• Contact
  • About
  • Authors
DONATE
NEWSLETTER SIGN UP
  • Login
East Anglia Bylines
  • HOME
  • News
    • All
    • Brexit
    • Education
    • Health
    • Welfare
    • World
    Stephen Toope, Vice Chancellor Cambridge

    Lack of access to EU funding could lead to “brain drain” – Cambridge Vice-Chancellor

    Owners of the wooden Dutch built yacht ordered to leave the UK.

    Soviet-style border force order Dutch couple to abandon sailing holiday and go home

    A&E

    Crisis looming for Southend Hospital and the Mid and South Essex NHS Trust

    Luton town hall

    Luton Deputy Mayor regrets Covid breach

    Liz Truss

    EU taking legal action against UK over Northern Ireland protocol: how did we get here?

    Rook

    Northern Ireland Protocol Bill results in Cambridge lab losing its EU funding

    17 May BPI occupation

    BP hypocrisy on climate challenged by Cambridge sit-in

    People in masks

    Eight changes the world needs to make to live with COVID

    Queen Elizabeth II Crossing

    Anxiety grows over viability of planned Lower Thames Crossing

    • Brexit
    • Health
    • Education
    • World
  • Opinion
  • Politics
    • Local government
    • Justice
    • Activism
  • Climate
    • Environment
  • Lifestyle
    • All
    • Community
    • Culture
    • History
    • Humour
    Stapleford Granary concert hall

    July classical events at Stapleford Granary, Cambridge

    Suffolk SketchFest is back

    Traditional beers by the Brentwood Brewing Company.

    Brentwood’s own craft beer company

    People in masks

    Eight changes the world needs to make to live with COVID

    Norwich Floods in 1912: handing a loaf to a flooded-out cottager

    Spectre of 1953 looms as East Anglia faces flood warnings

    University of East Anglia. Photo by Michael John Button via Flickr (CC BY-SA 2.0)

    A civic university for the East

    Southend Section 60 map

    Police issue Dispersal Order in Southend

    Ukraine wins Eurovision 2022

    Sam Ryder helps Eurovision’s possible return to the UK

    Robert Walpole

    Walpole: When did the end game begin?

    • Community
    • Culture
    • History
    • Humour
    • Property
  • Business
    • All
    • Economics
    • Finance
    • Transport
    RMT Ipswich Branch

    Mick Lynch and a new wave of trade unionists

    Traditional beers by the Brentwood Brewing Company.

    Brentwood’s own craft beer company

    Sunak & Johnson

    The economics of the government’s pay disputes don’t stack

    Queen Elizabeth II Crossing

    Anxiety grows over viability of planned Lower Thames Crossing

    Rishi Sunak

    There is a solution to public sector pay disputes if the government wants to find one

    'For sale' boards.

    Housing Association “Right to Buy” proposal is ‘just wrong’ say experts

    East Anglia One windfarm

    One in three Suffolk manufacturing jobs lost since Tories came to power

    Foodbank parcels

    Hunger crisis: is it a national emergency?

    Mortgage debt.

    Sub-prime from Hollywood farce comes to UK housing

    • Economics
    • Finance
    • Transport
    • Farming
  • ANGLIA
    • All
    • Anglia
    • Bedfordshire
    • Cambridgeshire
    • Essex
    • Hertfordshire
    • Norfolk
    • Suffolk
    Hedgehog

    Crisis as falling volunteer numbers threaten Norfolk hedgehogs with potential extinction

    Stephen Toope, Vice Chancellor Cambridge

    Lack of access to EU funding could lead to “brain drain” – Cambridge Vice-Chancellor

    Fuel pumps

    Frustration at the cost of fuel sees protests returned to East Anglia

    Saffron Walden turf maze

    Essex town fighting health threat of poor air quality

    Latton Island campaigners

    Rich and poor dispute new Essex river crossing

    Owners of the wooden Dutch built yacht ordered to leave the UK.

