2015 Budget by Osborne

[El Cid 220]

Well we can argue about the merits of a government encouraging aspiration and their means of doing it, but I suppose the government would argue that to have younger people owning their own homes is a form of intergenerational wealth redistribution which ultimately moves people out of welfare housing dependency.

 

Gordon Brown started the scrapage scheme, that gave car buyers £2000 discount on a new car, was that a good idea for aspirational car owners?

 

http://en.wikipedia.org/wiki/Vehicle_scrappage_scheme

[biotechpete 10]

The reason first time buyers cannot get on on the housing market is because prices of houses have far outstripped young peoples earning capacity,to attempt to alleviate this and keep the bubble inflating using tax payers money is immoral but the tory vermin will not give a toss as long as people feel a bit better off at least for the next 50 days anyhow.After which time of course the crackpots on here can pontificate about how the first time buyers who hit the skids shouldn't have bought what they couldn't afford.

 

So here's the sticking point as I see it. The prices are high due to demand and lack of supply. You need to boost supply but houses and land costs are expensive, this is partly due to the material costs and costs of employing the relevant trades to do the job. So new houses are not going to go down in price by much in any circumstances. The answer is build more houses by either subsidising the house builders or by subsidising the buyers.

 

---------- Post added 18-03-2015 at 21:40 ----------

 

Gordon Brown started the scrapage scheme, that gave car buyers £2000 discount on a new car, was that a good idea for aspirational car owners?

 

http://en.wikipedia.org/wiki/Vehicle_scrappage_scheme

 

The motivation for it was to support the car industry and reduce emissions. Given that you already had to own a car to scrap one, it could lead to substantial savings in running costs. The reasoning behind it is the same as the decision to cut VAT to 15%. It's to get money flowing around the economy.

[Guest sibon]

So here's the sticking point as I see it. The prices are high due to demand and lack of supply. You need to boost supply but houses and land costs are expensive, this is partly due to the material costs and costs of employing the relevant trades to do the job. So new houses are not going to go down in price by much in any circumstances. The answer is build more houses by either subsidising the house builders or by subsidising the buyers.

 

Or by reforming planning laws. Intelligent building on selected bits of the green belt would cause a drop in house prices, simply because it would cause a drop in land prices.

 

There are pretty strong vested interests to overcome though. Those land bankers wouldn't like that solution.

[biotechpete 10]

Or by reforming planning laws. Intelligent building on selected bits of the green belt would cause a drop in house prices, simply because it would cause a drop in land prices.

 

There are pretty strong vested interests to overcome though. Those land bankers wouldn't like that solution.

 

Yes green belt is cheaper but then it makes brown belt development less attractive so the counter balance would be a hollowing out of our city centres.

[Guest sibon]

Yes green belt is cheaper but then it makes brown belt development less attractive so the counter balance would be a hollowing out of our city centres.

 

Depends how you do it. Subsidise brown field development, free up some land in the green belt. Allow councils to build houses again, for rental. Invest tax money into building apprenticeships.

 

Pretty soon you'll have a virtuous circle of lower house prices and higher employment.

[El Cid 220]

 

The motivation for it was to support the car industry and reduce emissions. Given that you already had to own a car to scrap one, it could lead to substantial savings in running costs. The reasoning behind it is the same as the decision to cut VAT to 15%. It's to get money flowing around the economy.

 

I am aware of the reasons why Gordon Brown did it, but its more double taxation, criticised now, but not so much at the time.

Do you think it worked and was a good idea, perhaps we should do it 24/7?

[biotechpete 10]

Depends how you do it. Subsidise brown field development, free up some land in the green belt. Allow councils to build houses again, for rental. Invest tax money into building apprenticeships.

 

Pretty soon you'll have a virtuous circle of lower house prices and higher employment.

 

I'm not convinced by the council building argument. It strikes me that they would employ a private sector builder in any case so ultimately it's a route to inefficient building in places few people want to live.

 

The rest sounds a lot like policy I have heard from (mainly lib dem) sections of government.

[Guest sibon]

 

The rest sounds a lot like policy I have heard from (mainly lib dem) sections of government.

 

In which case, they should get on and do it.

 

They are the Government after all.

[biotechpete 10]

I am aware of the reasons why Gordon Brown did it, but its more double taxation, criticised now, but not so much at the time.

Do you think it worked and was a good idea, perhaps we should do it 24/7?

 

It obviously worked in as much as it boosted car sales. I'm not generally in favour of long term subsidy simply because it leads to inefficiency. It's a reasonable policy though in times of economic disaster to pull on economic levers. I do believe that this is a role of government rather than to stand by and do nothing. Neither do I advocate constant tweaking of the minutiae of policy as Brown did.

[tinfoilhat 11]

In which case, they should get on and do it.

 

They are the Government after all.

 

They are making the numbers up in government to give themselves an illusion of power. Dave gives them the odd titbit to keep them sweet but they haven't pushed much through have they?

[El Cid 220]

It's a reasonable policy though in times of economic disaster to pull on economic levers. I do believe that this is a role of government rather than to stand by and do nothing. Neither do I advocate constant tweaking of the minutiae of policy as Brown did.

 

So you think it worked, so it was right.

 

What effect do you think this policy will have on house prices?

[Guest sibon]

They are making the numbers up in government to give themselves an illusion of power. Dave gives them the odd titbit to keep them sweet but they haven't pushed much through have they?

 

Nothing has happened for about a year. Maybe they should all give their salaries and expenses back:)

 

The stuff that I suggested above ought to gain cross party support. It is simple common sense. We need houses, we need work. Build houses and employ people. We've got loads of land, use some of it to bring the price of building land down.

 

The trouble is that doing so would precipitate a house price crash. That would do us all good in the long run. It would cost some votes though:)