Budget 2013 house builder subsidies

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!

Re: Budget 2013 house builder subsidies

That's the trouble with all these schemes, they rely on the integrity of private businesses not to exploit the extra market capacity, in pursuance of ever greater profits, still, that is the nature of the beast

Re: Budget 2013 house builder subsidies

Government interference in the market place no matter how well meaning always creates bubbles and distortions.

First home buyers schemes here just pushed the price of houses up by more than the subsidy because of the extra demand.

Re: Budget 2013 house builder subsidies

It is even worse.
After five years buyers would be paying the government A FEE of 1.75% rising by RPI inflation plus 1% a year.
And they cant reply the government loan until the mortgage is paid off in full or the home is sold.

A very British sub prime mortgage crisis and property bubble.
All on credit again! When will they STOP betting on RED?

Re: Budget 2013 house builder subsidies

I think maybe we have to find a new Commodity to back up the currency.
That will porbably Bricks (and mortar)