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House Prices Aren't The Problem - George Osborne

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Hearing on the radio that house prices aren't the problem, it's the non-availability of 95% mortgages. No doubt he has some new scheme to aid the bankers in mind.

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Hearing on the radio that house prices aren't the problem, it's the non-availability of 95% mortgages. No doubt he has some new scheme to aid the bankers in mind.

whilst the sentiment is true, it is in fact a very socialist view.

Odd coming from a Tory.

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Hearing on the radio that house prices aren't the problem, it's the non-availability of 95% mortgages. No doubt he has some new scheme to aid the bankers in mind.

Total lie they are a major problem for him they just ain't high enough <_<

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Surely to god if people can't afford more than 5% for a deposit it is a problem ..

i dont like a lot of terms used in the lending market...Deposit is one of them

This not a deposit in the normal sense of a purchase....in which you place a deposit with a third party..if the deal falls through, you get it back, just like in renting where you leave a deposit with the landlord to cover damages he might incur when you leave..

A deposit sounds like a protection....in the case of a mortgage it is nothing of the sort..It is a part payment..it is 100% vulnerable to capital loss. It has nothing to do with the loan deal whatsoever...its not part of the mortgage.

What it is is YOUR skin in the game..Your Money. It is at risk whether you fulfil all your loan obligations or not...and no-one else has to lift a finger for you to lose it all...it can just vanish.

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Surely to god if people can't afford more than 5% for a deposit it is a problem ..

I think you are being a bit old fashioned, to afford a house now you need a 100% mortgage. Saving for anything is so yesterday.

In our wonderful new world you can have anything today with 0% down.

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High housing costs are the reason all the productive jobs have gone overseas, Mr Osborne.

We've priced ourselves out of the world jobs market, because we cost a fortune to house ourselves.

Honestly, this Osborne guy is a total idiot.

Edited by SleepyDog

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The real problem is that there aren't enough 125% mortgages available so people can't do up the homes they buy. There was a very forward-looking bank that used to do this, I can't remember its name just now but I'm pretty sure it has done well over the years.

So I for one am glad the government is starting to address the real issues but they need to go much further - it is clearly a market failure that the hard working, aspirational families can't get a new kitchen and conservatory immediately on moving in to their nice houses.

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Hearing on the radio that house prices aren't the problem, it's the non-availability of 95% mortgages. No doubt he has some new scheme to aid the bankers in mind.

The oddest thing is that NO ONE is mentioning how you cannot borrow more than a particular multiple of income - so people simply cannot keep borrowing more and more to keep house prices rising. Even now, most first time buyers will be doing 4x joint income in most parts of this country to buy anything atall. That is crazy!

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The oddest thing is that NO ONE is mentioning how you cannot borrow more than a particular multiple of income - so people simply cannot keep borrowing more and more to keep house prices rising. Even now, most first time buyers will be doing 4x joint income in most parts of this country to buy anything atall. That is crazy!

i've tried running the whole income multiple argument many times. If people understood it no one would make the cretinous statements about prices always rising, and they would also understand about real-life affordability. But the whole thing is a bit too much like analysis, and why would you do that on the biggest and longest term investment you will ever make?

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whilst the sentiment is true, it is in fact a very socialist view.

Odd coming from a Tory.

..a thick one at that ...does he not realise the more mortgages available.. the higher the prices will balloon ...before bursting in his inept face..... :rolleyes:

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High housing costs are the reason all the productive jobs have gone overseas, Mr Osborne.

We've priced ourselves out of the world jobs market, because we cost a fortune to house ourselves.

Honestly, this Osborne guy is a total idiot.

Agree 100%. I am DEEPLY, DEEPLY disappointed in him. I thought he was intelligent. Now I just think he's a moron - just like G Idiot-Brown was. :angry: :angry:

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Hearing on the radio that house prices aren't the problem, it's the non-availability of 95% mortgages. No doubt he has some new scheme to aid the bankers in mind.

House prices are not a problem as long as mortgage rates stay below 5%.

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House prices are not a problem as long as mortgage rates stay below 5%.

...and you're happy to have a massively unequal society, where wealth is based mostly upon inheritance,

and there is very little reward for working, and you're happy for all available investment to be tied up in assets that

generate no real economic growth...

