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We Must "support" The Housing Market


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Everywhere I go, people keep expressing their approval of the government's claimed "support" for the housing market. What they mean by "support" is attempting to prop up the price of the still over-priced housing stock. This mantra has now become so entrenched in the media and on the lips of the entire electorate that in my view it is even worse than the previous eight years of perpetual spin and ramping up of housing as a substitute for earning a living.

For the past week, no fewer than ten prime time broadcasts, including shamefully Newsnight, have wheeled on "expert" after expert, all of whom speak with one voice about this.

They are seriously deluded. But what is worrying is that not a single pundit or journalist ever questions this delusion. The notion that getting the housing market moving again by attempting to keep prices high is a ludicrous and painfully crass answer which breaks the fundamental rules of market economics.

Once houses become a depreciating asset, which they have been now for one and a half years, they become subject to the same rules as any other depreciating asset. Yet somehow, magically, housing is considered "different". This is nonsense.

Of course we all know that firstly you cannot support the unsupportable in this way, and secondly it gives out the very opposite signal to that required, which is to avoid ever again promoting housing as a quick fix personal equity investment for the average person. It is the substitution of house inflation for actually working for a living which has ruined this economy, and what does the government do? It promotes exactly the paradigm that led us into this mess.

Instead of hedging around this subject, which all the media and almost every single economics "expert"does , they all need a liberal dose of economic syrup of figs to purge themselves of the delusion. Part of the delusion is of course a studied one, and represents an avoidance of telling people how it really is for fear of being found out. Ministers and financiers are constantly trying to invent a security blanket around those in negative equity instead of getting them to face the truth.

The best way to "support" the housing market is to let it fall to sustainable and affordable levels. If a few hundred thousand people go through hell then that is tough, because if the delusion is extended much further it's going to be hell for a lot more than that. No-one EVER mentions that cheaper housing will support about ten times the number of people than would suffer from it.

This is a message that sorely needs to be made, but I fear the disproportionate sympathy for those who got themselves into a mess as a result usually of greed and opportunism will always outway what should be much more sympathy for those who never got on the "ladder" in the first place.

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Everywhere I go, people keep expressing their approval of the government's claimed "support" for the housing market. What they mean by "support" is attempting to prop up the price of the still over-priced housing stock. This mantra has now become so entrenched in the media and on the lips of the entire electorate that in my view it is even worse than the previous eight years of perpetual spin and ramping up of housing as a substitute for earning a living.

For the past week, no fewer than ten prime time broadcasts, including shamefully Newsnight, have wheeled on "expert" after expert, all of whom speak with one voice about this.

They are seriously deluded. But what is worrying is that not a single pundit or journalist ever questions this delusion. The notion that getting the housing market moving again by attempting to keep prices high is a ludicrous and painfully crass answer which breaks the fundamental rules of market economics.

Once houses become a depreciating asset, which they have been now for one and a half years, they become subject to the same rules as any other depreciating asset. Yet somehow, magically, housing is considered "different". This is nonsense.

Of course we all know that firstly you cannot support the unsupportable in this way, and secondly it gives out the very opposite signal to that required, which is to avoid ever again promoting housing as a quick fix personal equity investment for the average person. It is the substitution of house inflation for actually working for a living which has ruined this economy, and what does the government do? It promotes exactly the paradigm that led us into this mess.

Instead of hedging around this subject, which all the media and almost every single economics "expert"does , they all need a liberal dose of economic syrup of figs to purge themselves of the delusion. Part of the delusion is of course a studied one, and represents an avoidance of telling people how it really is for fear of being found out. Ministers and financiers are constantly trying to invent a security blanket around those in negative equity instead of getting them to face the truth.

The best way to "support" the housing market is to let it fall to sustainable and affordable levels. If a few hundred thousand people go through hell then that is tough, because if the delusion is extended much further it's going to be hell for a lot more than that. No-one EVER mentions that cheaper housing will support about ten times the number of people than would suffer from it.

This is a message that sorely needs to be made, but I fear the disproportionate sympathy for those who got themselves into a mess as a result usually of greed and opportunism will always outway what should be much more sympathy for those who never got on the "ladder" in the first place.

