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Monday, 29 July 2013

Help to buy scheme

The help to buy scheme could be a good idea if there were more controls attached to it and the government had the funds to underwrite the programme. But as it happens what is being done is a repeat of what thw USA did a few years ago when banks were encouraged to lend on houses up to 100%

The housing market is extremely volotile and what is a solid investment today will be a useless one in a few months time. Governments that put themselves in a position where they gurantee mortgages will have to find a way to pay out the debt when a lot of people will be in nagative equaty and lose what they have. A repeat in other words of what happened in the USA in 2007 which led to the world recession??

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