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First-time buyers to be "helped" into negative equity
Many thousands of vulnerable would-be homeowners have been cynically targeted by what could prove to be one of the biggest financial mis-selling scandals of recent years, writes Greg Mullet, DeadBrain's overworked Spin Affairs Correspondent.
The Government's much-vaunted HomeBuy shared ownership scheme has by all accounts sent dodgy pensions companies, purveyors of dot-com unit trusts and even timeshare touts into apoplectic rage that they do not enjoy the seeming imperviousness to financial regulatory sanctions which the Government and its minions evidently feel they do.
DeadBrain can sensationally reveal, as can any journalist who wants to do more than parrot Treasury spin, that the HomeBuy proposal documents are largely based on sketchy at best research (some of which was helpfully withheld until 2 weeks before the public consultation ended), mostly dating back rather conveniently 3-5 years ago to a time when the house price surge seemed unstoppable.
"It did strike me as rather odd," Mullet comments, "that the HomeBuy proposals entirely fail to mention that the property boom is now well and truly over, that any number of economic forecasts and indicators (including the ODPM's own) back this up, that many financially savvy homeowners have been 'helped' by selling up and getting off the property ladder rather than on it, and that waiting for prices to fall might in many cases be a rather good idea."
He added, "Well, better than buying a 50% share of a vastly overpriced, miniscule, depreciating newbuild rabbit-hutch with all the strings attached - even restrictions on one's choice of job - which HomeBuy can entail. But that's not exactly difficult'."
Of course, as any reputable financial adviser will affirm, it is nothing more than best practice to lure people into entering an asset class at the top of the market on the basis of flawed and years-out-of-date assumptions, especially something as illiquid as property. Few financial advisors, however, enjoy the privilege of doing so with the benefit of a sycophantic and dutiful media spin machine or of subsidising such schemes at taxpayers' expense.
The move has, however, been greeted with enthusiasm in an independent report from leading property developers Shysters & Hutchbuilders who currently have 100,000 "executive studio apartments" languishing on their books, a slew of bad debts from failed off-plan completions, and whose share price was set to plummet overnight on publication of their accounts and which would undoubtedly have fuelled the simmering economic "feel-bad" factor. They, perhaps understandably, have no objection whatsoever to the Government's far-sighted and benevolent munificence in endowing them with a virtually guaranteed (and subsidised) market for their wares.
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