    Soviet-style border force order Dutch couple to abandon sailing holiday and go home

    Fertiliser spreading

    Fertiliser – Where there’s muck…

    Stapleford Granary concert hall

    July classical events at Stapleford Granary, Cambridge

    A&E

    Crisis looming for Southend Hospital and the Mid and South Essex NHS Trust

    • East Anglia
    • Bedfordshire
    • Cambridgeshire
    • Essex
    • Hertfordshire
    • Norfolk
    • Suffolk
  • Series
No Result
View All Result
  • HOME
  • News
    • All
    • Brexit
    • Education
    • Health
    • Welfare
    • World
    Stephen Toope, Vice Chancellor Cambridge

    Lack of access to EU funding could lead to “brain drain” – Cambridge Vice-Chancellor

    Owners of the wooden Dutch built yacht ordered to leave the UK.

    Soviet-style border force order Dutch couple to abandon sailing holiday and go home

    A&E

    Crisis looming for Southend Hospital and the Mid and South Essex NHS Trust

    Luton town hall

    Luton Deputy Mayor regrets Covid breach

    Liz Truss

    EU taking legal action against UK over Northern Ireland protocol: how did we get here?

    Rook

    Northern Ireland Protocol Bill results in Cambridge lab losing its EU funding

    17 May BPI occupation

    BP hypocrisy on climate challenged by Cambridge sit-in

    People in masks

    Eight changes the world needs to make to live with COVID

    Queen Elizabeth II Crossing

    Anxiety grows over viability of planned Lower Thames Crossing

    • Brexit
    • Health
    • Education
    • World
  • Opinion
  • Politics
    • Local government
    • Justice
    • Activism
  • Climate
    • Environment
  • Lifestyle
    • All
    • Community
    • Culture
    • History
    • Humour
    Stapleford Granary concert hall

    July classical events at Stapleford Granary, Cambridge

    Suffolk SketchFest is back

    Traditional beers by the Brentwood Brewing Company.

    Brentwood’s own craft beer company

    People in masks

    Eight changes the world needs to make to live with COVID

    Norwich Floods in 1912: handing a loaf to a flooded-out cottager

    Spectre of 1953 looms as East Anglia faces flood warnings

    University of East Anglia. Photo by Michael John Button via Flickr (CC BY-SA 2.0)

    A civic university for the East

    Southend Section 60 map

    Police issue Dispersal Order in Southend

    Ukraine wins Eurovision 2022

    Sam Ryder helps Eurovision’s possible return to the UK

    Robert Walpole

    Walpole: When did the end game begin?

    • Community
    • Culture
    • History
    • Humour
    • Property
  • Business
    • All
    • Economics
    • Finance
    • Transport
    RMT Ipswich Branch

    Mick Lynch and a new wave of trade unionists

    Traditional beers by the Brentwood Brewing Company.

    Brentwood’s own craft beer company

    Sunak & Johnson

    The economics of the government’s pay disputes don’t stack

    Queen Elizabeth II Crossing

    Anxiety grows over viability of planned Lower Thames Crossing

    Rishi Sunak

    There is a solution to public sector pay disputes if the government wants to find one

    'For sale' boards.

    Housing Association “Right to Buy” proposal is ‘just wrong’ say experts

    East Anglia One windfarm

    One in three Suffolk manufacturing jobs lost since Tories came to power

    Foodbank parcels

    Hunger crisis: is it a national emergency?

    Mortgage debt.

    Sub-prime from Hollywood farce comes to UK housing

    • Economics
    • Finance
    • Transport
    • Farming
  • ANGLIA
    • All
    • Anglia
    • Bedfordshire
    • Cambridgeshire
    • Essex
    • Hertfordshire
    • Norfolk
    • Suffolk
    Hedgehog

    Crisis as falling volunteer numbers threaten Norfolk hedgehogs with potential extinction

    Stephen Toope, Vice Chancellor Cambridge

    Lack of access to EU funding could lead to “brain drain” – Cambridge Vice-Chancellor

    Fuel pumps

    Frustration at the cost of fuel sees protests returned to East Anglia

    Saffron Walden turf maze

    Essex town fighting health threat of poor air quality

    Latton Island campaigners

    Rich and poor dispute new Essex river crossing

    Owners of the wooden Dutch built yacht ordered to leave the UK.

