Jump to content
House Price Crash Forum
smiley

Compensation For Hpi Victims

Recommended Posts

When consumer prices rise fast, certain groups lose out: pensioners, and others on a fixed income; workers with weak negotiating ability to get pay rises; and people who's assets earn a fixed nominal rather than real interest rate (eg, people who keep their wealth as cash).

With high rates of asset price inflation, there is a similar distortion. If house prices, say, double, as they have done over the last five years or so, then this does not mean an increase in wealth, but a re-distribution of it. The people who suffer in this case are people who buy after the rise, and people who sell before it. These groups are effectively giving money to others, in particular those who bought their house before the price spike, and sold it later (especially people who sold more than one house). The 'feelgood' factor felt by homeowners isn't a direct benefit, unless they are likely to sell-up, except through greater access to MEW.

The sums involved may actually be huge: basically, this is a mass grab by the home-owning classes, in which the government (and other VI's) have aquiesced.

Should there be compensation? If so, how much? Or would a good House Price Crash be sufficient?

Share this post


Link to post
Share on other sites

Compensation from whom? For buying the wrong thing?

Maybe a huge bill board on every lawn stating:

"Government warning: The Value of your asset may deprciate significantly"

Perhaps houses should have a forteen day return policy if your furniture doesn't fit.

Properties are sold as seen (after survey etc) and you get what you pay for. If the next person refuses to pay even half what you paid, tough, and more fool you.

Compensation my bottom.

Share this post


Link to post
Share on other sites

Compensation from whom? For buying the wrong thing?

Maybe a huge bill board on every lawn stating:

"Government warning: The Value of your asset may deprciate significantly"

Perhaps houses should have a forteen day return policy if your furniture doesn't fit.

Properties are sold as seen (after survey etc) and you get what you pay for. If the next person refuses to pay even half what you paid, tough, and more fool you.

Compensation my bottom.

I think the suggestion is even more insane than that. ie, compensate people who haven't bought

Share this post


Link to post
Share on other sites

I'm being compensated for not having bought.

With a low rent that is 11% of my gross salary.

My rent is a bit higher at 25%.

If I bought a similar property in my area of NW1, the mortgage alone would be near 80% dropping to around 60% in the suburbs.

Share this post


Link to post
Share on other sites

I'm being compensated for not having bought.

With a low rent that is 11% of my gross salary.

Lucky you,

However, my mortgage is 5% of my gross salary................

Edited by kevino

Share this post


Link to post
Share on other sites

My rent is a bit higher at 25%.

If I bought a similar property in my area of NW1, the mortgage alone would be near 80% dropping to around 60% in the suburbs.

Rents are often about 25% of gross income for 'typical' family homes. Mine is. Mortgages vary much more of course depending how much capital you can put in but (to remind you of what you know) basing on 25 year repayment:

Borrowed 2 x Gross Salary

APR 2% - 10% Salary to repay

APR 4% - 13% Salary to repay

APR 6% - 16% Salary to repay

APR 8% - 19% Salary to repay

Borrowed 3 x Gross Salary

APR 2% - 15% Salary to repay

APR 4% - 19% Salary to repay

APR 6% - 23% Salary to repay

APR 8% - 28% Salary to repay

Borrowed 4 x Gross Salary

APR 2% - 20% Salary to repay

APR 4% - 26% Salary to repay

APR 6% - 31% Salary to repay

APR 8% - 37% Salary to repay

Borrowed 5 x Gross Salary

APR 2% - 26% Salary to repay

APR 4% - 32% Salary to repay

APR 6% - 39% Salary to repay

APR 8% - 47% Salary to repay

That is why 3 to 3 1/2 times gross salary is the long term average borrowing for a home. That way you can cope with 6 or 8 % repayment rates - the long term average. If APRs really will be bouncing around 5% for ever more then maybe 4 x Salary becomes feasible but not x5 or higher.

Share this post


Link to post
Share on other sites
Guest Bart of Darkness

Compensation for all I say.

For example, Gary Baker once pinched one of my Jelly Tots when I was 5, I'm currently taking out propceedings for the mental trauma (and loss of financial assets) involved.

After that I plan to sue Peter Gill for cheating at a game of Hide and Seek when I was 6. I was in tears at the time I can tell you. The swine. Why should he be allowed to get away with that?

Then I plan to sue my old school for making me wear an unflattering shade of red for their school uniform (red is just soooo not me y'know).

Then I plan to sue the desecndants of Issac Newton for the time I fell over and grazed my knee at school sports day. Such humiliation, such trauma. And it was all gravity's fault.

Then I plan to sue my careers advisor for telling me that there was no way I was going to be the next David Cassidy. That one piece of bad advice has ruined my life and left me having to find a proper job and work for a living. I want compensation.

Gimme, gimme, gimme!

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.