It is a pointless effort letting house prices fall again, as they would simply rise up again soon after. What makes much more sense is to keep them at the high levels today, and make those who are non productive in the new economy such as savers or low earners pay taxes to keep those that have taken a key stake in the UK housing market solvent.

Only by taking the hard decisions can Labour maintain their integrity as the only people capable of leading us out of a US created recession.

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The best way to "support" the housing market is to let it fall to sustainable and affordable levels. If a few hundred thousand people go through hell then that is tough, because if the delusion is extended much further it's going to be hell for a lot more than that. No-one EVER mentions that cheaper housing will support about ten times the number of people than would suffer from it.

This is a message that sorely needs to be made, but I fear the disproportionate sympathy for those who got themselves into a mess as a result usually of greed and opportunism will always outway what should be much more sympathy for those who never got on the "ladder" in the first place.

Another good post VP.

Make houses affordable, lets see the return of insentives to work.

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It is a pointless effort letting house prices fall again, as they would simply rise up again soon after. What makes much more sense is to keep them at the high levels today, and make those who are non productive in the new economy such as savers or low earners pay taxes to keep those that have taken a key stake in the UK housing market solvent.

Only by taking the hard decisions can Labour maintain their integrity as the only people capable of leading us out of a US created recession.

EEEEK!

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It is a pointless effort letting house prices fall again, as they would simply rise up again soon after. What makes much more sense is to keep them at the high levels today, and make those who are non productive in the new economy such as savers or low earners pay taxes to keep those that have taken a key stake in the UK housing market solvent.

Only by taking the hard decisions can Labour maintain their integrity as the only people capable of leading us out of a US created recession.

Um.....ok..... :blink:

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Another good post VP.

Make houses affordable, lets see the return of insentives to work.

Not easy to get 3m people inspired to return to work when their Government is telling them that its young immigrants that are needed to get the country back on its feet.

Houses are affordable today, just not to those who work for private industry. Mabye if we all worked for the Public Sector then they would in real terms become much more affordable as we would have a degree of security and a salary that is not mirrored in the private sector.

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It is a pointless effort letting house prices fall again, as they would simply rise up again soon after. What makes much more sense is to keep them at the high levels today, and make those who are non productive in the new economy such as savers or low earners pay taxes to keep those that have taken a key stake in the UK housing market solvent.

Only by taking the hard decisions can Labour maintain their integrity as the only people capable of leading us out of a US created recession.

How about letting prices revert to salary multiples then bringing in legislation to enshrine mortgage lending to a function of the average salaries and insisting that all buyers provide a minimum level of deposit.

Then the money that was formally wasted on servicing high lending can return to a more prodctive economy were familes and young people can 'get on the ladder' and provide adaquate housing for themselves and their children.

Oh, and some punative taxes on BTL income and some decent tennency laws to give the renters power.

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Everywhere I go, people keep expressing their approval of the government's claimed "support" for the housing market. What they mean by "support" is attempting to prop up the price of the still over-priced housing stock. This mantra has now become so entrenched in the media and on the lips of the entire electorate that in my view it is even worse than the previous eight years of perpetual spin and ramping up of housing as a substitute for earning a living.

For the past week, no fewer than ten prime time broadcasts, including shamefully Newsnight, have wheeled on "expert" after expert, all of whom speak with one voice about this.

They are seriously deluded. But what is worrying is that not a single pundit or journalist ever questions this delusion. The notion that getting the housing market moving again by attempting to keep prices high is a ludicrous and painfully crass answer which breaks the fundamental rules of market economics.

Once houses become a depreciating asset, which they have been now for one and a half years, they become subject to the same rules as any other depreciating asset. Yet somehow, magically, housing is considered "different". This is nonsense.

Of course we all know that firstly you cannot support the unsupportable in this way, and secondly it gives out the very opposite signal to that required, which is to avoid ever again promoting housing as a quick fix personal equity investment for the average person. It is the substitution of house inflation for actually working for a living which has ruined this economy, and what does the government do? It promotes exactly the paradigm that led us into this mess.

