Osborne Is Addicted To Rising House Prices - Grauniad

[Snugglybear]

http://www.theguardian.com/money/2014/dec/03/autumn-statement-stamp-duty-george-osborne-wants-high-house-prices

Column by Patrick Collinson

Headline "Stamp duty change shows Osborne is addicted to rising house prices"

First two paragraphs

George Osborne revealed yet again that he is addicted to rising house prices. When the economy was tanking, he pumped it back up by Funding for Lending (cheap mortgages) and Help to Buy (easier loans). But in recent months the property market has been showing signs of flagging – and possibly going stone cold ahead of the election. So what is the centrepiece of the autumn statement? A plan to pump the market back up with an £800m cut in stamp duty.

It should come as no surprise that estate agents and mortgage brokers are busily issuing statements wholeheartedly supporting his “bold” move. Within seconds of the announcement, shares in giant property website Rightmove bounced.

Edited December 4, 2014 by Snugglybear

[TheCountOfNowhere]

Not everyone agreed:

http://www.telegraph.co.uk/finance/autumn-statement/11271020/Foxtons-share-price-hit-by-stamp-duty-reforms.html

"

Foxtons share price hit by stamp duty reforms Overhaul of property tax hits wealthy Londoners"

[Si1]

Err, guardian, debt ponzi, pot. Kettle.

[Guest Jemmy Button]

I can't remember The Guardian ever writing about this during the tripling of house prices during the Labour Party 13 years in power.

[Bruce Banner]

http://www.theguardian.com/money/2014/dec/03/autumn-statement-stamp-duty-george-osborne-wants-high-house-prices

Column by Patrick Collinson

Headline "Stamp duty change shows Osborne is addicted to rising house prices"

First two paragraphs

Obvious as it may be, it's nice to see it getting column inches in the main stream media.

[Snugglybear]

I can't remember The Guardian ever writing about this during the tripling of house prices during the Labour Party 13 years in power.

Patrick Collinson has always been critical of rising house prices, BTL, shared ownership - all the bad aspects of the housing market.

Try this from 2005 http://www.theguardian.com/business/2005/sep/30/politics.money?INTCMP=SRCH

(It is fair to say, though, that other writers in the Grauniad have taken different, and varying, stances.)

[billybong]

The guardian link article is a roundabout way for them to publicise Mr Osborne's stamp duty scheming and to try to give people confidence in increasing house prices.

If the guardian article had gone on to show how the possible increase in house prices was such a rotten idea for the economy, for people in general and how it was sucking investment out of rebalancing the economy etc etc etc etc then that would have been a different matter.

The guardian is one of those wolf in sheep's clothing newspapers.

Edited December 4, 2014 by billybong

[Snugglybear]

The guardian link article is a roundabout way for them to publicise Mr Osborne's stamp duty scheming and to try to give people confidence in increasing house prices.

If the guardian article had gone on to show how the possible increase in house prices was such a rotten idea for the economy, for people in general and how it was sucking investment out of rebalancing the economy etc etc etc etc then that would have been a different matter.

The guardian is one of those wolf in sheep's clothing newspapers.

Oh, really? Not criticism of the consequences of the change, then?

More from Patrick Collinson's article.

Hurrah for hard-pressed home buyers? Maybe for a day or two - until the ugly dynamics of the market assert themselves. A buyer who on Wednesday could afford a maximum of £275,000 will on Thursday be able to afford £280,000. Inevitably, they will bid more to secure a property - so the tax cut translates almost instantly into a house price rise.

As Prof Michael Ben-Gad of City University said immediately after the stamp duty cut was announced: “The short-run impact is likely to be a rise in house prices, because the immediate supply of housing is inelastic and sellers will pocket most of the tax reduction.”

But surely first-time buyers should welcome these cuts? Not so. Priced Out, the campaign group representing young buyers excluded from the market agrees with Ben-Gad. Its spokesman, Duncan Stott, said: “There is a real risk that today’s stamp duty changes will just end up inflating house prices. A house sold at the current average price of £273,000 will now be liable for £4,540 less stamp duty, but since sellers want to maximise the sale price of their property, they will expect buyers to pay this money to the house instead. You have to wonder whether George Osborne is trying to stoke up house prices in advance of next year’s general election.”

[billybong]

Oh, really? Not criticism of the consequences of the change, then?

More from Patrick Collinson's article.

The 2 paragraphs quoted show the roundabout message about house prices (maybe) going up. Emphasis on the words roundabout message. Young buyers had better get on now or they will be priced out. Similarly for their article in the other guardian link above about pension money going into BTLs etc. They take the attitude that all publicity is good publicity.