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...and you're happy to have a massively unequal society, where wealth is based mostly upon inheritance,

and there is very little reward for working, and you're happy for all available investment to be tied up in assets that

generate no real economic growth...

I don't think that is what I said. What I was getting at was that most potential buyers do not see house prices as a problem as with low interest rates the cost of a mortgage and the cost of rental is not very different.

Of course high house prices are a problem to the wider economy and for society for the reasons you state.

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I don't think that is what I said. What I was getting at was that most potential buyers do not see house prices as a problem as with low interest rates the cost of a mortgage and the cost of rental is not very different.

Of course high house prices are a problem to the wider economy and for society for the reasons you state.

Yes, it's more that house prices have been high for perhaps a decade. If you were 16 in 2003 - which is probably the youngest that people might even notice how much houses cost - you'd be 26 now and would never have seen house prices at 'historical norms'.

The length of this period of high house prices also means that the sheer number of people with huge mortgages is much greater than in the early 1990s.

Don't see how IRs can be hiked without either a major debt write-off or serious wage inflation.

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I don't think that is what I said. What I was getting at was that most potential buyers do not see house prices as a problem as with low interest rates the cost of a mortgage and the cost of rental is not very different.

Of course high house prices are a problem to the wider economy and for society for the reasons you state.

Right, so what he was actually saying was:

'High houses prices aren't seen as a problem by people who don't understand economics (and that

allows me to achieve my political goal of a return to a feudal economy)'

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Right, so what he was actually saying was:

'High houses prices aren't seen as a problem by people who don't understand economics (and that

allows me to achieve my political goal of a return to a feudal economy)'

Pretty much so. He is a politician and he knows that most people are stupid enough to go for HTB because the headline numbers (mortgage payments vs rent) stack up even though they will then find themselves tied into a system that enslaves them for the rest of their lives.

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Pretty much so. He is a politician and he knows that most people are stupid enough to go for HTB because the headline numbers (mortgage payments vs rent) stack up even though they will then find themselves tied into a system that enslaves them for the rest of their lives.

exactly right. it is our duty as HPCers to explain this to as many young people as possible. I certaintly do, and if you blame the government (labour AND tory) they seem to get it.

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The oddest thing is that NO ONE is mentioning how you cannot borrow more than a particular multiple of income - so people simply cannot keep borrowing more and more to keep house prices rising. Even now, most first time buyers will be doing 4x joint income in most parts of this country to buy anything atall. That is crazy!

That is what I can't understand either. Of course the deposit is the limting factor for a lot of people, but are the banks just going to keep lending higher and higher multiples to keep this going - I doubt it.

This scheme will help high earners who have not got much saved, but what about the rest? In my area of outer London, we are getting to the stage where 2 bed flats are £400k. Even with HtB2 taking care of the deposit that still requires a £75k income if the banks are prepared to lend at 5x income.

Ok, so those earning less can move a bit further out for now, but what happens if this scheme causes the surge in prices they are looking for? There will end up being nowhere within commuting distance of London available to people earning less than £75k and that is a massive majority of the workers in the region.

So we will end up in the same position we are in now regarding affordability just with much higher prices and much higher debt levels. It doesn't take a genius to see that this won't work.

Edited by worried1

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So we will end up in the same position we are in now regarding affordability just with much higher prices and much higher debt levels. It doesn't take a genius to see that this won't work.

But that is not Today's problem, is it ?

Today, we need to get people signed up for 30+ years servicing debts to banks on previously overpriced properties - else it all goes pear-shaped today.

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That is what I can't understnad either. Of course the deposit is the limting factor for a lot of people, but are the banks just going to keep lending higher and higher multiples to keep this going - I doubt it.

This scheme will help high earners who have not got much saved, but what about the rest? In my area of outer London, we are getting to the stage where 2 bed flats are £400k. Even with HtB2 taking care of the deposit that still requires a £75k income if the banks are prepared to lend at 5x income.

Ok, so those earning less can move a bit further out for now, but what happens if this scheme causes the surge in prices they are looking for? There will end up being nowhere within commuting distance of London available to people earning less than £75k and that is a massive majority of the workers in the region.

So we will end up in the same position we are in now regarding affordability just with much higher prices and much higher debt levels. It doesn't take a genius to see that this won't work.

HTB2 takes care of deposit ....NOT...people seem to think they can afford to borrow 20% more today than they could last Friday.

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