Instead of hedging around this subject, which all the media and almost every single economics "expert"does , they all need a liberal dose of economic syrup of figs to purge themselves of the delusion. Part of the delusion is of course a studied one, and represents an avoidance of telling people how it really is for fear of being found out. Ministers and financiers are constantly trying to invent a security blanket around those in negative equity instead of getting them to face the truth.

The best way to "support" the housing market is to let it fall to sustainable and affordable levels. If a few hundred thousand people go through hell then that is tough, because if the delusion is extended much further it's going to be hell for a lot more than that. No-one EVER mentions that cheaper housing will support about ten times the number of people than would suffer from it.

This is a message that sorely needs to be made, but I fear the disproportionate sympathy for those who got themselves into a mess as a result usually of greed and opportunism will always outway what should be much more sympathy for those who never got on the "ladder" in the first place.

Good post, and well set out. It seems so blindingly obvious yet nothing ever changes. Why? Why is it so important to maintain the unaffordable price of property? Could it be that those old enough to have gained significantly from the housing boom are those that are god knows how many times more likely to vote that those in their twenties or thirties? Could it really be down to something as basic as that? Can't see any other reason why this or any other governemnt wouldn't want to make owning a property more affordable for everyone.

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Everywhere I go, people keep expressing their approval of the government's claimed "support" for the housing market.

great post - its quite a ridiculous situation regarding HPI- any other purchase low prices are good - yet for houses - high prices are viewed as a good thing! i believe the sheeple have been brainwashed into this idea and dont stop to question it - if they did then surely they would see HPI as bad thing.

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How about letting prices revert to salary multiples then bringing in legislation to enshrine mortgage lending to a function of the average salaries and insisting that all buyers provide a minimum level of deposit.

Then the money that was formally wasted on servicing high lending can return to a more prodctive economy were familes and young people can 'get on the ladder' and provide adaquate housing for themselves and their children.

Oh, and some punative taxes on BTL income and some decent tennency laws to give the renters power.

House prices are compatable with middle management public sector pay, and that is the crux of the matter. Its ridiculous to think that anyone should be in a position to purchase a house, our economy simply cannot afford that luxury. The working classes are competing in a global world where many workers would consider a hearty meal and a pair of new shoes each year a success in their working lives.

Familes are far better serves looking to the state for support, and after a few generations we will return to the days whereby the working classses were happy to rent, and even happier to have a job.

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Good post, and well set out. It seems so blindingly obvious yet nothing ever changes. Why? Why is it so important to maintain the unaffordable price of property? Could it be that those old enough to have gained significantly from the housing boom are those that are god knows how many times more likely to vote that those in their twenties or thirties? Could it really be down to something as basic as that? Can't see any other reason why this or any other governemnt wouldn't want to make owning a property more affordable for everyone.

You need to think a bit deeper.

Have you not considered what you are suggesting ?

If house prices collapse, then so do the banks that have loaned money secured on them, and the taxpayer will have to bail them out.

Its important for this Government to keep the banks solvent, hence the reason house prices have to remain at their current levels. We have seen a collapse in the Banking sector and that was before we had the possibility of a house price crash, imagine if there was a crash on top !!!

Edited by laurejon
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I think you all have it the wrong way round. The reason the government wish to keep house prices high, is that houses form the "asset base" of banks and building societies, it's nothing at all to do with the public's view of it. If prices fall, how can the banks avoid making substantial losses on re-possession? I think this ties in with the other announcement about the government subsidising mortgages for two years - it's all an attempt to brainwash people into thinking high prices are a good idea, to avoid the *ankers "crystallising" their losses.

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The best way to "support" the housing market is to let it fall .....

But what are odds on any politician of any party saying this clearly and bluntly? Some know it but keep quiet. A few say it in code. Some say its going to happen and its "that lot over there's fault" - but none say it with no ambiguity to hide behind. You'll not catch a politician saying its a good thing.

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Everywhere I go, people keep expressing their approval of the government's claimed "support" for the housing market. What they mean by "support" is attempting to prop up the price of the still over-priced housing stock. This mantra has now become so entrenched in the media and on the lips of the entire electorate that in my view it is even worse than the previous eight years of perpetual spin and ramping up of housing as a substitute for earning a living.