There's nothing there about it being a rotten idea for the economy, for people in general and how it's sucking investment out of rebalancing the economy etc etc etc etc.

Edited December 4, 2014 by billybong

[Fully Detached]

I just saw on the BBC site that a Tory has been arrested for rape.

I knew it was too much to hope that is was Osborne, for ******ing the economy.

[interestrateripoff]

Wrong the economy is addicted to rising house prices.

[billybong]

Wrong the economy is addicted to rising house prices.

+1

Indeed.

It's a bit rich and misleading to single out Mr Osborne considering the Conservative, Labour and LibDems joint involvement over the years - although he has taken it to new extremes with all the government manipulation. It's got to the stage where he's gone beyond beyond obsession to obsessive compulsive disorder along with the others in Parliament.

It's a real problem for the UK.

Edited December 4, 2014 by billybong

[Bruce Banner]

+1

Indeed.

It's a bit rich and misleading to single out Mr Osborne considering the Conservative, Labour and LibDems joint involvement over the years - although he has taken it to new extremes with all the government manipulation. It's got to the stage where he's gone beyond beyond obsession to obsessive compulsive disorder along with the others in Parliament.

It's a real problem for the UK.

Osborne criticised "Labour's house price bubble" when he was in opposition and then went on to further inflate it, which in my opinion makes him worse than Labour.

At least you know where you stand with Labour, they always wreck the economy, but we expect better from the Conservatives.

[Borisina]

The Public get what the public want. If buyers put that money saved from SD into the grabbing claws of the seller then more fool them.How is it even news that all the scummy political parties want rising house prices!

[@contradevian]

I can't remember The Guardian ever writing about this during the tripling of house prices during the Labour Party 13 years in power.

Yup destroy the messenger.

[billybong]

Osborne criticised "Labour's house price bubble" when he was in opposition and then went on to further inflate it, which in my opinion makes him worse than Labour.

At least you know where you stand with Labour, they always wreck the economy, but we expect better from the Conservatives.

+1

Just to say a lot of people expected better from the Conservatives and indeed they "promised" better before the last general election but they are a lost cause now.

Mind you with their lack of real opposition to NuLabour the writing was on the wall.

Edited December 4, 2014 by billybong

[Bruce Banner]

+1

Just to say a lot of people expected better from the Conservatives and indeed they "promised" better before the last general election but they are a lost cause now.

Mind you with their lack of real opposition to NuLabour the writing was on the wall.

Thanks for pointing that out, I should have said expected, as there is no way that I will be voting Conservative again until the current leadership have been replaced with proper free market Conservatives. Until that time, UKIP will have my vote.

[iamnumerate]

Patrick Collinson has always been critical of rising house prices, BTL, shared ownership - all the bad aspects of the housing market.

Try this from 2005 http://www.theguardian.com/business/2005/sep/30/politics.money?INTCMP=SRCH

(It is fair to say, though, that other writers in the Grauniad have taken different, and varying, stances.)

Did they ever have a headline saying "Brown addicted to ever rising house prices"?

Edited December 4, 2014 by iamnumerate

[Venger]

Osborne criticised "Labour's house price bubble" when he was in opposition and then went on to further inflate it, which in my opinion makes him worse than Labour.

At least you know where you stand with Labour, they always wreck the economy, but we expect better from the Conservatives.

I could still forgive Conservative if it's a pump-and-dump, allowing banks to quietly offload into it - whilst allowing the same old types to think it's forever HPI for a new boom to have gone on to set massive new peaks in Bubble 2.0.... so soon after Bubble 1.0.

Buyers I have nothing in common with at all.... let them carry responsibility for their own market decisions, instead of volunteering other people to carry them for their reckless entitlement paying more than double what it is worth, whilst the buyers themselves too often claim they are the smartest/bestest. Don't tell me they are 'victims' when I have to restrain myself from going Dexter on them.

Forgive.. only if it leads to massive hpc in near future.... and banks able to do profitable volume lending.

[billybong]

Thanks for pointing that out, I should have said expected, as there is no way that I will be voting Conservative again until the current leadership have been replaced with proper free market Conservatives. Until that time, UKIP will have my vote.

I sometimes find it difficult to understand/comprehend how the Conservative party has changed and like before the last general election expect them to appear but now they are just career politicians trying to garner votes. The last few years have been a terrible waste of time.

Even Labour before NuLabour seemed to once have good intentions despite their wreckless handling of the economy.

Edited December 4, 2014 by billybong

[iamnumerate]

Yup destroy the messenger.

Well if the messenger was asleep for 13 years, why not point it out?

