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Solve The Housing Crisis Without Negative Equity, Says Guarduan

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A 0% HPI target is part of the solution...

http://www.theguardian.com/society/2015/mar/14/britain-housing-crisis-10-ways-solve-rowan-moore-general-election

What planet are they on? What sort of wage growth would be required to hit affordable housing with flat pricing?

What would that wage growth mean for economic competitiveness in a world where there's 1.4 euros to a pound?

Financially illiterate drivel, or softening up the boomers for "build to crash" under Labour?

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"In Accrington, Lancashire, a two-bedroom house might be worth £40,000, which is less than it would cost to refurbish and repair it. This means that it is not worth the owners – often absentee landlords – investing in their maintenance. Roofs leak, mould grows on walls, condensation forms and heating bills rise in poorly insulated buildings."

Why not just cut your losses and flog it to a local family? Are they desperately waiting it out until the house doubles in value ? :lol:

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0% in once sense appeals because you avoid a potential bank bailout, however for that to work you need wage growth to catch up with house prices but this is the problem if wages go up the madness of the crowd kicks in again and so will prices.

If they could get prices stagnate I'm sure they'd go for that as everyone gets to keep the "wealth".

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Another reason is that inflation in housing – so taboo when it comes to other commodities – has since the 1980s been celebrated by governments and encouraged by policies on taxation and borrowing.

No it hasn't always been celebrated like that.

In the 80s the house price inflation issue was continually reported as a bad thing diverting "investment" into housing at the expense of the rest of the economy, similarly the 90s and they even did away with MIRAS.

Even The Economic Devastator said things like there would/should be "No More House Price Boom And Bust" and at one point people actually believed him and voted for that sort of policy.

There's an election in the offing and they're going to do something about house prices and housing. Yet again - what a surprise. Strange that they've been pumping house prices right upto the general election.

They've been claiming similar things for decades and of course it's to be hoped they mean it this time. Don't hold your breath though on the LibLabCon's past performance.

.

Edited by billybong

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A 0% HPI target is part of the solution...

http://www.theguardian.com/society/2015/mar/14/britain-housing-crisis-10-ways-solve-rowan-moore-general-election

What planet are they on? What sort of wage growth would be required to hit affordable housing with flat pricing?

What would that wage growth mean for economic competitiveness in a world where there's 1.4 euros to a pound?

Financially illiterate drivel, or softening up the boomers for "build to crash" under Labour?

It goes up, or it goes down, so yes a tad optimistic.

But you are entirely missing the major point. This is the broadsheets giving hpi both barrels, smashing up the myths, pointing out the idiocies.

If you want change it starts with the electorate - thank you women of Solihull - then moves into the media. Its just one article but we're already light years further ahead than I thought we'd be.

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Prop up the housing pyramid at all costs, says the guardian.

That's how I read that headline.

Smash up the housing pyramid at all costs is how I read it. But tell the sheeple we can do it without hurting them.

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The most obvious cause of Britain’s housing is the simple operation of supply and demand. The country’s population is increasing, and we like to live in smaller units than in the past.

No mention of the impact of credit let alone Liar Loans of course - and they typically don't include moderating population growth in their solutions.

As for "we like to live in smaller units than in the past" that's just plain laughable as if "we" have a choice in the matter these days. No choice and needs must as they say.

The photos of journalists' properties when they're shown and bragged about in magazines etc doesn't confirm that point at all.

Edited by billybong

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Once it was possible to make a good living running a small business....why many corner newsagents could make money....now very much harder, small business owners are looked down upon, the last resort when all else fails,banks don't support them,councils don't support them,governments don't support them and landlords extract the profits for themselves..... That is why everything has been invested into leveraged property speculation..... Not got that what have we got?

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Surely the fact that the tax take is dropping every year means that property (which cannot be hidden or moved abroad) is ripe for taxing?

Edited by fru-gal

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Once it was possible to make a good living running a small business....why many corner newsagents could make money....now very much harder, small business owners are looked down upon, the last resort when all else fails,banks don't support them,councils don't support them,governments don't support them and landlords extract the profits for themselves..... That is why everything has been invested into leveraged property speculation..... Not got that what have we got?

Plenty - you've got a worthy piece of anti hpi polemic and a good foundation for a more trenchant and technical analysis.

The solutions are a little anaemic, but it definitely does start to aim at the deeper economic issues:

...The crisis damages lives, breaks up families, blights employment prospects, reduces mobility and slows the economy...

