FallingAwake

Surely it's down to simple POWER. A CEO has the POWER to raise his salary substantially. Someone on minimum wage, competing with potentially thousands of others of his fellow citizens, and immigrants... doesn't.

Do the English, Irish and Welsh get a vote on whether they want to stay in a union with Scotland?

So "free market" that we have a central committee to determine the price of credit.

Precisely. There's the "right thing to do", and then there's "the right thing to do to win an election". Unfortunately, the two don't overlap very often.

Ha... sometimes I forget that we have this great research tool called "Google" Sticking in "how does help to buy work", I found a couple of useful links... https://www.gov.uk/affordable-home-ownership-schemes/help-to-buy-equity-loans http://www.bbc.co.uk/news/business-24447335 According to the gov.uk site... So on their £130k property, they could get an equity loan of up to £26k. Here is what happens, assuming they don't sell up... In other words, assuming they took out the maximum equity loan (£26k), they'll be paying a £455 fee in year 6, and then the fee keeps increasing each year... and they STILL have to pay back that £26k "loan" when they sell. To be honest, the loan part of it seems quite good, but ultimately it's just enabling people to LEVERAGE their incomes to pay more for property, which is inevitably going to push prices up. (The sudden increase in prices since the scheme kicked in, seems to bear this out.) Ironically, that property prices have already gone up 8% this year, means that the same people who are supposed to "benefit" from HTB, are probably going to end up paying 20% more over the next few years! Obviously then, HTB is really just an attempt to convince the public that the economy is "on the mend", and therefore to vote the same lot back in. If the government really wanted to "help to buy", they'd simply encourage prices to fall to more affordable levels, or encourage the building of more genuinely affordable homes.

Am I right in saying that Help To Buy, in this instance, is basically a £20k interest-free loan for 5 years? In which case, what happens with this loan when the 5 years are up? Are they expected to cough up the £20k? Does it become a normal interest-bearing loan, which they have to pay in addition to their mortage? Does it just get absorbed into the mortgage? I presume it means the government end up taking a 15% stake in their property... so now they have yet another interest in preventing property prices from falling.

40 years at the mercy of the Bank of England's base rate? Ermm... no thanks.

Here's a better way of thinking about it. Due to "planning laws", the "green belt" etc, the system essentially herds 95% of the population into 5% of the space, usually the CITIES and TOWNS. The "pricing mechanism" of property and land, forces a lot of people to gravitate towards CITIES and TOWNS, where a roof over one's head is generally cheaper (i.e. house shares, bedsits, flats, and more property in general). When new immigrants come, they inevitably gravitate towards those same CITIES and TOWNS, because that's where they are most likely able to afford. Hence, a large number of British people are not only herded into 5% of the space, but they then find themselves also competing with an ever-increasing number of immigrants for scarce resources like "a roof over one's head", or a seat on a train. So the real issue is RESOURCES. The British people are being forced to compete with immigrants for resources that are made artificially scarce by the current system. And, while a lot of people probably haven't thought it through to this extent, THIS is probably the underlying reason for "anti immigration feeling". It's not so much the immigrants, as THE SYSTEM that forces British people to compete with immigrants for ever more "scarce" resources.

But most of the British isles IS owned by someone, just like your property is, and hence is "private property". Besides, that you "own" your property is a legal construction just as a nation occupying a piece of land is a legal construction. You can't automatically claim that YOUR private property is sacrosanct if you then undermine the rights of other legal entities such as a nation state, which essentially enforces your property rights in the first place. Sheesh, sorry to sound all Injin-like

Can I come and live in your house for free then? Super!

Soon it will be cheaper to buy a castle. Already is in NYC, apparently... http://www.zerohedge.com/news/2014-01-07/6-castles-cost-less-apartment-nyc Maybe we should all chip in for the HPC... House Price Castle It could be like the Playboy Mansion, but the hot Bunnies would complain about house prices to us.

30 year fixed rate? Luxury.

Woohoo... ONE HUNDRED POUNDS! I know where my vote is going.

Not that I have anything against the lady [insert (in)appropriate innuendo here], but of the supposed HUNDREDS of people who have already [been] taken advantage of [by] this "Help To Buy" scheme, is an Estate Agent with a vested interest in selling property REALLY the best they could come up with? Or maybe she was just the most photogenic, and naturally enthusiastic about the scheme, thinking of all that extra commission she's earning from it

Good article. But it just goes to show how complicated the act of buying a home has become. You now need to understand the flow of global capital. I can just imagine the conversation guys are having with their partners about that very thing.

