This Helping Hand On Homes Is Sheer Lunacy

[The Eagle]

This article ticks all the right boxes, Margareta Pagano seems to be a true HPCer, some quotes:

Britain has a chronic housing crisis; but it's a supply-side problem, not a demand one. House prices are too high, with most properties costing at least five times the average salary. Over the past two decades, house prices have more than doubled in real terms while incomes have not.

With prices so high and incomes falling fast, it's no surprise that banks and building societies will only lend to buyers who have at least a fifth of the price in ready cash. The banks are correctly terrified that borrowers will not be able to finance future repayments when interest rates rise again, or that house prices do fall.

[...]

That's why George Osborne's Help to Buy mortgage subsidy scheme is sheer lunacy as it confuses the supply-side problem with a demand-side problem. Is the Treasury now in the business of being a player in the sub-prime lending industry?

[...]

Yet there's an alternative, and that's to build more houses now, and more affordable ones; private as well as new council housing.

[...]

If you build more houses, prices will come down. More homes should also bring down the cost of rents that are also punitive.

[...]

That's why building state-financed housing for renting, an idea being pushed by Dr Tim Morgan of Tullett Prebon, is such a sensible solution. It would provide affordable housing and give the Chancellor with the single biggest lever he has to boost the economy; and it's a home-grown solution that requires no imports.

[...]

If there is a problem over building new homes, it's not that they encroach on green belt, but that so many of them, to borrow a phrase, are "pig ugly". That's the real crime.

Full article here:

http://www.independent.co.uk/news/business/comment/margareta-pagano/margareta-pagano-this-helping-hand-on-homes-is-sheer-lunacy-8546891.html

Looks like the HPC mindset is going mainstream, only the government is still in lala-land.

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Edited March 26, 2013 by The Eagle

[thecrashingisles]

This article ticks all the right boxes, Margareta Pagano seems to be a true HPCer, some quotes:

Full article here:

http://www.independent.co.uk/news/business/comment/margareta-pagano/margareta-pagano-this-helping-hand-on-homes-is-sheer-lunacy-8546891.html

Looks like the HPC mindset is going mainstream, only the government is still in lala-land.

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The main risk I see is that people are still fixated on building affordable housing. We should be thinking of building high-quality housing and then enjoying the overall increase in affordability that would result from an increased supply.

It's the older two-up, two-down terraces or equivalent properties which should become the affordable housing in the short term, not newly built substandard boxes which are subsidised in some way.

[blondeguy123]

Someone should start a petition at the No.10 site. Highlighting that flooding the market with cheap credit will only do one thing - push up prices and not help affordability at all. Hopefully if it became widely spread could draw attention to Tory HQ the massive mistake they have made.

I will never ever vote Conservative again.

[Executive Sadman]

I guess there must be a new generation of renting media hacks around. 5 years ago this very same policy would be unquestioningly cheerleaded by 99.9% of the press.

[okaycuckoo]

The only journo I've read in support of the scheme is David Smith Sunday Times - "the opposition to it is ridiculous".

[RufflesTheGuineaPig]

Someone should start a petition at the No.10 site. Highlighting that flooding the market with cheap credit will only do one thing - push up prices and not help affordability at all.

The tories are already aware of this - it's the entire point.

[blondeguy123]

because Labour were doing ever so well before this lot got in?

No! They were worse of course and I'd never vote for them either. Osborne's new scheme however is the sort of thing Labour would have done, I suppose I shouldnt be surprised in the two-party state.

UKIP seems the only alternative, despite the fact I don't know much about their policies. Perhaps they'd be just as bad.

[okaycuckoo]

No! They were worse of course and I'd never vote for them either. Osborne's new scheme however is the sort of thing Labour would have done, I suppose I shouldnt be surprised in the two-party state.

UKIP seems the only alternative, despite the fact I don't know much about their policies. Perhaps they'd be just as bad.

Start researching your local candidates, get in touch, and pick the one who's not a nutter or psychopath.

[Executive Sadman]

The only journo I've read in support of the scheme is David Smith Sunday Times - "the opposition to it is ridiculous".

Nobel prize in economics headed his way?

All he needs do is to invest in a tattoo of Charles Ponzi on his left butt cheek and i'd say its in the bag.

[Executive Sadman]

No! They were worse of course and I'd never vote for them either. Osborne's new scheme however is the sort of thing Labour would have done, I suppose I shouldnt be surprised in the two-party state.

UKIP seems the only alternative, despite the fact I don't know much about their policies. Perhaps they'd be just as bad.

Every party is bad in its own way. I dont much like UKIPs appeal to the curtain twitching anti everything blue rinse brigade. But its easier to claw back power the less centralized and more localized it is. Getting the hell out of the EU seems a good place to start.

[Blod]

The main risk I see is that people are still fixated on building affordable housing. We should be thinking of building high-quality housing and then enjoying the overall increase in affordability that would result from an increased supply.

It's the older two-up, two-down terraces or equivalent properties which should become the affordable housing in the short term, not newly built substandard boxes which are subsidised in some way.

It amazes me that we and the MSM use the term "affordable". NO one seems to notice that its use implies that the remainder must be "UNAFFORDABLE".

We are being allowed to become sidetrack by the solutions when the public are yet to accept the that the problem is that housing is too expensive.

[Snugglybear]

It amazes me that we and the MSM use the term "affordable". NO one seems to notice that its use implies that the remainder must be "UNAFFORDABLE".

We are being allowed to become sidetrack by the solutions when the public are yet to accept the that the problem is that housing is too expensive.

