The Times again outlined New Labour’s mortgage rescue plan to prop up the housing market. This is how the Times described it:
"Alistair Darling, the Chancellor, and Caroline Flint, the Housing Minister, are planning to announce an emergency “mortgage rescue” package next week. Under the plan councils will be encouraged to offer low-income families at risk of repossession the chance to sell a stake of their houses in return for financial help. First-time buyers will also be given more council-backed assistance with deposits and town halls will be given extra money to buy up empty, unsold new property. A more radical proposal under which councils would have been freed to compete as mortgage lenders with access to a pot of £2 billion in government borrowing has been vetoed by Mr Darling. Instead he is likely to extend a Bank of England guarantee designed to boost confidence among existing lenders."
So what do we have here? Local authorities will provide mortgage deposits, buy unsold properties, and take over the debts of people on the edge of repossession. Darling rejected the idea of turning our councils into mortgage providers, but will be extending government guarantees through our central bank.
The plan provoked an outraged response from readers. I picked up a few of the comments, which give a flavour of how this scam will go down with the public.
“This is throwing good money after bad. Please can the government explain the rationale for trying to keep house prices inflated above an historical equilibrium? The government is basically giving our taxes away to the reckless and greedy. “ A Nelson, Newcastle, UK
“Great, so my tax money, money I've worked hard for, is to be used to prop up a grossly unfair and unsustainable system. This is robbery of the young to keep the house price party going for the soon-to-retire. Criminal, simply criminal. “ Bob Jones, London, London
“The taxpayer is being asked to foot the bill for the folly of foolish buyers who have paid far too much for their houses. More fool them - why should I, as a prudent non-debtor, prop up their excesses and the crazy prices they have paid? Peter Kiddle , St. Neots, UK
“Will the council help me out if I fall behind on payments for my new plasma TV and Lexus? No, why should housing be any different? Let’s also factor in the fact that half of them can't even afford weekly bin collections, now they're selling mortgages. Sometime I wonder why I work and save!” Paul, Camberley,
“Why should the taxpayer be asked to bolster a grossly over inflated property market? Local authorities will be taken for a ride when buying unsold property from developers at inflated prices.” Allan, Inverness.
Of course, I sympathize with these people. I share their pain and anger. However, we are missing the big picture here. This mortgage rescue plan is not about helping the housing market; it is about reversing a key pillar of the Thatcher legacy – council house sales. Labour – new and old – always hated those sales, and the popularity it gave the Conservatives. Now, the housing crash has offered the opportunity of some payback, or should I say buy-back.
Socialized housing is about to make a come back.