Tuesday, Aug 19, 2008
Repossession is a zero sum game
financial times: headline letter
So much for economic fundamentals....the Government is now proposing distorting the housing market for short term ends, rewarding speculators and the profligate to try and avoid politically disastrous scenes of price falls and repossession. The housing market is best served, however by being allowed to fall to a sustainable level. Whilst repossession may seem a tragedy - it is a zero sum game - for every family forced to relinquish a property they cannot afford, another has the chance of buying at a price they can.
Posted by peter harvey @ 02:11 AM (758 views) Add Comment
13 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. Stevie Dee said...
Working Link: http://www.ft.com/cms/s/0/ff5b82ae-6804-11dd-8d3b-0000779fd18c.html
2. matt_the_hat said...
"for every family forced to relinquish a property they cannot afford, another has the chance of buying at a price they can"
should be
for every landlord forced to relinquish a property they cannot afford, another family has the chance of buying at a price they can
3. renting2 said...
Or, one family's sheer misery at being repossessed is balanced out by another family's joy at snapping up a bargain. Some zero sum, which could have been avoided by proper oversight.
4. Confused76 said...
"No amount of market manipulation can increase the proportion of people who are comfortably housed; this can be done only by changing the number of houses or changing the number of people"
where are the supply and demand fundamentals now?
5. Matt_the_hat said...
@ renting2
surely all they had to do was make sure -> payments in - payments out >= 1p
why should anyone feel sorry for greedy people
6. voiceofreason said...
And in the USA, even better news as the family being repossessed leave the debt with the house...
7. uncle tom said...
The bottom line is that the property market is too big for the government to make any meaningful impact, whatever they do; but they could all too easily waste huge sums pursuing futile initiatives.
This government will now be fixated on trying to win the next election, or, failing that, avoid being utterly slaughtered at the polls in two years time.
The wiser heads in the Labour party will doubtless reason that their electoral prospects will be far better if the country is perceived to be emerging from recession on polling day, rather than drifting into an endless abyss.
They will argue that nothing should be done to defer the recession or slow the housing crash - bring it on at get over the worst before May 2010
- They may well prevail..
8. Eternal Sceptic said...
Does manipulation of a market this large actually work in any meaningful manner, or just create potholes on the road to perdition?
9. Luckyjim said...
matt_the_pratt
I don't think you can accuse everyone who overstretched themselves to buy a home as being greedy. And I'm sure they never planned to lose their jobs/ fall ill/lose a partner or whatever change in circumstances caused their situation. They should not be subsided by taxpayers but I would put their well being ahead of the shareholders of the banks who lent them the money.
BTL landlords are another matter altogether.
10. matt_the_hat said...
you don't sound so lucky Jim... I'm sorry for you if you fall into one of your catagories however...
If people budgeted correctly they should realize that a mortgage should be based on one income per household therefore mitigating the risk of one person losing their job, all the rest "lose their jobs/ fall ill/lose a partner" can be covered by insurance and some of it is mandated by mortgage companies so no excuse there if they choose the plasma instead.
Its people like you who have been giving it large about owning a home and look how much profit Iv'e "made" this week. Well you know what they say about stupid people and their money.
11. crash bandicoot said...
I'm with Matt here. These people didn't buy a home, they bought an investment - houses only go up in price, you'll easily sell it on and make a profit.
And they chose to finance their gamble with highly leveraged borrowed money - don't worry about it we have historically low interest rates, you can find another cheap 2-year fix once this one's up.
They would have been only too happy to accept the rewards if their plan had come to fruition. Instead they have to face the downside that they never even acknowelged existed.
12. matt_the_hat said...
Can someone answer me this -
In the good old days, town houses used to be for the working class (i.e. bottom 20 % of earning power) - now you need to earn 50k (i.e. top 10%) to buy these places. Also one wage used to pay a mortgage now you need 2 with your wife born into slavery as well with the kids looked after by someone who is deemed least valuable to our society (not my opinion just a fact - minimum wage). Where's the progress. Yes we have equal rights - both men and women are now slaves to their capitalist masters.
13. malct said...
matt - they don't create the interest when they create the debt
the interest payments are made from our common wealth!
it really is that simple
but many/most will argue otherwise