    Soviet-style border force order Dutch couple to abandon sailing holiday and go home

    Fertiliser spreading

    Fertiliser – Where there’s muck…

    Stapleford Granary concert hall

    July classical events at Stapleford Granary, Cambridge

    A&E

    Crisis looming for Southend Hospital and the Mid and South Essex NHS Trust

    • East Anglia
    • Bedfordshire
    • Cambridgeshire
    • Essex
    • Hertfordshire
    • Norfolk
    • Suffolk
  • Series
No Result
View All Result
East Anglia Bylines
No Result
View All Result

Sub-prime from Hollywood farce comes to UK housing

The government's plan to tackle the housing crisis is to take the bad ideas from the film “The Big Short” and repeat them almost identically.

J.J. JacksonbyJ.J. Jackson
June 13, 2022
in Economics, Politics, UK
Mortgage debt.

Mortgage debt. Photo by LifeTreeLLC We Buy Houses via Flickr (CC0)

Share on FacebookShare on Twitter

Last week the Prime Minister announced a number of policies to help tackle a range of issues, including housing. These included the right for residents of Housing Associations to buy their houses, and those on Universal Credit (UC) to be able to use that money towards paying a mortgage.

The plan would impact the more than fifteen Housing Associations (Registered Social Landlords) operating in East Anglia, which own or manage over fifty thousand homes. It has widely been criticised as unworkable, mostly because the government does not own either the RSL’s or their properties. Shelter, the tenants’ rights charity, were scathing in their response: “The prime minister’s housing plans are baffling, unworkable, and a dangerous gimmick.”

Few details

Details are scarce with little information on how the scheme will operate. This includes figures on who may be eligible and whether there will there be financial support for the deposit needed for the mortgage. With over 8% of the population in the East of England in receipt of UC, it is easy to see why this proposal may be attractive to those struggling to get on the housing ladder.

The proposal to allow people in receipt of UC to use it to fund a mortgage, has created the most headlines. Many have pointed out that it seems to have the same elements as the US Mortgage bubble which led to the global financial crisis of 2008.

Sub-prime disaster

The word ‘Sub Prime’ was coined in the United States. It describes a type of mortgage debt where the person applying for the mortgage is not deemed to have a high enough credit score or does not have enough income to be offered a conventional mortgage. It is considered a higher than average risk of resulting in a default, and consequently these mortgages tend to have higher interest rates to offset the risk to the lender.

The US federal interest rates rose from under 1% in 2004 to over 5% in 2006 in order to combat inflation. The result was that many home-owners went into arrears and their properties were repossessed. It was the widespread speculation on bonds containing the debts associated with these mortgages that led to the 2008 financial crisis. This was because the value of the properties did not cover the amount of money owed on the bonds.

A major hole in the scheme

At a time when people are struggling to cope with finding money to pay for food or fuel, the notion that a person on Universal Credit is going to be able to find the extra cash needed to pay a mortgage, seems implausible. This is especially so should the interest rate increase, as it has has done three times this year so far, to combat recent inflation.

Brexit has seen the UK move away from regulatory alignment with the EU’s financial markets, which may result in a loosening of the strict regulations established after the financial crash. The government’s proposals for housing could be the first step to recreating the same sequence of events that eventually led to austerity. The irony is that segment of the population who would be the worst affected by this would be those on Universal Credit.