[Cozza]

I could still forgive Conservative if it's a pump-and-dump, allowing banks to quietly offload into it - whilst allowing the same old types to think it's forever HPI for a new boom to have gone on to set massive new peaks in Bubble 2.0.... so soon after Bubble 1.0.

Buyers I have nothing in common with at all.... let them carry responsibility for their own market decisions, instead of volunteering other people to carry them for their reckless entitlement paying more than double what it is worth, whilst the buyers themselves too often claim they are the smartest/bestest. Don't tell me they are 'victims' when I have to restrain myself from going Dexter on them.

Forgive.. only if it leads to massive hpc in near future.... and banks able to do profitable volume lending.

Imo the opportunity for pump and dump during this cycle has been sadly missed. Lots of pumping. Not much dumping.

UK banks still in a parlous state.

http://www.reuters.com/article/2014/11/21/us-rbs-capital-idUSKCN0J51TQ20141121

http://uk.reuters.com/article/2014/12/01/uk-coopbank-boe-tests-idUKKCN0JF1IG20141201

...a situation to which they have responded by overloading on even more dubious mortgage lending backed by various market-distorting government schemes.

The whining about the supposed 2019 ring-fencing of retail and investment arms is already beginning:

http://uk.reuters.com/article/2014/10/12/uk-banks-britain-director-idUKKCN0I106Y20141012

...doubt it will happen in the way originally envisaged.

Government by corporatism really does seem to have taken over the UK, with there now being no real, discernible difference between the two bought-and-paid-for main parties.

You know things must be bad when a French bank calls it tops for the value of sterling-denominated assets...

Edited December 4, 2014 by Cozza

[Bruce Banner]

I could still forgive Conservative if it's a pump-and-dump, allowing banks to quietly offload into it - whilst allowing the same old types to think it's forever HPI for a new boom to have gone on to set massive new peaks in Bubble 2.0.... so soon after Bubble 1.0.

Buyers I have nothing in common with at all.... let them carry responsibility for their own market decisions, instead of volunteering other people to carry them for their reckless entitlement paying more than double what it is worth, whilst the buyers themselves too often claim they are the smartest/bestest. Don't tell me they are 'victims' when I have to restrain myself from going Dexter on them.

Forgive.. only if it leads to massive hpc in near future.... and banks able to do profitable volume lending.

As a lifelong Conservative, I gave them the benefit of the doubt until it became obvious they had decided the peak of Labour's housing bubble is now a target to better. They even point out that there is no bubble as prices in some areas are still below the 2007 peak.

[Venger]

Imo the opportunity for pump and dump during this cycle has been sadly missed. Lots of pumping. Not much dumping.

UK banks still in a parlous state.

I understand your position, and doubts. I have to cling on to the possibility.

There is too little debt secured against higher end UK houses in my opinion. Or at least, too many oldies I know of all own outright... houses which due to occasional transactions at the margin, sees buyers setting higher prices, and now all their houses valued at around £300K-£500K+ (owned outright).

I look back to previous (proper) real-estate crashes, where price sunk so low, way below even fair-value (if and when it can be objectively measured).

My thinking is this was allowed by banks, because of the opportunity to write new mortgages in volume to new buyers. The implied and immediate 'book value of new mortgages' vs volume sell off by owners prime property sold at much much lower prices... could be a very fast turnaround for the health of many banks.

Even the stress test is, in some ways, criteria based on concern prices are way too high now. When more of them can withstand it... let it happen. Quite encouraging only a few struggling to cope with 35% hpc.

The eight banks are being tested on their ability to withstand a theoretical 35 percent crash in house prices and surging unemployment and interest rates, with the central bank's Prudential Regulation Authority due to announce the results on Dec. 16.

From the 1992-1995 thread, with over-extended, private planes, race-horses, new Bentley every other year, mansion he bough cheap in previous crash (where he couldn't careless about the situation of former owner) to be sold bubble boy Serpico in distress in the next crash... forever blaming Thatcher for his downfall.

Everyone was skint and going bust and house were in real recession and not selling eventually we sold the house under extreme pressure from the bank for £110 to a Neuto Surgeon.

(Commercial premises) Do you think they would accept £40K? I told them I wuld not agree to that. What if we give you £40K for yourself and a brand new car and a good job? and then offer the bank £40K?

..I agreed to let them try the bank at the £40K, I had nothing to lose the security contract I had signed restricted the bank only to property I was amazed the bank accepted their offer leaving a £160K shortfall, At first I bluffed and refused the bank authority to sell at that price unless their legal boys drafted a wateright agreement that if the house sold at £110 and the business premises at £40K I would be clear of all liabilities that stood at £350 most of which was compounded interest anyway.

[winkie]