Shared ownership or, called by another name “Social Homebuy”, is an idea that is becoming more and more popular, and many see it as a way for first-time homebuyers to get on to the property ladder without really trying.

The truth is that house prices are reaching a point where the value of property is beginning to level off and in some cases decline. The reality of the Social Homebuy scheme is that, while many may well believe that it will make homes more affordable, it will in fact be a platform from which house and land prices can escalate to an unbelievable new high. It has all the hallmarks of the Mississippi scheme of the early 18th century.

It all started with a Scottish man by the name of John Law. He created what was known then as the Land Bank where people traded in land and property rather than money. It was a scheme that developed its own life and finally spun out of control, leaving a trail of devastation and poverty in its wake and Law in prison.

Those who have no doubts about the credibility of Homebuy might do well to undertake some research into the Mississippi scheme and maybe think again before broadcasting its supposed virtues. Be wary that, like the Mississippi scheme, Homebuy will eventually leave regulatory control and bring about the same misery and poverty.

Of the Mississippi scheme, Defoe wrote:Some in clandestine companies combine:

Erect new stocks to trade behind the line;

With air in empty names beguile the town,

And raise new credits first, then cry them down;

Divide the empty nothing into shares

And set the crowd together by ears.

Walter Parsons, Royston, Hertfordshire

Source

Housing Today