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Trampa501

3 Ways That Engineering A New House Boom Could Go Sour

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An extremely pertinent article in the Wall Street Journal from Simon Nixon

UK Housing policy could turn sour

The first is if the consumer-led recovery falters without a sustained pickup in investment and export-driven growth. This is a material risk since there is only so far the releveraging of the household sector can run as it adjusts to lower interest rates and higher loan-to-value ratios. Much depends on the willingness of first-time buyers to pay current high prices; transaction volumes are still very low. If the recovery does peter out, all the Treasury will have achieved is to encourage households to dive deeper into debt, requiring an even bigger adjustment in the future.

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The more people who dive in now, the more that won`t be competing to buy if and when I buy, but in fact I don`t think (in the UK) we are going to see serious numbers wanting to join the Ponzi now (Serious enough to keep it going I mean)

Edited by dances with sheeple

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When the FTBs fail to jump into the market, the government will resort to its last desperate measure and open the floodgates to nationwide speculative investment from the Far East, encouraged with British taxpayers' money. The process is already taking place across London. If their policy is successful they will be voted out. If it fails they will be voted out too.

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The coalition does seem to have embraced a range of policies from the pointless to the vindictive.. but trying to stoke a house price bubble when wages are falling and house prices are still historically overvalued...

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When the FTBs fail to jump into the market, the government will resort to its last desperate measure and open the floodgates to nationwide speculative investment from the Far East, encouraged with British taxpayers' money. The process is already taking place across London. If their policy is successful they will be voted out. If it fails they will be voted out too.

The only thing I can think is that our political classes are, generally, so completely insulated from everyday worries (and have been from birth) that they really don't think that a £250k house is expensive for normal people. Even if someone shows them a breakdown of what this average family earns and therefore how much they can actually afford, they'll simply not register.

I cannot think of any other reason. Left, Right, Keyensian, Austrian, Libertarian, Communiatrian, Anarchist, Monster Raving Loony, or, heaven forbid, Liberal Democrat.. I can't think of anyone on any part of the political spectrum justifying this.

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The only thing I can think is that our political classes are, generally, so completely insulated from everyday worries (and have been from birth) that they really don't think that a £250k house is expensive for normal people.

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