Friday, Apr 18, 2008
Scathing and insightful
Times: Scandal of luring first-time buyers
Gordon Brown is acting immorally by asking for rate cuts that could lead to negative equity.
Property prices are nonsensical, exorbitant, unaffordable, immorally inflated by investors and a shortage of available land and exploited by a greedy City.
All those buying a property have known this for the past five years at least.
Nothing could be more immoral, then, in the current climate, than using government efforts and taxpayers' money to encourage first-time buyers to enter the market, in order to stabilise the dodgy situation that banks and incautious borrowers have got themselves into.
How dare a man who has lectured us all ad nauseam about prudence, year after year after year, now use our money to bail out the profligate?
Posted by little professor @ 12:16 AM (617 views) Add Comment
14 Comments
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1. quiet guy said...
Fantastic posting Little Professor.
"row, row harder, keep us all afloat!"
Sorry all you property gamblers, I'm an HPCer. I'd rather sit on the river bank and watch you sink :)
"The IMF says property prices are 27 per cent too high. Why would anyone with the interests of a first-time buyer at heart encourage him, or anybody else for that matter, to purchase at the top end of the market, with a long-overdue correction imminent?"
Because Gordo will do anything to get elected again.
2. wiltshire said...
Dead Man Walking.
3. Fgsdgdfs said...
Viscious.
But exactly what needs to be said.
4. Bertie Bunfest said...
Very good article
5. bystander said...
"For most of us, a sharp correction will come as a blessed relief. House prices might make some sort of sense again; investors from the City and overseas will leave us alone and stop buying up the places we need to live in. A decent house in the country might become affordable once more for a local person, not just for someone from far away, paying cash."
...unfortunately, with the pound on the way down against most of the basket of 16 most traded currencies, I see any correction, sharp or otherwise, as a red rag to a bull to overseas investors and specultaors. The British obsession with property, built over generations (gran used to say: "safe as houses", "Bricks and mortar" etc.) will not dissappear as easily as easy credit has. This correction will help many, but the devaluing of the pound, will make the scarce disposable income of the FTB's and the downsizers, upsizers, through massive inflation, imported, leaving even less for the house of your dreams. Th foreign investor, especially those from the eurozone, will be much better placed to snap up these corrected properties, knowing full well that the 'British Obsession' will re-ignite the market in a few years time. IWANT HPC, but I am also a realist and with sterling weak, house prices coming down the overseas investors will begin to circle the carcass like vultures, ready to still outbid the already penalised FTB. A limit needs to be put on the number of properties a person (family), foreign or homegrown can own.
6. Duncan said...
You might have read a post from me about this before.
In 1989 the biggest concern amongst Young Engineers at Plessey was that they couldn't afford houses or flats.
The company was concerned and got a concession so that they could take out 4.5 times salary mortgages with
a major building society.
By 1994 the ones who hadn't bought could easily afford three bedroom houses on a sensible income multiplier.
Moral: The best things come to those who wait.
:- Duncan
Question for Bystander. Would you invest in Zimbawee? I bet property there is an absolute bargain.
On a more local note I remember a brilliant quote (on a TV program about property prices) from a Frenchman on the price of some run down French cottage a Brit had snapped up.
"Thats ridiculous. You could buy a decent car for that much".
A question for everyone else, what do you think the next bubble will be, having had Tech Stocks followed by Housing ?
Based on recent news I have a horrible feeling it will be food. Buying a house will be easy but unless it has a large vegetable plot
feeding your family will be a struggle.
7. str 2007 said...
I know it's good for exporters, but they were doing ok anyway, the interest rates have gone the wrong way.
I agree a sharp correction would be better for everyone.
And re-iterate that it is beyond belief that Gordon Brown could be encouraging first time buyers onboard the housing submarine.
The man is pure evil - he even makes it sound sincere.
8. In The Brown Stuff. said...
I have read many comments on articles like this one, and am amazed how nearly always there is a lack of support for the government, does this mean that on the 1st May Labour will not receive a single vote, of course they will. Unfortunately voting for Labour is what the non thinking, miss informed do. They have done for years.
9. This comment has been removed as it was found to be in breach of our Blog Policies.
10. Loneranger said...
LIMIT PROPERTY OWNERSHIP TO A MAXIMUM OF THREE!!
If this law was passed after the last crash we wouldn't be in this mess and our children would have been able to buy a 'home' and raise a family. Hasn't this been the basis of any normal western society over the last two hundred years?
Politicians know this but choose to ignore, why? One simple word, CORRUPTION!
11. techieman said...
look at the comments - Herbert by name Herbert by nature. Anyway - this article headline is obviously reactive rather than proactive. Still trend is your and journos friend i suppose.
12. letthemfall said...
A pleasant change to read an article like this in the Times.
bystander: It's true that this country's perverse attitude towards housing won't disappear, but it will be ameliorated over the coming price declines. People who believed prices will never fall will start to believe they will never rise. Eventually, as last time, prices will begin to rise again; how quickly will depend on how credit is controlled. Whether Europeans will start buying here to take advantage of exchange rates I'm not so sure, given that they have a more balanced attitude to house ownership. I agree about controlling multiple ownership - some hefty taxes would be a good starting point. If we are really such an overcrowded country, houses standing empty for much of the year is unacceptable.
13. str 2007 said...
@ Loneranger
LIMIT PROPERTY OWNERSHIP TO A MAXIMUM OF THREE!!
Is that 3 for husband, 3 for wife and 3 each for the 3 kids ?
Because that's what will happen.
I'm sorry but the only way I see property investment working to the benefit of the local community is for the local 'Parish/Town' to have a Property Fund that local people can buy a share in. This fund can then be in charge of building and renting local commercial and residential property for rental purposes, maybe even car parks and sports centres etc.
I personally feel that rental property should only be encouraged for short term needs (contract working or between houses etc).
I personally feel that all people should be encouraged to purchase their own property - it gives a stronger sense of belonging to the community - this is a good thing.
Property (other than improving/extending the family home) should not be open to speculation.
14. Duncan said...
str 2007 thats a very good idea.
I am very disappointed by the way REITS have turned out. When I first read about them I thought they would be something like that, although maybe
owned by a private company which people could invest in. I thought about buy to let for about five minutes but despite having enough for a huge (over 50%)
deposit though there was too much risk.
An alternative which would probably work would be to ban buy to let mortgages. If someone has saved £1000000 I haven't any objection to them having four buy to lets.
However, it is completely immoral for them to be borrowing money from a building society which could have been lent out to first time buyers.
While I was at it I would charge stamp duty on all new mortgages, rather than just house purchases. That would encourage people to take the long term mortgages
the Government want to encourage.
:- Duncan