For the past week, no fewer than ten prime time broadcasts, including shamefully Newsnight, have wheeled on "expert" after expert, all of whom speak with one voice about this.

They are seriously deluded. But what is worrying is that not a single pundit or journalist ever questions this delusion. The notion that getting the housing market moving again by attempting to keep prices high is a ludicrous and painfully crass answer which breaks the fundamental rules of market economics.

Once houses become a depreciating asset, which they have been now for one and a half years, they become subject to the same rules as any other depreciating asset. Yet somehow, magically, housing is considered "different". This is nonsense.

Of course we all know that firstly you cannot support the unsupportable in this way, and secondly it gives out the very opposite signal to that required, which is to avoid ever again promoting housing as a quick fix personal equity investment for the average person. It is the substitution of house inflation for actually working for a living which has ruined this economy, and what does the government do? It promotes exactly the paradigm that led us into this mess.

Instead of hedging around this subject, which all the media and almost every single economics "expert"does , they all need a liberal dose of economic syrup of figs to purge themselves of the delusion. Part of the delusion is of course a studied one, and represents an avoidance of telling people how it really is for fear of being found out. Ministers and financiers are constantly trying to invent a security blanket around those in negative equity instead of getting them to face the truth.

The best way to "support" the housing market is to let it fall to sustainable and affordable levels. If a few hundred thousand people go through hell then that is tough, because if the delusion is extended much further it's going to be hell for a lot more than that. No-one EVER mentions that cheaper housing will support about ten times the number of people than would suffer from it.

This is a message that sorely needs to be made, but I fear the disproportionate sympathy for those who got themselves into a mess as a result usually of greed and opportunism will always outway what should be much more sympathy for those who never got on the "ladder" in the first place.

The housing market and the money supply are inextricably linked with the bulk of our means of exchange (broad money) having been borrowed into existence through domestic mortgages.

It is in truth the continuation of the debt-based money system that is being supported by "getting the banks lending again", the housing market being merely the means to do so.

Having performed valiantly in the recent past, the housing market is again being recruited to this end since there is really no alternative potential asset bubble at the moment, and certainly not enough productive enterprise that might borrow to create real wealth.

IMHO they are now flogging a dead horse, and the debt-based money system itself will fail due to the lack of viable borrowers.

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I think you all have it the wrong way round. The reason the government wish to keep house prices high, is that houses form the "asset base" of banks and building societies, it's nothing at all to do with the public's view of it. If prices fall, how can the banks avoid making substantial losses on re-possession? I think this ties in with the other announcement about the government subsidising mortgages for two years - it's all an attempt to brainwash people into thinking high prices are a good idea, to avoid the *ankers "crystallising" their losses.

Inclined to agree. These schemes are spun as boosting the house market and helping those in mortgage difficulties.

In fact, as I understand the scant detail so far, it is not a payment holiday. The Government is guaranteeing the lender, not the borrower.

In effect, it is shoring up the banks and building societies against defaults and rising arrears. I don't believe it will promote any new transactions and already the existing HomeBuy and shared equity schemes have had little take-up.

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You need to think a bit deeper.

Have you not considered what you are suggesting ?

If house prices collapse, then so do the banks that have loaned money secured on them, and the taxpayer will have to bail them out.

Its important for this Government to keep the banks solvent, hence the reason house prices have to remain at their current levels. We have seen a collapse in the Banking sector and that was before we had the possibility of a house price crash, imagine if there was a crash on top !!!

It's savers like me who you would like to tax more to support those mortgaged up to their eyeballs that have kept half of the banks solvent in the first place, ffs!!! Don't blame savers and those who have lived within their means for the collapse of the western economies - think you might need to look a bit closer to home by the sounds of things.

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Another good post VP.

Make houses affordable, lets see the return of insentives to work.

Sitting in your fully paid up cottage blowing hash smoke up the chimney is not an incentive to work, that is why the VI`s tried to use ever increasing house prices as an incentive to stay on the treadmill making your payments and making profit for the VI`s. This boom has been a great way to keep the masses occupied in making profit for those further up the tree. The early industrial factory owners could only have dreamed of such an opportunity. The average person won`t work for the man if their basic housing costs are covered i.e they own outright and only pay for upkeep. They may be unlikely to have excess debt either?

