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libspero

Boris Is Wrong, And Grant Shapps Is Right:

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Neil O'Brien

Telegraph - 18/10/2010

Article: HERE

Extracts:

In today’s Telegraph, Boris Johnson argued that that we should build more “affordable” properties – those not sold on the open market – to help people who can’t afford to buy privately. But each affordable home costs an average of £45,000 using current mechanisms

The truth is that you can’t have “affordable housing” unless you deal with rising house prices.

Boris writes that “The sad truth is that it is still psychologically essential to the British middle classes to have a sense that our principal asset is gently appreciating in value or at least it will over the long term”.

This is a duff argument, and uncharacteristic of the blond bombshell. Actually rising house prices (driven by supply constraints) have always tended to choke off periods of economic growth in Britain. Making housing more expensive simply means less to spend on everything else. Nor is there any need to have rising housing costs to have rising economic confidence. If there is a lesson from the debt-fuelled boom years, surely it is that we don’t want to base our future prosperity on illusory wealth created by unsustainable inflation? Houses are not magic cashpoints.

Ever-rising prices lock the younger generation out of home ownership, cost families a fortune in mortgage payments, and force older people to cough up to help get their kids on the housing.

Excellent article.. that's much more like it!

Edited by libspero

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Neil O'Brien

Telegraph - 18/10/2010

Article: HERE

Extracts:

Excellent article.. that's much more like it!

Boris is wrong on this. We all need to learn that high house prices means less wealth. Look at Germany, with much lower property values.

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He speaks for a generation of people between very late 30s and maybe up to 50 years old who were sh*t at everything and covered it up with a house-price-inflation-shaped figleaf

hope they burn

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Good article, thanks for posting.

"If you want more affordable housing, you need more housing and a lower average price."

Normally we usually read that we need low interest rates and more lending, so what a refreshing change it is ,to read the obvious, that it is lower prices we need for housing to become affordable.

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Normally we usually read that we need low interest rates and more lending, so what a refreshing change it is ,to read the obvious, that it is lower prices we need for housing to become affordable.

Quite. The phrase 'affordable' housing is probably the most pernicious manifestation of bubble mentality.

They want prices for normal to keep going up and up while introducing a special category of so-called 'affordable' housing which people who weren't homeowners before the bubble was inflated can afford. Of course in order to be 'affordable' these places must be even more crap than the rest of the housing stock.

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Good stuff (apart from the "driven by supply constraints" - until the cause is recognised the problem can't be properly fixed). Just a pity that the mainstream media is years late with this message, but better late than never.

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Boris is wrong on this. We all need to learn that high house prices means less wealth. Look at Germany, with much lower property values.

Boris' premise isn't wrong. It does very well seem to be psychologically esssential for the middle classes that house prices always go up. However, the cure is not to pander to their addiction.

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  • 146 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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