This Bloomberg chart tells a striking tale. Credit default swaps are a form of insurance on gilts. People buying UK government debt acquire CDS’s to protect themselves against the risk of the country becoming bankrupt. Read more

An extension of the stamp duty cut will probably be in the pre-budget report. After all it would be cheap: figures today showed that the policy has made no difference.

The stamp duty one-year holiday was announced by government ministers with great fanfare two months ago. Ministers raised the minimum threshold at which payment is due to properties selling for more than £175,000, up from the previous threshold of £125,000.

It’s changed nothing – judging by data released today by the Council of Mortgage Lenders. Read more

A worthy code to limit the number of home repossession cases reaching court was issued on Wednesday. It won praise from all sides — lenders, ministers, housing charities, opposition politicians. That alone tells you something is not quite right.The “pre-action protocol” includes all the right things to make repossession a “last resort”. But it does not change the rights of borrowers or lenders. Rather it offers a code for lenders to follow if they want to be more lenient than required by law.

So it says a lender “could” offer to extend the term of a mortgage from, say, 25 to 35 years. But if the lender decides this is a silly idea that will lose him money, a judge lacks the power to make him do it when it comes to court. Cash strapped homeowners have no more legal protection today than they did last week. No wonder lenders are happy. Read more

It has been described by one former cabinet minister as the ultimate Keynesian move  – the nationalisation of the housebuilding industry.

Frank Dobson, former health secretary, said this would be a way of spending money to create “useful wealth”. ”I think he [Mr Brown] has got an appetite for this. He is attempting to minimise the impact on everyone else from banking lunacy and he’ll be looking for anything practical.” Read more

Sam Coates makes a shrewd point about it being a good time for the government to bury bad news.

With all eyes on the global economy, what better time to quietly drop toxic policies such as 42-days detention without trial or key stage three tests? Read more

The prime minister is determined to portray the US as an unrivalled basket case and has ceaselessly blamed the problems in the UK economy on America.

He loves to contrast the US housing bubble with that of the UK. (Regular readers of this blog will remember the nonsense claim that Britain has no subprime lending).   Read more

For some reason the prime minister likes round numbers, whether £1bn for fuel poverty, £1bn for the housing market, 3 million new homes or 1,000 troops home for Christmas. (All of which have turned out to be a tad flakey). Read more

We couldn’t work out why the share prices of major housebuilders leapt yesterday (some by as much as 10 per cent) on the back of the housing package.

My theory was that some stocks are already priced for collapse – or at least for breaching their banking covenants – and are now so low that any glimmer of good news can shift the price upwards. Others thought that the stamp duty holiday and other measures could genuinely make a difference; helping the housebuilders shift their backlog of unwanted homes to some extent.

I still can’t get my head around the maths of the £615m which the government has promised to spend on its stamp duty holiday for those buying a home worth between £125,000 and £175,000.

The figure suggests that – at about £1,500 per home-buyer – about 30,000 people will be helped every month. Read more

persimmon-2.JPGThere has been a mixed reaction to the first part of the recovery plan. But, at least in the equity market, the response has been relatively positive. Shares of struggling housebuilders are rebounding, with Taylor Wimpey up more than 8 per cent and Barratt Developments up more than 5 per cent.

But this may have little to do with stamp duty. A close look at some of the share price movements today suggests they moved up before the stamp duty holiday was announced by press release at 9am. Most housebuilders have been relatively steady since then. Read more

Gordon Brown: “I am allowing you to fulfil the dream of home ownership. You are very fortunate.”

Member of the public: “Thank you prime minister. But will this stamp duty holiday make much difference? Me and the wife earn £40,000 a year between us. We’ve saved up a deposit of £15,000. Last year the banks would lend us £160,000 but now – for some weird reason – it’s only £120,000. So we’re 40 grand short from buying our £175,000 dream home.” Read more

So, the stamp duty holiday for first-time buyers will happen. On homes up to £175,000. And for one year only.

The figure of £615m sounds reasonably generous…until you consider that the housing market is worth over £5 trillion. Read more

Everyone knows that 125 per cent mortgages (Northern Rock et al) were a dreadful, top of the market idea. Most realise that 100 per cent mortgages are also a bad idea. Because a home-owner has no equity in his house, any fall in prices leaves him – immediately – in negative equity.

So what on earth is the new “HomeBuy Direct” scheme which will form part of today’s package of measures to help the housing market? Under the programme, first-time buyers can borrow up to 30 per cent of the value of a new-build home – interest-free for five years – co-funded by both the government and housebuilders. Read more

Newsflash: I’ve just been told that Tesco is withdrawing plans for an ecotown at Hanley Grange, near Cambridge.

We ran the story last week that the wheels were falling off the ecotown project, with three having withdrawn, one having been cut from 15,000 homes to 5,000 and another three – including Hanley Grange – running into difficulties. Read more

Vince Cable held a press conference this morning to outline various ways to ease the pain in the housing market. I’m not sure any of his suggestions will make a massive difference (they include letting housing associations borrow more to buy up empty homes***).

But credit to the Lib Dem Treasury spokesman, who has long been alert on this issue. As he reminds us, Labour MPs were literally laughing at the idea of an imminent housing crash – as recently as the spring. Read more

David Cameron must be spitting tacks. The Tories’ favourite think tank, Policy Exchange, has put out a report urging the government to – in effect – abandon the north.

Why bother using money to prop up dying conurbations on the fringes, the report asked this morning? Wouldn’t we be better off concentrating on London, Oxford and Cambridge? The latter two university towns could expand in the way that Manchester and Liverpool (pictured below) did in the 19th century, it argues.   Read more

I believe it was Viz’s Profanisaurus which coined the term “the fecal touch” as the opposite of the Midas touch. The expression comes to mind as the Treasury lurches through yet another crisis, this time over whether or not it’s going to change stamp duty to give the gift of negative equity to naive youngsters  bring much-needed solace to the housing market.

It’s getting easy to lose track of the litany of screw-ups and volte-faces – from losing discs to U-turning on capital gains tax and non-doms….not forgetting the mother of them all, the £2.7bn compo package for the abolition of the 10p tax rate. Read more

One year after the arrival of Hips and the public aren’t impressed.

A new YouGov poll has found that only 5 per cent of people think the new, compulsory sales packs have delivered benefits. Another 68 per cent said they had failed to make a positive difference. Read more

Anyone who thought my last post was a bit dismal should take a look at ft.com

Our three main headlines today are… Read more

My favourite line from today’s report – “Conduct of Sir Nicholas and Lady Winterton” – lies in the appendices. It is a letter to the standards commissioner from Lady W on April 28, 2008:

….”My husband and I have already commenced looking for an alternative property with similar facilities in the Westminster area. As I am currently chairing the Local Transport Bill Public Bill Committee and Nicholas is the lead Chairman on the Finance Bill Public Bill Committee and, in addition, we shall be attending the inauguration of the new Taiwanese President in Taipei in May, I am sure you can appreciate the limits on our time….” Read more