More from East Anglia Bylines

Fuel poverty caused by Tory policy. Photo by Katrina_S on Pixabay (CC BY 2.0)
Anglia

East among hardest hit this winter when poverty may mean eat or heat

byRob Colwell
October 6, 2021
Previous Post

Priti Patel: “World-leading migration policy”

Next Post

Unnecessary new pylons marching across our countryside

J.J. Jackson

J.J. Jackson

J. J. Jackson has lived in East Anglia all his life.

Related Posts

Johnson cabinet meeting before resignations.
Party politics

Johnson’s dominoes begin to fall: who will be the last one standing?

byPeter Thurlow
July 6, 2022
Fuel pumps
Activism

Frustration at the cost of fuel sees protests returned to East Anglia

byJ.J. Jackson
July 4, 2022
House of Commons
Politics

GrubbyGates

byMadge McClary
July 3, 2022
RMT Ipswich Branch
Activism

Mick Lynch and a new wave of trade unionists

byJessica Walsh
June 29, 2022
Keir Starmer
Politics

Security matters for Labour

byStephen McNair
June 27, 2022
Next Post
Pylons in Essex

Unnecessary new pylons marching across our countryside

Want to support us?

Can you help East Anglia Bylines to grow and become more sustainable with a regular donation, no matter how small?  

DONATE

Sign up to our newsletter

If you would like to receive the East Anglia Bylines regular newsletter, straight talking direct to your inbox, click the button below.

NEWSLETTER

LATEST

Hedgehog

Crisis as falling volunteer numbers threaten Norfolk hedgehogs with potential extinction

July 6, 2022
Johnson cabinet meeting before resignations.

Johnson’s dominoes begin to fall: who will be the last one standing?

July 6, 2022
Stephen Toope, Vice Chancellor Cambridge

Lack of access to EU funding could lead to “brain drain” – Cambridge Vice-Chancellor

July 5, 2022
Fuel pumps

Frustration at the cost of fuel sees protests returned to East Anglia

July 4, 2022

MOST READ

Johnson cabinet meeting before resignations.

Johnson’s dominoes begin to fall: who will be the last one standing?

July 6, 2022
Stephen Toope, Vice Chancellor Cambridge

Lack of access to EU funding could lead to “brain drain” – Cambridge Vice-Chancellor

July 5, 2022
Pylons at Aldringham, Suffolk

Shock as National Grid proposes 180km of new pylons across East Anglia

May 15, 2022
Hedgehog

Crisis as falling volunteer numbers threaten Norfolk hedgehogs with potential extinction

July 6, 2022

Tags

Activism Art Brexit Business Cambridgeshire Climate Community COP26 Culture Democracy Development Economics Economy Education Employment Energy Environment Farming Health Humour Hymns International Women's Day Justice Letters Local elections 2022 Local government National Grid NHS Norfolk Pandemic Partygate Party politics Pecksniff Poetry Politics Poverty Rivers of East Anglia Sewage Sizewell Social care Suffolk Ukraine VAWG Welfare Wildlife
East Anglia Bylines

East Anglia Bylines is a regional online newspaper that supports citizen journalism. Our aim is to publish well-written, fact-based articles and opinion pieces on subjects that are of interest to people in East Anglia and beyond.

Learn more about us

No Result
View All Result
  • About us
    • Contact us
    • Bylines Network
    • Complaints
    • Newsletter
    • Privacy Policy
    • Donate
  • UK
  • Anglia
  • About us
  • UK
  • Anglia

© 2022 East Anglia Bylines. Citizen Journalism | Local & Internationalist

No Result
View All Result
  • HOME
  • News
    • Brexit
    • Health
    • Education
    • World
  • Opinion
  • Politics
    • Local government
    • Justice
    • Activism
  • Climate
    • Environment
  • Lifestyle
    • Community
    • Culture
    • History
    • Humour
    • Property
  • Business
    • Economics
    • Finance
    • Transport
    • Farming
  • ANGLIA
    • East Anglia
    • Bedfordshire
    • Cambridgeshire
    • Essex
    • Hertfordshire
    • Norfolk
    • Suffolk
  • Series

© 2022 East Anglia Bylines. Citizen Journalism | Local & Internationalist

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In