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Standard Letter To Mp On House Prices

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may be useful for forum member to send to their MP.

Dear MP,

I wanted to complain about house prices in this country especially London and the South East. Each successful government has not tackled the problem at its root cause. In fact in the current budget announcement the government is keen to let another asset boom continue as they are most interested in votes from house owners than building sustainable communities.

The average UK house prices have risen from £92,000 in 1999 to £163,000 now. This latter figure is still far too high. Over the same period average annual wages have risen from £21,000 to about £25,000. If house prices and average wages had both risen in line with general inflation over those ten years, then the average house would be selling today at about £121,000 and the ratio of house prices to annual wages would be near its sustainable historic level of 4.5.

Each government is keen this bubble going, rather than deflating it, as is obvious by the chancellor announcement to become a guarantor for lending.

I am sorry for those people who are now in negative equity because they took out large mortgages on overpriced properties at the wrong time. But I can't see why people who have not taken such risks should be punished (i.e. those who saved) by a mixture of high relative inflation and low interest rates.

No one benefits from house price inflation. High house prices is an illusion of wealth that means higher costs such as insurance. A person only realises the wealth if they sell their home then the 'wealth' is gone when they buy another one unless they move away. I dread to think how my children will be able to own their own homes outright at current values. A home owners children or wider family are affected by high house prices. They may need to move away from their parents to buy a home, which a real impact on support networks.

I look forward to the day when the government and Bank of England speak openly about the fact that asset bubbles create no long term economic benefit and a plan to not support overvalued asset prices. Government need to make sure for the need of higher deposits, a real boosting of housing supply, and taxing those who have second homes, to help the next generation.

yours sincerely,

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  • 239 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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