Thursday, May 24, 2007
Newsnight is requesting our views on the housing market for tonights show
Newsnight: Do we need a housing market crash?
In his 1997 budget speech Gordon Brown said, "I will not allow house
prices to get out of control". Ten years on and they have spiralled
leaving thousands of people unable get onto the first rung of the
property ladder.
So do we now need a crash in the housing market to level the playing
field once more? Are crazy house prices creating a new generation of
renters unable to buy? Send us your experiences - have you been priced
out of the market? Or have you done well out of the boom and long may it
continue?
Let us know below and we'll discuss the issues and put some of your
points to the government and a select panel on tonight's Newsnight.
Please post your comments and questions directly to their blog.
Posted by paulm @ 04:01 PM (453 views) Add Comment
15 Comments
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1. dohousescrashinthewoods said...
Job done:
"How can anyone afford a house without resorting to lies and spin?
If the average salary is about 20K and the average house is about 200K the true income multiple is 10x.
That is not serviceable."
2. Skint Academic said...
A house price crash is not just required to allow us to get on the housing ladder and provide security in our old age, it's also needed to secure the talent that will otherwise leave this country in droves to find a better life elsewhere.
Moving to Germany at the end of the year is currently my favourite option. So long, and thanks for all the fish.
3. harold said...
Do we need a HPC? A. maybe.
What they should be asking is: do we need house prices to return to their long-term average. A. yes.
4. Pr said...
I earn almost twice the national average at about £38,000 but can only afford an ex local authority single bedroom flat in a bad area or a studio in a good area in London, even with a 15% deposit. I would buy something, but do not want to buy at the peak and feel families and myself, on a decent income should be able to buy a house with more than one bedroom. The market cannot survive sustained inflation and interest rate rises. Buy to letters and recent purchasers without a decent buffer of equity will be forced out to makeway for the new generation of homeowners. The question in everybodies mind is, when will the market stall, how far will it fall and when will it stabalise and be time to buy?
I only wish that the Bank of England would look beyond the government's narrow CPI targets, designed to harmonise us with Europe, and deal with contemporary and local inflationary factors. BOE will need to revert back to the RPI or something similar to get inflation under control, implying significantly higher interest rates. This is spookily similar to when we withdrew from the European exchange rate mechanism just before the last crash and shows that lessons were not learned. Maybe the BOE will also need to be more independent, because use of the CPI is clearly a political rather than an economic policy. Members of the Monetary Committee should be selected by an independent committee and the BOE should have greater control over their targets and objectives, based around principles, such as financial stability, rather than narrowly defined targets that characterise the micro-management that often harms many of Labours well meaning interventions due to the law of unforeseen consequences.
5. Fart. Com said...
Housing market should be regulated i.e. everyone should have one house/flat to live in. Allowing some people to own several properties at the expense of families and young people is wrong. If you look at the rental market you will find cowboy landlords renting out unsafe properties for the sake of capital growth. People should be encouraged to seek alternative investments as the current sky high prices will result in a two class society of landlords and tenants.
6. Wage Slave said...
I'd like to ask
For owner occupiers :
How is it good for young families with children (and therefore society) if they have to over extend themselves to get a house (a home) to live in. With interest rates are in the lap of the global economy where's the security of knowing you'll be able to keep your home in the long term ?
And for the private renters :
How can young families feel secure when a private BTL landlord can kick them out with a months notice (for example if he wants to cash in on his properties' capital growth) ? Is it good for young kids to be chopping and changing schools ? What about the social problems that will ensue ?
And more generally :
Why are the new houses that do eventually go up so small ? Why is it that the housing stock built between and after the wars is so superior to the pokey holes that we get today ? Why are the standards that the houses were built to then not good enough for today's generation ? Does the government care ? It doesn't seem to.
7. royston said...
Before even seeing it, I predict a torrent of VI articles tomorrow accusing Newsnight of 'irresponsible broadcasting' in response to this programme.
8. Scott said...
Every bubble bursts. This is why they are called bubbles.
9. confused76 said...
I love this comment on the BBC blog, since it tells me the tide is really turning... people are really feeling the pinch and government will tighten the screw on the BTLers and regulate this river of 'oil money' pouring into London property... just allowing the usual arms dealing and money laundering but keeping it out of property
"I am currently 28 and hold a senior management position in a FTSE100 company, earning a little over £76,000 a year. I have a family with two very young children, and currently am priced out of buying a home in my area of the South East. It would take most of my takehome salary to cover the mortgage on a one bedroom house. I don't expect to have to cram a family of four into one bedroom. Hence I currently rent a house from a local social housing association. Does aynone else think the above scenario is pretty messed up?"
10. paul said...
Well, I've just been astonished to hear Yvette Cooper ramping the housing market on TV, talking lies about the the gap in supply and demand.
Yvette you dizzy bint, if demand outstrips supply so much THEN WHY ARE RENTS STATIC?
She completely ignored any suggestions of removing speculation from the system, and actaully got the last word in by talking the market up!
11. confused76 said...
The woman from pricedout.co.uk did ok... and so did the estate agent, as a matter of fact he was much more honest than the two politicians. There was not discussion re rising interest rates, and no serious debate on the role of cheap credit. My sense is that the situation is now totally out of control, with regulators powerless (and cleary without a clue), and politicians only focused on who to blame in the event of a crash. It is totally down to market forces, one thing for sure: it will get much nastier before it improves
12. sold 2 rent 1 said...
Do we need a housing market crash?
Do we really have any control to prevent one?
13. Orwell said...
No S2R no, i fear.... oh dear, oh... dear. Debt at 167% of GDP second highest in the world (some say the highest Oh dear Oh Dear It will all end in tears.
14. Orwell said...
Interesting take from the Newsnight blog:
If house prices crash then banks will ask for larger deposits (based upon how far they think prices will go down). Until things bottom out, anyone will less than a big deposit (say 30%) won't be able to get a mortgage. No first time buyers will mean positive feedback and a much deeper reduction in prices than many expect
I hadn't thought about that - it will make the crash all the more heavier!
15. Stan said...
Is anything being done to stop the people from owning several houses to let out at high rent or let them as holiday cottages usually in areas where there are no longer houses for local people to buy therefore they have to move from an area they were brought up in and would have prefered to have stayed.
Example- a young man working in the small town where his was born has to move out because others have bought up the houses to let as holliday cottages and he has to buy or rent some miles from the town and travel several miles back into the town to work. Every day he passes houses which are empty for several months of the year. If these houses were occupied by people working in the area we wouldn't need to build so many new houses.