Strictly speaking "affordable housing" is a term used for housing which is deemed affordable to those with a median household income or an income below that.

So, what is the median household income in the UK in 2013? And how many households have the median income or lower? I'm talking post-tax income here, i.e. the income you can actually spend.

Also, the commonest guideline is that the carrying costs of housing (rent/mortgage, ground rent, maintenance charges) should not be more than 30-35% of the household's income (France, Canada, US, to my knowledge).

So, 30-35% of the median post-tax income in the UK is what per year? Which would mean affordable housing would cost what to buy or rent?

How many units of housing are currently available at that cost?

[plummet expert]

The main risk I see is that people are still fixated on building affordable housing. We should be thinking of building high-quality housing and then enjoying the overall increase in affordability that would result from an increased supply.

It's the older two-up, two-down terraces or equivalent properties which should become the affordable housing in the short term, not newly built substandard boxes which are subsidised in some way.

It all implies that house prices will fall if large scale building were encouraged. In fact it is only partly true. If interest rates were to be 'normal' then I firmly belive you would see an almighty correction - and boy do we need one! Land prices are controlled by the ability to borrow. If we put rates back up and restrict lending multiples to 2.25 x salary, prime and sub alike, then the market would adjust and rents would fall alongside indue course, HB would become sheaper, the cost of living would fall, the wage pressure would wane, the manufacturing would become cheaper........malinvestment to simple bricks on mud would correct, growth would return, some people would be in negative equity and some would go bankrupt - all alot better than the whole country living in lalalalalala land forever.

[SirGaz]

Theres plenty of houses being built in the southeast of Coventry, virtually all being built on ex industrial sites.

The trouble is they are all far more expensive than the equivalent older housing, fag packet calculations seem to put them twenty to thirty percent more.

The cheapest three bed terrace on right move is 157k an equivalent older house is anything from 100k to 130k.

I know they are all only asking prices but it just puts a chap off.

[Sir Harold m]

How many units of housing are currently available at that cost?

Quite a lot actually if you wander into Blacks or the Army & Navy surplus

[honkydonkey]

Quite a lot actually if you wander into Blacks or the Army & Navy surplus

If you wander into blacks you'll probably get a nice free stay in a great big house for a week.

[wonderpup]

I think it's cute that she seems to think that Osbourne is trying to solve the housing problem- he's not, He's trying to solve the 'how to get re- elected problem' that the Tories see hurtling toward them in the future.

This is about engineering a nice little boomlet in house prices just before the election- to create that essential 'feel good' factor they hope will sweep them back into power.

Sure many thousands of suckers citizens will be loaded up with unsustainable debt in the process- but who gives a f*ck about them-right?

[JustAnotherProle]

I think it's cute that she seems to think that Osbourne is trying to solve the housing problem- he's not, He's trying to solve the 'how to get re- elected problem' that the Tories see hurtling toward them in the future.

This is about engineering a nice little boomlet in house prices just before the election- to create that essential 'feel good' factor they hope will sweep them back into power.

Sure many thousands of suckers citizens will be loaded up with unsustainable debt in the process- but who gives a f*ck about them-right?

Exactly, the political class has no interest in actually solving the problems we face for the longterm benefit of the people of the UK, the sole concern is to get elected, no matter the the cost or short term damage this causes. Our government is simply infested with these personality types in high office which borders on sociopathic, no sense of morality, charm without substance, selfish short termist actions without thought on the actual effects on others, lack of real empathy, I see this all the time with MP's on TV.

We all know the sensible solution is to create a massive social building program of well planned, spacious and energy efficient housing, and a huge overhaul of social welfare and immigration just as a start...but this wont get anyone reelected or access to the excess of tax payers money or quangos, so short termist and destructive policy is introduced with no thought or reason in order to prolong careers or personal income at the expense of the many and it is beyond tragic .

[fluffy666]

because Labour were doing ever so well before this lot got in?

Indeed.

Suspect that UKIP will sweep the next GE on a 10% turnout..

I honestly don't know who to vote for.

[winkie]

Strictly speaking "affordable housing" is a term used for housing which is deemed affordable to those with a median household income or an income below that.

So, what is the median household income in the UK in 2013? And how many households have the median income or lower? I'm talking post-tax income here, i.e. the income you can actually spend.

Also, the commonest guideline is that the carrying costs of housing (rent/mortgage, ground rent, maintenance charges) should not be more than 30-35% of the household's income (France, Canada, US, to my knowledge).

So, 30-35% of the median post-tax income in the UK is what per year? Which would mean affordable housing would cost what to buy or rent?

How many units of housing are currently available at that cost?

Spot on.......and when we talk about loans for buying property we mean loans that are reducing.......otherwise what will people live on when they are too old to work.....are they expecting the principal to be one months state pension payment at the age of 70?

Edited March 27, 2013 by winkie

[interestrateripoff]

We build new home's what happens to the 1m or so that are empty?

[winkie]

We build new home's what happens to the 1m or so that are empty?

Why are they empty?.....holiday homes, homes bought by rich overseas investors somewhere to park their money safely and tax efficiently......derelict homes not fit for human habitation that require refurbishment owned by local authorities.....

You have a state system where what used to be peoples homes are now classified as investments to all and sundry therefore you price people out of having a secure affordable place to call their own and work for, be it renting or buying.

Look at Germany as an example......owning a home and the accumulation of property with high leveraged debt is not seen as a money making machine, they focus their growth strategy on what they see as real productive growth areas to benefit their country and people as a whole not just the privileged few as we do......