The Live 2021 Budget Thread

[Bob Morgan]

Personally, I'm pleased to see the headline about the brown field development investment but I don't understand enough about that sector to know the impact. I just like the prospect of less green field development and more utilisation of brown field.

It was announced (Sorry, 'Officially Leaked') By Gove (Mrs Gove, Daily Mail, etc.) last week, and can only be described as 'Woolly and Vague!' - Certainly nothing that would enthuse Developers, aside from the 'Headline Statements!' However, any benefits will be lost with the introduction of a 4% Developer Tax. Ostensibly to overcome the issues of Grenfell and the cladding that was used, the Tax will be levied on ALL Developers with a Profit in excess of £25M. It is a typical 'Exchequer Manouevre' akin to DECREASING the Basic Rate of Income Tax, only to INCREASE National Insurance! - Hence why it was left 'Woolly and Vague!'

 

[Bob Morgan]

MEMO TO SELF: Review again after Interest Rate increases!

Well that was quick! - The Mortgage Cartel acting ahead of the BoE!

 

[Deleted member 59730]

A really bad budget by a Chancellor who hasn't heard of the Climate Crisis. Or even his own party's levelling up agenda.

 

[japancool]

A really bad budget by a Chancellor who hasn't heard of the Climate Crisis. Or even his own party's levelling up agenda.

There was no chance whatsoever of you calling it a good budget, even if you got everything you wanted.

 

[IanSuth]

Whether that is true or not - they dont seem to need outside detractors to make muppets of themselves. Rishi & Bojo did a photocall lugging craft brewery barrels - then it was pointed out they were 30l ones and therefore not covered by his discount which only covers 40l Firkins upwards

How can the PR people make such a fundamental mistake

 

[Paul Norman]

Well that was quick! - The Mortgage Cartel acting ahead of the BoE!

I think the interest rate thing was inevitable, and was dialled in before the budget. Of course, some people, who mortgaged themselves up to their eyeballs just because there was a stamp duty break, will now have to rent out their grannies to pay the mortgage.

Those of us who were around in the 90's saw that, and when we hear people landing mortgages that they will pretty much definitely not be able to pay just smile sagely.

Because the market never learns.

 

[Ozzy]

Those of us who were around in the 90's saw that, and when we hear people landing mortgages that they will pretty much definitely not be able to pay just smile sagely.

Yep, I was there.
I think the problem with the housing market though is too big a problem to fix without a significant correction that will leave huge conglomerates and huge numbers of people out of pocket, and that is a house price correction. The current (and next) generation simply cannot afford to get a step on the property ladder without unrealistic mortgage multipliers never seen in our day, and some form of other financial help (part ownership, etc).

 

[IanSuth]

Yep, I was there.
I think the problem with the housing market though is too big a problem to fix without a significant correction that will leave huge conglomerates and huge numbers of people out of pocket, and that is a house price correction. The current (and next) generation simply cannot afford to get a step on the property ladder without unrealistic mortgage multipliers never seen in our day, and some form of other financial help (part ownership, etc).

Totally agree

And that is because i believe the current housing market is driven by supply and demand of capital and not houses. Every recent surge in prices has been due to extra capital availability, either stamp duty holidays, help to buy schemes or pension deregulation

So when there is a sudden decrease in available capital (as there is bound to be with rising inflation and interest rates) there will be a resultant slump in demand for housing and prices will respond.

I am not sure any Tory govt would dare see them drop hard and fast unless it is as part of a worldwide crash as those home owners are the traditional mass of their voting base so they will do their best to alleviate things.

Personally I would happily see a 50% drop in prices in my area, I reckon that would bring my house down to what I paid 20 yrs ago plus inflation and still put it more expensive that the same house elsewhere in the uk today

 

[Paul Norman]

Totally agree

And that is because i believe the current housing market is driven by supply and demand of capital and not houses. Every recent surge in prices has been due to extra capital availability, either stamp duty holidays, help to buy schemes or pension deregulation

So when there is a sudden decrease in available capital (as there is bound to be with rising inflation and interest rates) there will be a resultant slump in demand for housing and prices will respond.

I am not sure any Tory govt would dare see them drop hard and fast unless it is as part of a worldwide crash as those home owners are the traditional mass of their voting base so they will do their best to alleviate things.

Personally I would happily see a 50% drop in prices in my area, I reckon that would bring my house down to what I paid 20 yrs ago plus inflation and still put it more expensive that the same house elsewhere in the uk today

I think you make a key, and correct, point with your statement that house prices have risen due to capital availability. The stamp duty holiday fuelled a race to complete, and a price hike - in reality, people would have been as well to paid the stamp duty and a lower house price.

That means that as financial markets flex in the post COVID world, and particularly if interest races rise, they will level slightly.

I believe the true correct would not be far away from your 50% in some areas. Allowing that to happen, but at a moderate pace, could bring benefits in the long term. Here in the North East, where prices are, broadly, similar to a decade ago, it is working slightly differently, but even here people chased the prices up during the stamp duty holiday. In reality, though, a two bed house here is still sub £100k, and that makes sense.

 

[The Byre]

This budget will be wiped out by what follows! Nobody will care what this government of schoolboys wanted, other than as minor footnotes to history!

 

[IanSuth]

I believe the true correct would not be far away from your 50% in some areas. Allowing that to happen, but at a moderate pace, could bring benefits in the long term. Here in the North East, where prices are, broadly, similar to a decade ago, it is working slightly differently, but even here people chased the prices up during the stamp duty holiday. In reality, though, a two bed house here is still sub £100k, and that makes sense.

I always thought about 100k makes sense for a starter house, but we have this stupidity. I used to live in this area so speak from experience, these are the lowest level of Huntley&Palmer built terrace housing for workers, you walk into the front room not a corridor and the whole house is only 10'6" wide (they say 12'2" but the chimney breast fills most of the wall so effectively less), the only cheaper ones are those where the 1950's update only put a WC above the kitchen needing access via the back bedroom (this has a bathroom there and a wc behind the kitchen), £260k !!!!!



https://www.zoopla.co.uk/for-sale/d...h_identifier=96b8b8dbc482f36306d1b4e36f34ccdd

 

[Bob Morgan]

I always thought about 100k makes sense for a starter house, but we have this stupidity. I used to live in this area so speak from experience, these are the lowest level of Huntley&Palmer built terrace housing for workers, you walk into the front room not a corridor and the whole house is only 10'6" wide (they say 12'2" but the chimney breast fills most of the wall so effectively less), the only cheaper ones are those where the 1950's update only put a WC above the kitchen needing access via the back bedroom (this has a bathroom there and a wc behind the kitchen), £260k !!!!!



https://www.zoopla.co.uk/for-sale/d...h_identifier=96b8b8dbc482f36306d1b4e36f34ccdd

My Paternal Grandmother worked 'In Service' for the Palmer family in Reading!

 

[IanSuth]

My Paternal Grandmother worked 'In Service' for the Palmer family in Reading!

A lot of the housing stock previously lived in by students and now bought by young professionals is still that which they built (and very few pubs in the area as they were quakers). There is a story that Palmer Park the large park next to A4 & Railway was bought and donated by George Palmer to stop the GWR having any space big enough for a large number of sidings and so the GWR works went to Swindon which meant he didnt need to compete for labour