Grant Shapps and David Cameron are proud to unveil the NewBuy guarantee scheme which will help buyers get their foot on the first rung of the property ladder.The initiative is aimed at supporting close to 100,000 people to buy new-build homes worth up to Â£500,000 in an attempt to revitalise Britain's flagging property market and breath new life into the construction industry.
This is the second such scheme targeted towards theÂ aforementionedÂ industries, the first being the new right to buyÂ scheme where council tenants will see up to Â£75,000 discounted off of the purchase price of their council homes if they elect to buy them.
All sounds rather good wouldn't you say?
Well perspective is required here in terms of who stands to pay for what and why.
Everyone wants to own their own home and the generalÂ consensusÂ in stats show that first time buyers are close to 40 years of age, seeing as it takes half a lifetime or more to be able to save up a deposit and to get a job that earns the wages necessary to support the now more stringent mortgage repayment requirements.
The NewBuy scheme is geared towards new-build homes where 95% loans will be madeÂ easierÂ to come by – underwritten by the taxpayer though, but this is only going to create a bottle neck with older properties and potentially devalue them.
I cannot see the latest governmental thrust to prop up the property market and construction industry as anythingÂ other than socialising debt even further and goes against all capitalist free market principles. Yet the middle classes who make up the bulk of Tory supporters will lap this up because the free market conservative core value will always come second place to the 'home-ownerist/my home is my pension' ethos.
The socialising of debt where the tax payer foots, or at least guarantees, any loan only benefits those who will be charging interest on said loan and it smacks of corporate fascism.
How David Cameron and Grant Shapps can ever stand onÂ theÂ podiumÂ and say that 'Crony Capitalism' must end when they both endorse crony capitalist politics through such initiatives as the NewBuy guarantee scheme is beyond me and it clearly shows that they are preparing policies that not only fly in the face of the free market but actually oppose it.
Propping up house prices benefits no one (except the lenders).
Now that is a statement which usually gets most people with mortgages backs up because of the spectre of negative equity and being unable to move off of whichever rung on the housing ladder they find themselves on.
But first one must question, why we should allow such a thing as negative equity to exist? And why should banks be allowed to repossess homes?
After all banks are simply making money on loan interest earned against assets with the loan itself being hypothetical in nature only within a fractional reserve structure, then cultivating a desire for debt throughÂ aggressively marketing cheap loans and the benefits of getting into debt.
Then when it all collapses the banks request assistance from the tax payer, which allows them to continue in a model which inflates house prices in a huge ponzi scheme thatÂ ultimatelyÂ will lock out first time buyers andÂ ghettoise areas for the 'can afford a house' against those who 'cannot afford a house'. And allowing the proliferation of buy-to-let landlords in the process.
What kind of society do we want to live in? One where two parents must work to service a mortgage throwing more money into a banking system creating mortgage slaves or one whereÂ disposableÂ income feeds the internal economy and people actually get to live a little.
Modern debt jubilee of the non-inflationary sort anyone?