To me, the real shocker of the whole thing is... £145,000... for a TWO-BEDROOM FLAT! That's the real scandal I wonder what the service charge is, each month...?

I think it shows one of two things (or maybe both): (1) Politicians really don't live in the same "world" as the ordinary person, (2) Suggesting that house prices need to fall is a political taboo, since so many people are brainwashed into thinking HPI -> Good. Let's face it, even if most people agree in principle that lower house prices would be good for the country, their own personal interests ultimately trump any "national interest".

Lol... they could pick up 6 of those in Birmingham for £750k. Ah, but London is so special

Thing is, this just shows how much of a Ponzi scheme it all is, really. The guy who "made" £150k has probably loaded up the proverbial "greater fool" with £150k of additional debt. That person will hope to do the same to someone else... until the point where the debt load becomes too great to bear. Even if you're earning £50k in London, at some point it's going to reach the point where you'll be stretching your finances to breaking point just to get a foot on the so-called "ladder" (if it hasn't already reached that point). If the first rung of the ladder you're about to climb looks decidedly fragile and held together with sticking plasters and some dodgy pieces of string, would you feel comfortable setting foot on it? That's the London housing market, that is.

True ... but it's just a shame that people who want to set up a home and family have to time it almost as accurately as an investment in the stock market. "Love, we can't buy now... we're at the peak of a 7-year trading cycle..."

Wow, I wonder how much of that 2000-2008 spike was MEWing. Just think, your CHILDREN get to pay for it all in terms of much higher house prices, and a much higher national debt... all so hard-working Joe and his wife Jane can avoid "negative equity" because they had a few two many holidays by leveraging their property in the 2000's.

Most people don't buy houses for profit, they buy them because they want a HOME for themselves and their families. Only estate agents and BTL-ers talk about "profiting" from house prices. Does it make a person *stupid* simply for wanting a HOME without having to be massively leveraged (now 7+ times income in London) and in masses of debt to the bank for 30 years? Besides, you're right that FLS, QE, cheap money, 300+ year historically low interest rates, mortgage forebearance and a lack of housebuilding would lead to increased prices. But most on this forum don't want to "invest" in houses. They simply want a HOME... at a reasonable price that *isn't* inflated by all kinds of govermment and credit shennanigans. And all the things you listed are actually good reasons why buying a HOME right now is so dangerous. The fact that current prices are supported by your list of "FLS, QE, cheap money, 300+ year historically low interest rates, mortgage forebearance and a lack of housebuilding"... ...makes me wonder just what will happen when a few of those props are pulled (or forced) away. - FLS is already being wound down for lending on houses. - QE is starting to be wound down in the USA. - money is still cheap (at least for mortgage lending) but we'll see what happens as the QE money gets withdrawn. - 300+ year low interest rates... mmm... I wonder which way they'll go in the future? - mortgage forebearance, the banks have now had 6 years to get their houses in order... so don't expect this to continue indefinitely - lack of housebuilding, for now... but with an election just over a year away, the promise of "affordable homes" is a vote winner. If you want a pat on the back for being a "clever" BTL-er, you won't find it here

Help (For Estate Agents) To Buy.

Interesting graph, but considering that the US has been running TRILLION+ DOLLAR deficits for the last several years, as well as printing HUNDREDS OF BILLIONS of dollars of fresh money ("QE"), maybe that has masked some of the damage, and passed the problem onto the next generation? And these % figures also seem to assume the quality of a typical job in 2009 was the same as one in 1959... or even 1890.

To be fair, it's better than nothing... at least his comments are going to make people realize either that (a) the higher house prices go, the more risk that it will be stopped in some way by the Bank of England [lol] ( the Government is stoking this mini-boom in order to win an election. Of course, from a HPC perspective, we know Vince's comments are a bit misleading - as others have pointed out, saying there is a RISK of a bubble completely disguises the fact that we still haven't finished the previous bubble. After a TRIPLING of house prices in a decade, a 20% fall in prices does not represent the end of the bubble... merely a pause to take in more air