homedaq

If you haven't see the video already, I'd appreciate as many views as possible. I'm trying to get the views on this video higher than those for the official tory one, as perhaps then the press just might write about and bring up the real cause of debt. http://www.youtube.com/watch?v=doZVx9zy110

If you want the well-researched full story on the disproportinately high number of Old Etonians in Cameron's inner circle then check out this article in the Times http://www.timesonline.co.uk/article/0,,20...94030_1,00.html

You're not wrong however, just because something is unpopular within some sections of the population does not mean it should not be addressed if the consequences of ignoring are much worse. It's about time people started saying what they know needs to be done and seek to win people around to their view, rather than just floating on the wind of popular opinion. All I'm trying to achieve with this video is to highlight that credit card debt is a tiny fraction of total debt and it is in large part caused by high house prices, high taxes, and other charges.

http://www.youtube.com/watch?v=doZVx9zy110 I just wanted to point out that Cameron is completely ignoring runaway house prices, the real cause of debt.

These type of competitions are perfectly legal. The element of skill may be extremely low but it is still enough for people to get it wrong so it legal. Contrast that with the Live8 which as far as I am aware, was illegal as it had no question at all as was for all intents and purposes, a lottery. However, with all that said, as discussed before here, house price competitions are a very good signal of a housing market completely up sh1t creek, just as it was in the 90's. Being the intellectual that I am, I also spotted another house competition in my favourite trade journal Nuts, this week. The prize was a 315k house but I was hoping for Katie Downes.

There was a rumour that Blair would propose it as his parting shot to both out-manoeuvre the Tories and leave Brown defending a good idea that he has no interest in implementing. Now that would cause a few ripples.

The Flat Tax has worked well in Hong Kong for over 50 years. The tax returns there are a simple one page 10-15 line affair. It saves billions in admin and accounting costs. With the flat tax there is no longer any 'tax favours' for party donors, no tax avoidance through dividends (corporation and personal tax set at same rate), no non-domiciled resident super-rich loophole, that Labour has kept open for their friends (think a certain steel billionaire etc). Flat Tax should be loaded in the tax free amount to instantly benefit the poor and low earners. The middle to high earners actually should pay more at first to cover any drop in income, but they claw it back with the drop of all the other taxes like on savings, inheritance etc. That means no more stamp duty as well. So, when implemented properly it is the poor not the rich who benefit first, then after time, every one should gain with clawing back from the removal of stealth taxes, and admin savings, and even productivity gains. Also, although perhaps not intuitive, it is still progressive, ie those who earn more don't just pay more in £ terms but also in % take terms. This is thanks to the initial tax free amount which means that everyone pay less than the tax rate as a % of their overall salary, but this amount increases towards the tax rate the more you earn. I have some example in my flat tax flat tax blog on the progcon.org site That said, the Tories are not actually proposing introducing the flat tax, but using it to spark debate on the benefit of flatter, simpler taxes, which imho, is a shame. With a flat tax rate, we would be able to know exactly how much tax the government takes from us overall which is almost impossible at the moment. This clearly works in the favour of the Government. Flat Tax completely removes a government's ability to meddle and really shows up how much tax we are saving or spending. It is not a system for reducing tax, it is a system of clarity to simplify the tax collection process, make avoidance more difficult and empower us to compare different government's tax demands on us properly. There is just the tax-free amount and the tax rate. Each party's plans would be simple to cost and compare.

Forget house prices, it is that time of year to get the oil tank filled up for winter. Brings tears to a glass eye.

With ultimate respect to Southend as someone who grew up there, all these new dacha owners should be warned that thay are not jellyfish being washed up on the stoney beaches but used condoms. Perhaps the journalist has a beach hut to sell on Thorpe Bay beach just along the way.

http://www.contractormoney.com/mortgagecalculator.html I used this calculator which gave a monthly payment of 982.20, making the total repayable £ 176,796 (982.20 *180 months) A slight tangent, but I am too much of a pedant to let it go! ;-) I guess I am being very naive here, but obviously the higher rate is to compensate for increased risk, but the increased payments themselves increase the chance of default. Why not offer the same rate, but require borrowers to take out an insurance premium with decreasing premiums, loaded up front and reducing as risk and outstanding reduces?

Google has an "ethical" policy that prohibits gambling advertising for example. Surely this kind of ad is far from ethical? I know some will say that if someone is desperate enough, but surely IVA is the way forward for those in that situation? (no connection with an IVA company etc)

Welcome Finance This is a top of the page Google advertiser. It is interesting to see the sharks circling the Brits that are up to their eyes in debt. I think this is a good, if indirect measure of the state of the financial health of the country but should such usury* be illegal? I guess they must just throw money at people, but surely an IVA is better than borrowing at these rates? [Edit: *Imho of course, any trawling legal eagles.]

