Friday, Feb 12, 2010
Britain’s biggest rip-offs
CityWire: The Friday Five: Britain’s biggest rip-offs
Not suprising, housing is on the list. Mr Bonsignore is knocking out some real truthful belters lately. Cracking
stuff Tony, keep up the good work.
"Yep, back to this one, I’m afraid. But seriously, whoever thought it was a good idea for houses to costs five, six, seven times or even eight times income? Apart from bankers, estate agents and mortgage brokers of course, and older people who forgot to save for a pension?
The key to sustaining the housing rip-off, of course, has been the promise that you too can get rich quick, because house prices always go up in the long run, and that interest rates will always stay low.
If both of these assertions were true then house prices at their current price levels might indeed be good value.
But they aren’t, and they’re not. "
17 Comments
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1. dill said...
The message that MUST go out to the British Public - The opportunity of notional wealth via property has passed. The risk of medium/long term loss is now far greater than any fading possibility of short term reward. Caveat emptor.
2. freemanphil said...
The only rip off is big government. With bailouts they prop up corporate monopolies that can price fix, and, by printing money and manipulating interest rates they cause inflation. Please don't get into the trap of blaming private enterprise, because they simply couldn't provide bad service for high prices without government intervention.
For those who think each is as bad as each other, remember that we have a choice, get rid of private enterprise and have communism, or, get rid of big government and have a free and prosperous society.
For those who say that we need regulation, the only thing that needs regulating are practices like the collaterlization of debt, that were once considered fraud. We need to ban fraud, not regulate it. Common law and grand juries would deal with that if government regulators got out of the way and let the litigation flow, because there is a backlog now as long as the eye can see.
3. Freemanphil said...
Oh, there is the third choice, public/private partnership, which is private ownership and public control. This is where government regulate fraud to make it not so bad, to ensure stability of the system and operate stable cartels. This is just as bad.
4. mr g said...
"and older people who forgot to save for a pension"
Another example of the ageism that pervades this site.
I'm older then 60 and none of my friends and acquaintances of a similar age have forgotton to save for a pension, it's probably the 45 to 55 year olds who are in this position as they're the age group who have piled into property big style, in the last 10 years or so and coined the phrase "my house is my pension"
Before I get a tirade of s*it about how lucky my generation are, let me say that I left school at 15, started work in manufacturing on the shop floor at £6 a week, eventually reaching the post of General Manager through hard work and changing employers.
This and foregoing foreign holidays and p*ssing my hard earned money against the wall enabled me to pay off my mortgage and retire at 60, (I'm not boasting I'm simply expressing a fact, I couldn't give a tinker's f*rt about the value of my home or any other property for that matter.
We're not all half wits who spent everything and forgot to save for a pension!
5. holding out said...
Calm down granddad!
6. inbreda said...
ha ha - an old person saying "piled in big style"
Respect
7. mark wadsworth said...
Mr G, nobody said that ALL older people "forgot" to save for a pension.
Some "forgot", some just didn't have any spare money; some entrusted their savings to the likes of Equitable Life or were invested in bank shares and lost it all; some decided that whatever meagre amount they could save up would make them no better off because the Pensions Credit is means-tested and because insurance company charges are sinfully high on small funds; some retired ten years ago when stock market was at a peak and annuity rates still high; others "remembered" to save for another five or ten years and despite having paid a lot more in will be getting LESS than if they had retired five or ten years earlier, and so on. Older people have been messed about by The Powers That Be just as much as everybody else.
... but oldies are far more likely to be NIMBYs, so if they end up losing out from Home-Owner-Ism, which has led to ridiculously low interest and annuity rates, then maybe they ought to stop whining and start reconsidering whether Home-Owner-Ism is such a good system after all.
8. enuii said...
Nicely put Mark, spot on.
9. Crunchy said...
Think about it.
Do banks make more money lending £40,000 or £150,000 Simples. It's not complicated folks!
10. tenant super said...
As MW says, there exist certain trends within the boomer generation such as NIMBYism which has contributed to the fact that gen Y and the younger end of gen X cannot afford to buy a family home. Of course not all boomers did not save for retirement and neither are they to blame entirely for HPI.
The point is that they have contributed to some extent and these murmers are gathering pace in the media. If this continues, the 'ageism' you lament will gather pace out there in the real world. Oldies will become the focus of discontent in the same way that immigrants currently are (limiting certain services for immigrants and trying to reduce their number is therefore a vote winner). If the ageism and discontent grows and the younger electoral demographic starts to outnumber over 60s, then anti-pensioner policies such as removing free travel/ prescriptions/ winter fuel payments, cutting state pension and forcing the sale of assets will also become a vote winner. I think that's what Willetts means when he talks about the breakdown in the intergenerational contract. I always said of my grandfather who had no savings that he was injured at Dunkirk for my freedom and wasn't able to save even if he had wanted to, but the same cannot be said of my parents generation. Younger people no longer feel they have any societal filial duty to retired people.
11. tenyearstogetmymoneyback said...
I think the comment was aimed at the 40 and 50 year olds who forgot to save for a pension because
they were too busy dabbling in property to go out and do a proper job. I certainly know one myself.
12. freemanphil said...
NIMBYism is a valid point of view. Fractional reserve banking has stolen and concentrated the wealth of the middle classes, and the corporations want to plonk tower blocks next to residential areas made nice by generations of wealth generating families. Because the corporations have stolen so much money, they can build taller and bigger and turn their back on communities. NIMBYism is a reaction against theft from bankers, funneled into corporate developers. If we didn't have fractional reserve banking we wouldn't need a planning system. I wrote an article about this:
http://www.campaignforliberty.com/blog.php?view=27171
13. dill said...
Nimbyism is theft from everyone else - pure conceit. No one owns anything in truth. If one set take ownership under one ruling system - they will lose it under another. Hence the resistance. Unfortunately for them, the force that will take it from them will be far more aggressive than they are. Unless, of course, they are prepared to share without conflict. That's rare. So be it.
14. tenant super said...
It's not so much NIMBYs as NOTEs (Not Over There Either) that get my heckles up. There is a valid case against erecting huge developments and swallowing pretty villages. But there is no cogent case against building on some of the the vast swathes of greenbelt which, if you fly from London to the coast, you will notice is a vast expanse of dreary and flat fields and not of any scientific interest or particular beauty.
15. freemanphil said...
Dill, you freaking idiot. Tell me that you don't own your own body and mind. Oh, you don't own your clothes? Let me take them from you because I need extra clothes and you can walk naked today, now go back to your, I mean, nobody's home.
Under Libertarian ideals, ownership comes from homesteading. The first person to transform one thing into something else owns it and can transfer it to others via gift or sale. Under common law, if you abandon something, e.g. a house, and somebody else squats it for a given length of time, they become the homesteader.
Of course, if nobody owns anything, theft would be just. Indeed, murder and rape would be legitimate since you do not own your own body. Total new age nonsense.
16. freemanphil said...
Also, fractional reserve banking concentrates capital in CAPITAL CITIES, which expand at the expense of provincial towns that once had thriving economies. These capital cities then suck people in from both the countryside and abroad at unsustainable levels, leading to wholesale destruction of the region around the CAPITAL city, where CAPITAL has been concentrated/stolen by the banking system.
You wouldn't need greenbelt designation if the fraudulent fractional reserve banking system was banned, because capital would disperse amongst the populace instead of in few hand and in the capital city.
17. tenant super said...
Freemanphil. I agree with what you say about the banking system. However, surely the baking system is the same in Germany which does not have a housing crisis where young people can't start a family because they can't afford a family home?