Help to B ecome a Debt Slave

I’ll be talking about this on the wireless tomorrow morning (8 October) with @IainLee on @BBC3CR c 8.20 am so I thought I would jot some thoughts down.

Malcolm Tucker

So Help to Buy is two schemes but called one name.  Malcolm Tucker might have something to say about that.

The only thing they have in common is they relate to properties marketed up to £600,000 – around 26 times average annual incomes.  HAHAHAHA

HTB1, from last April, was about bailing out developers (notice their share prices soared, some 100%…). It is only for New Builds and First Time Borrowers (Buyers they call them).  It, of course, continues.  George and Jenny can borrow 20% of the total loan from the Government next generation and they pay ZERO INTEREST on that part for the first 5 years.  HAHAHAHAHA

After the 5 years borrowers will be charged 1.75% in the first year, for that element.  The next year the cost will be 1.75% + whatever RPI is AND 1%).  The RPI + 1% will be the rate of annual increase on that part of the debt.

Does anyone SERIOUSLY believe RPI will be only 3% or so in 5 years?  I mean, seriously??? HAHAHAHAHAHAHAHA  (BTW, the alternative is Japan 1989 to date, so no Get Out of Jail Free cards.)

Oh, and if inflation rises so will interest and mortgage rates.

So, obviously those FTBers are going to be debt slaves in the future as many of them will lose their incomes and their homes.  But they will retain the debts and/or go bankrupt.  Still laughing???

HTB2, from now ish, is for all buyers (except Buy to Letters, foreigners, 2nd homers).  So, it includes second, third etc steppers.  Also, not just new homes.

The lender will lend 95% of the price (not the value as obviously the value is much much lower than the price*) and the next generation will guarantee the lender 15% of the loan in case the loan turns bad.  For this insurance, the Government will charge the lender a premium, as yet unquantified.  Of course, the cost will be passed onto the poor schmuck who is borrowing.

Why don’t I call any of it Help to Buy?  Well, how is borrowing 95% of something buying it?

So, the cost will probably be higher than if the individuals just saved a reasonable deposit.  HAHAHAHAHAHAHAH No, stop, please.  I can’t take it anymore.

Look, this has NOTHING to do with ‘helping folk’ etc.  Rising house prices: vote winner.  Falling house prices: vote loser.

As all Governments (incumbent politicians) do, they are buying votes, with our kids’ standard of living.  They are literally robbing Peter’s son to pay Peter.  [It has gone way beyond robbing Peter to pay Paul.]

Those who take the loans have only themselves to blame when interest rates rise in a few years.  Those people will be debt slaves.   They will work for the taxman, the bank/creditor and themselves in that order.  In fact, they won’t have anything left for themselves.

With the lowest borrowing rates in the 319 years of The Bank of England the people have been brainwashed into believing that rates will never again rise beyond a little more.  They will.  They have fallen for over 30 years.  Once they start rising they will do so for 10-20 years at least.  I predict too that, once they start rising, mortgage rates will nearly double in just the first year after starting to rise ie from c 4% now to 7 or 8%, very quickly.

What’s the name of this blog?

Jonathan Davis on Sky News March 2011

If they raise rates we’re toast. If they don’t it’s BECAUSE we’re toast

On lighter notes:  Malcolm Tucker is an amazing fictional (???) character.  I happened to watch In The Loop just last week.  The best line was the finish to the scene with the General.

Enjoy: Funniest finish to a scene in a movie, ever

* Nowadays people know the price of everything and the value of nothing.

Oscar Wilde, The Picture of Dorian Gray

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14 Responses to Help to B ecome a Debt Slave

  1. adrian says:

    Money week “If anyone other than the government manipulated a market to this extent, it would be illegal. And anyone scammed into buying a house at today’s prices — and in particular a fast-depreciating new build with a locked-in mortgage lender — would one day be able to sue for hundreds of thousands of pounds.”

    They’d probably want to sue in about five years — once they had started paying ‘loan fees’ linked to RPI inflation on the bit of the mortgage the government guaranteed. Also standing in the queue for compensation would be the many thousands who, regardless of the endless help offered, have stayed locked out of the housing market thanks to stupidly high state-manipulated prices.

    Is there anyone in the UK fit to be in Power?
    I want Senator Elizabeth Warren to become British and form her own party, and take about 600 seats!

  2. Anonymous says:

    get your house in the market quick!

  3. Kay Byrne says:

    Hi Jonathan, I love reading your stuff but please change your blog colour scheme which makes the text so hard to read. Black text on a white background is so much easier to absorb!

  4. Mendel Maaß says:

    Gotta love it… it is like Mortgage PPI but it only covers the lender and probably costs MORE… amazing… nice blog by the way!

    • Thank you for your comment. A journo said it well – each time they go for politicians they wonder if its too far then the politicos do something as stupif as HTB

  5. adrian says:

    Help to buy is a scheme Baldrick would have been proud of – we had a boom formed by credit, which nearly bust, then we bailed out the fraudsters who profited from this boom
    then we lent more money to them, then more

    so the answer to too much debt, is even more debt!

  6. Hi Jonathan

    I could not agree more !!! Radio Lancashire rang me this morning for my opinion ( as an ex-banker ) and I said I wasn’t impressed. It is obviously a lot harder for people in the south than it is for we northerners with the prices being cheaper here.

    Kind regards

    Gerard Watkinson

    Business Rescue (UK) Limited Tel: 0844 24 7 0 999

  7. And the Iain Lee piece here:

    I see mortgage rates are coming out for HTB2. They’re not exactly tiny are they. As I say, the borrowers are paying for the insurance.

    You couldn’t make it up

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