Friday, Apr 13, 2007
NuLabour's head is in sand over house prices - will Conservatives do better?
WebCameron: NuLabour's head is in sand over house prices - will Conservatives do better?
Our big chance to pin the Tory leader down on what exactly his party will do where Labour fears to tread. Head over to this URL and put a vote in, and let's see if he has the guts to say something more than usual shared ownership/affordable homes red herrings.
Posted by pricedout.org.uk @ 02:06 PM (191 views) Add Comment
8 Comments
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1. Acetip said...
Conservatives can’t & will not help, they started all this with Thatcher & Lawson in the eighties. I put this crazy housing situation not on Labour but the Tories. As for Cameron I for 1 just don’t trust him.
2. paul said...
Can't ... bring myself ... registering ... Tory stooge website ...
It's no good, someone's going to have to vote twice for me.
3. denzil said...
Paul,
done!
Whatever happens the next government will not want to create a HPC. What I was wondering is it possible and if so how would it be possible to orchestrate housing that is a more traditional and sensible multiple of salary whilst avoiding a crash over the term of a government.
4. royston said...
Denzil,
The short answer is: inflate the crap out of the economy, while constraining house price growth so that it can't inflate even faster. However, inflation has always proved to be a very difficult genie to get back into the bottle once it gets out. Do we really want to go down that route? In my view, a sharp HPC would be preferable politically - they just want it to look like the market did it to itself rather than being blamed for it.
5. denzil said...
royston said:
>>The short answer is: inflate the crap out of the economy, while constraining house price growth
I don't see that working for two reasons:
1: Economically it will make us even less competitive than we currently are unless everyone else inflates accordingly.
2: How do you constrain house prices whilst inflating the economy?
6. sovietuk said...
Whichever party is running the show, they will want to maintain overvaluation in the housing market because it is the whole illusion that that the UK economy is now based upon. High levels of equity make people feel wealthy and therefore more likely to spend. The MPC will try to maintain the illusion and will get away with what they can on inflation(running close to the wire even with the fiddled figures) for as long as it takes. It is not inconceivable to think of the 3.1% letter being delivered to Conman Brown in preference to a HPC. Only hope is for factors beyond the government's (and MPC stooges) control to tip the situation (e.g lack of credibility in running monetary policy which will cause devaluation in sterling and hence forced higher interest rates)
7. royston said...
Denzil,
Totally agree with you on point 1 - that's why I said I didn't think the inflationary option was attractive politically.
On point 2 - the only way to do it in this scenario, IMHO, is to dampen demand - e.g. ration credit (i.e. tighten lending standards - smaller multiple of income, bigger deposit, etc.), dampen the desire of BTLers to be in the BTL business (i.e. tie them us in red tape, tax them), tax developers more, increase stamp duty.
- I am not advocating doing all of these. I am just outlining what could be done.
8. dohousescrashinthewoods said...
@Sovietuk, to put it another way,
The.. emperor.. has.. no.. clothes.. on!
;)