Yes, we bought in 1991 which was being talked up as the bottom of the crash at the time but watched our flat lose 25%of its value over the next 3 years. By 1995, the sentiment was so negative that we thought we would never see our purchase price again, so switched from endowment to repayment to get the loan size down to enable us to sell. Every single uptick will be seized by the press as a sign of the recovery. It would be naive to expect anything else.

So more like circumlocution, circumlocution, circumlocution

stamp duty was suspended for a while I recall - maybe in 91-92?

But wouldn't that just lead to the banks offering new cashback/125% etc type of scheme to cover the higher up front costs, and therefore just result in the buyer ending up deeper in debt? Edit: This is pretty much what happens in Holland with its much higher (about 10% of loan) up front fees. They just slap in on the mortgage making FTB's even more a risk to equity falls as they start off in neg eq. If the banks can land a customer with a lifelong debt, they will, particularly as a borrower with security is infinitely preferred to a tenant in their eyes. Surely the rise in BTL is more directly to blame for the frothy increases than the poor FTB's? I agree with your last point though if not the method, with the aim to cultivate renting. With retirement ages likely to increase, perhaps people will just rent for a lot longer, buy in their late 30's or early forties with a whacking deposit and therefore no need to take on too much debt. The banks wouldn't like it though!

It is certainly interesting that it would appear from a lot of the responses here and perhaps even including myself, that if renting rights for *good* tenants are strengthened, the renting culture could really flourish here. That would negate any need to intervene in house price growth and give people a real choice and seperate 'home' from 'investment'

I guess the mechanics of this could easily be done in reverse - i.e. all purchases are assumed to be commerical unless a 'residential use form' is signed on purchase. Obviously anyone with more than one of these in use at any one time is telling fibs and open to fraud charges.

My last landlord was a farmer with an old farmhouse to rent out - large estate but little money - a month before leaving I invited her and the agent round to the house to inspect and asked for a definitive written list of all issues to be fixed etc before leaving. I completed the list, but they couldn't get a new tenant (I refused to pay their jacked up new rent) and guess what? Yes, despite a written agreement of all outstounding issues, it took months to get any of my deposit back. Which was coincidentally when they had found a new tenant (at the old rent of course). How do we stop the deposits being pinched? I went through a big agent (think Jimmy, big cigar, garish tracksuit) but they just did as their customer the landlord demanded as I was a departing, there was no loss to p1ssing me off. I hate govt intervention but do you think there needs to be some independent deposit holding type of thing?

That's a fair point too. Would you be more in favour of leaving house prices to fluctuate freely and promoting renting more to offer more stable long-term rents etc? Is the answer in properly establishing renting as a long-term alternative to owning and leaving prices to go their own way? I rent now, since returning to the UK in 2001 and am lucky as it is on a large private estate belonging to old money that have owned the land for hundreds of years that will never sell it or their other properties, but renting still makes me a bit nervous in terms of being kicked out before I am ready. Probably false assurance, but I can't help but feel that with owning, you at least know that as long as you keep up your payments, you can be (pretty) sure you will be able to stay there as long as you like. If this could be the same for renting then I would be happy to continue doing so (as it is a lot cheaper for the same sized house etc)

Because it ruins lives. The spread of the 50/50 purchases in the early nineties left many people in such deep debt they would not have been able to participate in the subsequent rises but faced many years of hardship just because they bought "at the wrong time". That is clearly not fair.

There will always be speculators, buying and selling for a profit, I don't think that is a bad thing in general, but I do agree with your point about shifting mindsets of the regular homeowner. However, how do you think you could do to achieve this? Limiting borrowing has been the best suggestion I have seen so far from other threads on HPC. This could be done in several ways from incentives to the less preferable iron fist with the banks.

Rightmove does have a search for land option. I also use plotsearch.co.uk and gladwish land sales (no connection with either other than as a customer) That said, land prices with planning permission seem more bananas than house prices. Renovation seems a cheap option to get a home with land, imho.

I am interested in the groups views of ways we could try to prevent future house price bubbles in the UK. Clearly we need to keep housing affordable to prevent people being crippled by debt from either borrowing too much or finding themselves stuck in a property due to negative equity. I bought my first flat in 1991, some time after the slide had started, just when Norman Lamont was telling us that "the green shoots of recovery" had arrived. That said, our flat soon lost 25% of its value and we would have been stuck there forever (size ok but abusive neighbour/freeholder next door) but for help from the family. Could it just be a case of limiting borrowing multiples to reduce the amount peple can pay on credit, forcing prices to come down to meet buyers limits or are there more effective measures? Would limiting borrowing multiples, if introduced now, produce a prolonged but soft landing from the highs of 2004? Just interested in your two penneth's worth.