...This, you would have thought, would be a gift for any political party. Yet all the main parties’ offerings on the subject are piecemeal, gestural and unambitious...
... people who own property can make more money from sitting on it than by doing a job, while others will never get on the property ladder however hard they strive...
...It’s hard to run a business if your employees find it hard to get a home....people on low and middle incomes are pushed out...The creative and inventive types, currently such a big part of London’s sales pitch to the world, will go too...
... inflation in housing – so taboo when it comes to other commodities – has since the 1980s been celebrated by governments and encouraged by policies on taxation and borrowing...
...A wasteful loop was created, whereby councils now find themselves paying high rents to private landlords, in order to house their homeless in properties that once belonged to the council...
The combined effects of demand, government stimulants and restrictions on supply consistently push house prices above other forms of inflation, making residential property an attractive speculative investment....
...The crisis in house prices is therefore not an act of pure economic fate but constructed and willed by policy over decades....
...Help To Buy which, presented as much-needed assistance to first-time buyers, tend to push up prices further...
...There is a confusion here between the problems of availability and affordability. If the only way to encourage building in larger numbers is to put up prices, this is no help for the people who cannot afford a home....
...money is ...being wasted – on paying housing benefit to private landlords for example, on right-to-buy discounts, and on the profits developers make on publicly owned land....
...House price inflation is an addiction. It is destructive and divisive. It is a tax by the haves on the have-nots, and by the old on the young...
Thatcher’s property-owning democracy has run its course. It is time for a new model.

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No mention of the impact of credit let alone Liar Loans of course - and they typically don't include moderating population growth in their solutions. As for "we like to live in smaller units than in the past" that's just plain laughable as if "we" have a choice in the matter these days. No choice and needs must as they say. The photos of journalists' properties when they're shown and bragged about in magazines etc doesn't confirm that point at all.

I think they're talking about family units there not the houses, as in more single people.

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Surely the fact that the tax take is dropping every year means that property (which cannot be hidden or moved abroad) is ripe for taxing?

One would hope so ,removing the relief on the interest part of the mortgage would be a start

This is a massive advantage for the LL opposed to an OO but i fear it will go the other way if it goes anyway , inline with negative gearing ala Australia (UK`s old MIRA ?)

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0% in once sense appeals because you avoid a potential bank bailout, however for that to work you need wage growth to catch up with house prices but this is the problem if wages go up the madness of the crowd kicks in again and so will prices.

If they could get prices stagnate I'm sure they'd go for that as everyone gets to keep the "wealth".

The more wages increase, the less competitive the UK economy becomes. We can't have a win-win for the BTL crew & mortgage holders in general forever.

I'm giving the UK until 2018. I won't buy before then. If we haven't got back to a half sensible price/income ratio and a functioning economy that favours enterprise over landlordism, I'm going to be looking at emigration.

Wonder what the odds are...

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The more wages increase, the less competitive the UK economy becomes. We can't have a win-win for the BTL crew & mortgage holders in general forever.

I'm giving the UK until 2018. I won't buy before then. If we haven't got back to a half sensible price/income ratio and a functioning economy that favours enterprise over landlordism, I'm going to be looking at emigration.

Wonder what the odds are...

Well, I guess the point is the more house prices increase the less competitive the UK economy becomes. But the more self-satisfied a property-owner individually becomes compared to the renters next door...

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Lets say you somehow managed to magically achieve 0% growth.

That would immediately pull the rug from under an entire generation of BTL landlords who's entire strategy is based around never ending growth in prices.

So they would all sell

So prices would fall

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Lets say you somehow managed to magically achieve 0% growth.

That would immediately pull the rug from under an entire generation of BTL landlords who's entire strategy is based around never ending growth in prices.

So they would all sell

So prices would fall

Exactly..... Owner occupiers do not generally purchase property for capital growth, they buy a home that they can afford to buy with the aim that one day they might own it outright, thus creating your own payrise/pension..... It is the system that wants constant growth, constant growing debt with homes that will never be repaid......savings are no longer valued or required, all they want is your debt....debt is growth is how they sell it, thousands have bought into it.....without the punters it will surely implode in on itself.

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Years back I read that in Barking wages would need to have doubled to "afford" housing without HB.

True. Here are the numbers for my place. It's one of the cheapest 1 bed flats in the (holloway) area and probably one of the cheapest within zone 2, but it's still impossible to live on a single full-time minimum wage. Tax credits currently make up the difference, but if I want to save a deposit, I'd have to move out of London or get a studio room, since under Universal Credit, my savings would render me ineligible for help.

priced-out.jpg

priced-out.jpg

post-34896-0-68222600-1426440574_thumb.jpg

Edited by ManVsRecession

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The btler I know takes the view that as long as he gets his rent its OK as he repays the loan, however, the housing benefit problem will eventually scupper that plan.

Rents will fall when they cut housing benefit which they will do.

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True. Here are the numbers for my place. It's one of the cheapest 1 bed flats in the (holloway) area and probably one of the cheapest within zone 2, but it's still impossible to live on a single full-time minimum wage. Tax credits currently make up the difference, but if I want to save a deposit, I'd have to move out of London or get a studio room, since under Universal Credit, my savings would render my ineligible for help.

Or live in a shared house.

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"In Accrington, Lancashire, a two-bedroom house might be worth £40,000, which is less than it would cost to refurbish and repair it. This means that it is not worth the owners – often absentee landlords – investing in their maintenance. Roofs leak, mould grows on walls, condensation forms and heating bills rise in poorly insulated buildings."

Perhaps if house prices were lower (and not inflated by cheap credit), builders wouldn't need to charge so much for their labour to earn a living. Likewise brick-makers and timber merchants etc. etc.

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