Leasing Houses

OK, we all know what's going on here:

• every company on the planet from Microsoft downwards is trying to find ways of setting up reliable income streams (rather than just a one-off sales-price)  -  an 'annuity stream' of good quality is highly bankable, and raises the share price.  House-builders are no different

• anyone signing up for a rising / indexed / variable ground-rent & lease-related charges has a lousy lawyer, and/or is bonkers or stupid (or ought to be discounting the house price heavily)  

• but caveat emptor can't be the whole story in the real world: people are indeed badly advised / ignorant / bonkers / lazy / irrational etc and - sadly - need to be saved from themselves in some circumstances

• oh, and May has asked all departments for zero-cost initiatives to be seen to be doing something popular

So - does the C@W crew reckon dodgy leases on houses is one such case where the punter needs protection?  Or is the government meddling where it's not needed, thanks - just Sajid Javid responding to May's call?   

Answers on a postcard below ...

ND

The new Government asset bubble

A keen eyed commenter on the previous thread has pointed out this article in the Telegraph.

All the comment in the article is that this is a positive thing to help people out, as if mortgage lending were some kind of social service rather than a straight commercial agreement.

We may feel for people stuck in negative equity, but they were all warned not to buy houses at the top of the market on unsustainable borrowing rates. Caveat Emptor.

What this is proof of is the theme I have run since last weeks scoop (I notice none of the MSM have taken it up, Guido has stolen all their focus). The Banks are being told to lend by the Government. They have targets to hit. This is one way of doing it, not only by getting more money into the market but also pleasing the socialist government by keeping the unable to pay in their homes.

The second huge issue here is that this sort of behaviour will affect property prices again. It will contribute to prices stabilising at too higher rate...if it works. If it does not then these 120% LTV's will soon be 150%+ LTV's - at that rate why would you not just had back the keys, what is the point after all.

We all need to keep a look out for how the mendacious government interference is going to affect us all and the markets they are interfering with. The law of unintended consequences is the clear here in the statue book of UK plc.

I can't wait to see what Alice thinks of it....