being a rent, the “lender” doesnt have to take on renting laws/duties? What if you suddenly lose your job and cant pay up, etc? What if the property suffers serious damage, etc?
If FTB’s didn’t have enough problems. This now gives the entire cohort the capability to buy without saving.
Aka, if the loan is commonly accepted as a deposit, it has the potential to significantly increase the level of demand for entry level homes.
OTOH also allows people to buy much sooner than they would have previously been able.
A blessing and a curse!
* Build more homea
* Block second (third, fourth…) homes
* Curtail STLs
* Curtail buy-to-let
The rocketing prices are *insane* just now, can’t see how throwing more fuel on the fire will help.
Restrict supply whilst subsidising demand. What could go wrong???
Stop the madness and make it legal to build more homes. We don’t do this nonsense with any other good or service.
This would be a terribly stupid policy for obvious reasons. Would make remortgaging difficult too, so will further suffocate labour market mobility.
You’re meant to wait a whole lifetime before repeating the folly’s that caused the last crash. It’s been 14 years.
More demand side tinkering which will only drive up house prices and make the problem worse. What’s needed is more housing supply.