- 04
- Sep
Yesterday the government announced what were intended to be some sweeping measures designed to rescue both the housing market from its freefall.
The measures included helping out beleaguered homeowners who had fell behind on loan repayments; offering equity loans to buyers and giving a stamp duty holiday under a new threshold.
So far most commentators on the new schemes have been singularly unimpressed, particularly financial advice site, Moneysupermarket.com.
“The Government plans are certainly high on rhetoric, but lacking in fundamental help,” claimed Louise Cuming, head of mortgages at moneysupermarket.com.
Cuming states that some factors of the scheme are not just unworkable, they also encourage financial irresponsibility by bailing out homeowners who have dragged themselves into debt.
The view that the ‘British Debt Mountain’ is the fault of irresponsible lenders is a popular one in some quarters. Many have claimed that the vast amount of personal loan and credit card debt is due to lenders pushing ‘easy credit’ at borrowers who had little chance of repaying.
Cuming also points out that the plan for offering buyers 30% equity loans is also unrealistic: “this is simply a rehash of the tired old share equity story,” she says.
“This will inevitably only help a fortunate minority as it is co-funded by government and developers, and thus only available on an insignificant number of properties.”
