March 20 (Reuters) – Cry ‘Bubble!’ and let slip the dogs of
Britain on Wednesday unveiled a new budget including 130
billion pounds of mortgage guarantees which will enable patsies,
er, hardworking home-buyers, to buy properties worth as much as
600,000 pounds ($900,000) with as little as 5 percent down.
And no, thank you for asking, Chancellor of the Exchequer
George Osborne did not just wake up after six years in a
medically induced coma.
A smaller 3.5 billion pound program features a direct loan
of 20 percent of the purchase prices for newly built houses, so
long as the borrower has (a massive) 5 percent to put down.
These are truly terrible policies; they risk re-inflating a
housing bubble, will allow banks to transfer risk to the public
finances and will lure people into buying more house than they
have any business owning.