Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : The Hot Button Questions:- Money, Banks, & the Economy -- Ignore unavailable to you. Want to Upgrade?

To: maceng2 who wrote (785)	5/24/2005 2:20:20 AM
From: maceng2	Read Replies (1) \| Respond to of 1417

Brown Outlines More Help for First-Time Buyers By Rachel Williams and John Deane, PA news.scotsman.com also telegraph.co.uk Chancellor Gordon Brown today outlined plans to give up to 100,000 first-time buyers financial assistance on to the housing ladder. The scheme, which will see couples having to raise as little as half the cost of homes sold on the open market under a deal struck between the Government and mortgage lenders, received a broad welcome in the industry. The rest of the equity in the property would be shared between the Government and the bank or building society, potentially cutting average repayments on a £200,000 home by up to £372 a month. But the plans also prompted a warning that unless it went hand in hand with an increase in housing supply, it would risk fuelling price rises. The Halifax welcomed the scheme as “very, very good”. “The housing market depends on first-time buyers – they are almost its heartbeat,” a spokesman said. “We need them to keep it healthy. Without them it slows down, so initiatives like this are very, very good.” Sue Anderson, of the Council of Mortgage Lenders, which has been involved in the development of the scheme, said it was a “very positive” step. But she added: “We’ve got to see more housing supply accompanying this, otherwise there’s the risk that all you do is push up house prices further. “At the moment we’re trailing way behind demand in terms of housing supply.” The scheme will not be restricted to the key public sector workers previously helped by the Government, and there will be no means test. However banks and building societies will have to sift out deserving applicants whose salaries do not stretch to the average-priced house, from those angling to buy dream homes beyond their means. Interviewed today on BBC 1’s Breakfast with Frost, Mr Brown said he believed that ‘shared equity schemes’ would help up to 100,000 people over the course of the Parliament. Mr Brown, who will unveil details of the initiative on Wednesday, told the programme the Government was moving on to the next stage of its economic policy. “We have created stability in this country, and now we must ensure that the benefits go particularly to young couples who want to own their own homes, who find that house prices have been high, who could benefit from low interest rates, but they need some help to get on to the first rung of the housing ladder,” he said. The move comes amid signs of a gradual slowdown in the housing market, with recent figures showing house sales in London at their lowest levels in a decade. If new buyers cannot enter the market, selling chains could eventually grind to a halt, potentially undermining the rising property market which in recent years has helped to keep consumer demand and the wider economy buoyant. Under the plans, the buyers would need to raise mortgages ranging from 50% to 75% of the cost of the property. The rest of the equity would be split between the Government, the lender or possibly the house-building company. Buyers would pay a nominal ‘rent’ of no more than 3% on the part they do not own, with the option to buy the whole stake if their fortunes improve. The scheme, which would be run by the Office of the Deputy Prime Minister in partnership with local housing associations, would focus on new build properties. A Treasury source stressed that although there would be upfront costs, it was essentially a form of investment. Theoretically, if the value of a property declined after it was purchased, it would be the Government’s stake which would bear the brunt of the loss. In the more likely event that the property’s value increased, the Government would be entitled to a percentage of the profit. Liberal Democrat Treasury spokesman Vince Cable cautioned: “There is a danger that this money will be wasted and benefit only house-buyers who do not need it, such as speculative buyers.” Along with Deputy Prime Minister John Prescott and housing minister Yvette Cooper, Mr Brown will on Wednesday also unveil plans to release more land for house building, cut the costs of construction and ease planning rules.

To: maceng2 who wrote (785)	8/5/2005 8:40:11 PM
From: maceng2	Read Replies (1) \| Respond to of 1417

BoE cuts interest rates, may hold for a while today.reuters.co.uk LONDON (Reuters) - The Bank of England cut interest rates on Thursday by a quarter point to 4.5 percent to shore up weakened household and business spending, but analysts said the central bank would probably wait a while before another move. The Monetary Policy Committee's first cut in rates in two years comes as economic growth in the world's fourth largest economy has cooled rapidly and was widely expected by analysts and financial markets. In explaining its move, the central bank said while there were signs that consumer spending may be picking up, the threat remained that spending could weaken further. But the BoE also said that a rising stock market -- now trading at its highest in more than 3-1/2 years -- and the recent fall in the pound should boost future growth, which most analysts said signalled any future move is probably a way off. It also said that rising oil prices, which are trading near record highs, could push up inflation in the near-term. "This move represents a bit of economic fine-tuning on the MPC's behalf, with a view to shoring up domestic demand. Rates may fall further yet, but the Committee will not be in any great hurry," said Andrew McLaughlin, chief economist at the Royal Bank of Scotland Group. Next week's quarterly Inflation Report, where the BoE outlines in detail its outlook for growth and inflation, is key to where rates will go in coming months. Most expect the outlook for growth to have deteriorated -- some say significantly -- since the last set of forecasts were made, in part following recent extensive revisions to what growth looked like in the recent past. In any case Thursday's cut in borrowing costs, decided at the 100th meeting since the MPC's inception, came as little surprise given that four of the nine members had already voted for such an easing in July. The European Central Bank left its base interest rate unchanged at 2 percent, where it has remained for more than two years, as surveys suggesting business conditions are improving backs its view that growth there will gather momentum. Short-dated government bond yields fell, while short sterling interest rate futures rose modestly after the BoE's decision as some dealers bet rates could fall again, but not likely until late this year. CONSUMER REMAINS KEY Deadly bomb attacks on London during the last few hours of the MPC's July meeting and a botched plot two weeks later had also boosted calls for a rate cut to shore up confidence, although so far they don't appear to have damaged the economy. The BoE made no mention of the bombings in its statement. The economy was slowing long beforehand, led by a slowdown in consumer spending as the housing market has cooled following five interest rate hikes between November 2003 and last August. "Although there are some signs of a pickup in consumer spending, downside risks remain in the near term," the BoE said in its statement. Economic growth slipped to its weakest pace in 12 years in the second quarter and even the labour market, while still in good shape by historical standards, appears to be on the turn. Some analysts doubt that household spending was likely to improve in the near term, despite an unexpectedly strong 1.3 percent jump in June retail sales. "We don't see any significant signs of any likely improvement in activity. Consumer spending is still weak, manufacturing is in recession and that is likely to spread to the service sector," said James Knightley, economist at ING Financial Markets. "I think they will need to do more". But others had questioned the need for a move now following the pound's sharp fall and the fact that inflation is currently at the MPC's government-set target of 2 percent. Melanie Baker, economist at Morgan Stanley who was one of a handful of city analysts who forecast rates would remain on hold called the cut "largely precautionary." "Recent data does not justify a series of rate cuts, in our view. Further, the risk of re-igniting the housing market and further ramping up household debt levels mean that this rate cut is unlikely to mark the start of a series of cuts," she said. © Reuters 2005. All Rights Reserved.