I disagree entirely. House price inflation is caused by having too few
houses for too many people. Hitting property developers just prevents houses
being built or renovated and is a simple populist and utterly erroneous
course of action that will make things worse.
It's a bit like hundreds of years ago when speculators would stockpile food
before harvest and make a bomb if the harvest was bad (but usually made some
losses in most years). People tried to tax them to extinction too. The
result was that no-one risked stockpiling, so if the harvest really was bad,
then there was no food at all and everyone died.
Yes, but the main factor is availability of finance - prices would not go up if
buyers could not borrow so easily. Being able to borrow more funds at low
interest rates, as at present, allows people to make higher offers to get the
place they want. If the interest rate goes up, down will come the amount they
can borrow and down will come prices. This was the cause of the negative equity
problems in the early 90's.
But simply using interest rates to control house prices depends on all lenders
sticking to the rules about factoring salaries. Of course they don't, and
nobody polices them, with the result that house prices (and agents' commissions
along with them) are spiralling.
But that's a minority and you know it - most people who get into a bad
debt situation do so because they feel it necessary to live well beyond
their means. The prevalence of granite worktops is a symptom of this
disease which is currently afflicting our nation.
The potential problem would appear to be that they increased the
mortgage by £25K, spent the rest on a new car, and the £10K kitchen
may or may not make a difference to the value of the house when
Tony Bryer SDA UK 'Software to build on' http://www.sda.co.uk
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Very true - I didn't want to get into that whole "lets borrow on the
house to finance our lifestyle" thing, but it's very prevalent.
I'm constantly amazed by how friends who are in very similar financial
and employment circumstances to us can manage to buy things which we
would simply not consider to be within our means.
the mountain of debt that Wilson and Callaghan accumulated.
Now remind me what was Phoney telling us in April 1997; Ah I remember -
"we will end the practise where employers pay shit wages of £3/hr and
expect the taxpayer to make up the difference in benefits". And after
nearly 7 years of 'socialism' we have many more millionaire lawyers, and
*army* of people employed by the DTI, Jag+=2 and the NHS to do precisely
nothing. Meanwhile Chinese and Greek nationals are 'employing' their
fellow country folk to pick cabbages in Cornwall in return for 10p a day
and a tin of dog food (in the case of the Greek) and trip to seaside for
the Chinese - every day, rain or shine for about the same, and a free
funeral chucked in.
Christian McArdle wrote in message <40291a6f$0$10342>What about those who
just want to buy a tiny flat and have to pay 5 times
No, stupidity. History shows us that house prices are cyclic and it is
necessary to buy at the right point in the economic cycle. Now is not the
time to buy. I'd wait 2 years at the moment, for the economy to stabilise
before moving. IMO the chances of major capital losses are too great at the
moment with a Socialist Taxation Chancellor.
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