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It's savers like me who you would like to tax more to support those mortgaged up to their eyeballs that have kept half of the banks solvent in the first place, ffs!!! Don't blame savers and those who have lived within their means for the collapse of the western economies - think you might need to look a bit closer to home by the sounds of things.

If people had not been selfish and participated in the modern economy then we most likely would not have seen cheap easy credit dry up overnight.

Savers have a huge responsibility in destabilising the markets and freezing up the Global Economy, as indeed is the next barrier and that is the working classes lack of responsibility when it comes to paying higher taxes. Its simply not feasible to tax the rich any further as their numbers are few, and they would simply go offshore.

The working classes are the masses, and a miserly extra 7p in the pound in tax would go a long way to solving many of the problems we see today.

Its encouraging to see that the Government have finally identified savers as the problem and have lowered the interest rates, and made it far harder for people to simply sit back and save, which in a our new economy is worse that being on the dole as its causes a huge block in the financial pipeline. In order for the world economy to prosper, people need to borrow and spend.

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It's savers like me who you would like to tax more to support those mortgaged up to their eyeballs that have kept half of the banks solvent in the first place, ffs!!! Don't blame savers and those who have lived within their means for the collapse of the western economies - think you might need to look a bit closer to home by the sounds of things.

LOL Laurejon is bear baiting. He doesn't mean it!

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I'm afraid it's now game over. The UK is only for illegal immigrants, chavs, criminal gangs and scammers. There is nothing productive about the UK and the rest of the world doesn't need it. This is no longer about house prices, because it is now clear to see that if you can't afford a house now, you never will.

Sorry to savers and the honest, decent hard working people of this country. You will probably be living in a cardboard box on the streets soon. The people who have robbed you over the years are laughing hard now.

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If people had not been selfish and participated in the modern economy then we most likely would not have seen cheap easy credit dry up overnight.

Savers have a huge responsibility in destabilising the markets and freezing up the Global Economy, as indeed is the next barrier and that is the working classes lack of responsibility when it comes to paying higher taxes. Its simply not feasible to tax the rich any further as their numbers are few, and they would simply go offshore.

The working classes are the masses, and a miserly extra 7p in the pound in tax would go a long way to solving many of the problems we see today.

Its encouraging to see that the Government have finally identified savers as the problem and have lowered the interest rates, and made it far harder for people to simply sit back and save, which in a our new economy is worse that being on the dole as its causes a huge block in the financial pipeline. In order for the world economy to prosper, people need to borrow and spend.

I though the whole reason for the collapse was due to people over-participating in the modern economy!!! This is a ridiculous difference of opinions and I've got too much work to get on with to get sucked in. I'll leave this thread by saying that I can't get my head aroundyour point of view. I think, perhaps, you work for the government. At least, you should do!!!!

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The housing market and the money supply are inextricably linked with the bulk of our means of exchange (broad money) having been borrowed into existence through domestic mortgages.

It is in truth the continuation of the debt-based money system that is being supported by "getting the banks lending again", the housing market being merely the means to do so.

Having performed valiantly in the recent past, the housing market is again being recruited to this end since there is really no alternative potential asset bubble at the moment, and certainly not enough productive enterprise that might borrow to create real wealth.

IMHO they are now flogging a dead horse, and the debt-based money system itself will fail due to the lack of viable borrowers.

How about using a house as a home, where you live and raise a family and protect yourself from the elements?

It's a crazy idea I know!

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LOL Laurejon is bear baiting. He doesn't mean it!

Oh bugger! Fairly new to this site so bit wet around the ears I'm afraid! Oh well, at least I've made his day I spose. Still, there are genuinely people who feel that way in society! One born every minute, apparently. Bit like me in this instance!

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You are of course absolutely right, except ......

how else could have Brown (and the US, Irish, Spanish, Dutch governments....etc .......) had several years of economic growth, low unemployment and strong tax receipts but for HPI?

Because of our culture of low saving and inadequate state pensions, property is for most people the only valuable asset they have.... and which can give them to confidence to borrow and spend.

Brown understands that perfectly ....

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