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Father Fred

Poll: House Price Boom, Inevitable Or Preventable

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If you're answering B then what should have been done, when and by whom?

Mortgage lending should have regulated much sooner, for both personal and BTL mortgages, and should include enforced limits on available lending. The limits should take account of the level of debt a person can obtain in the wider context of the effects on house prices, the economy and the social implications, not just on the basis of whether a person can service that level of debt.

Housebuilding should have been targeted much sooner, not allowing it to slide to the lowest levels since WW2. Home building policy should aim to keep the housing market stable rather than being a soviet style command economy controlled by the government on political whim.

Edited by DoubleBubbleTrouble

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HPI should have been included in the CPI so as the bubble started to inflate the figures would have increased core inflation and rates would have gone up sooner thus keeping HPI to a sustainable level.

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HPI should have been included in the CPI so as the bubble started to inflate the figures would have increased core inflation and rates would have gone up sooner thus keeping HPI to a sustainable level.

Absolutely agree!!! Got pissed off that John Prescott went on about house prices being disgusting when they were at £100K average. They did absolutely feck all about it. In fact, John Prescott does absolutely FECK ALL <PERIOD>.

TB

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Excellent question, and a good antidote to the all-too-vague anti-government moaning on the board.

If you think the government have mishandled the housing market, let's hear what you would have done about it.

I agree with DoubleBubbleTrouble, the top two issues are the regulation of mortgage lending and planning reform.

If you agree with this and want to do something about it, have a look at www.pricedout.org.uk.

frugalista

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HPI should have been included in the CPI so as the bubble started to inflate the figures would have increased core inflation and rates would have gone up sooner thus keeping HPI to a sustainable level.

Agreed

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Excellent question, and a good antidote to the all-too-vague anti-government moaning on the board.

If you think the government have mishandled the housing market, let's hear what you would have done about it.

I agree with DoubleBubbleTrouble, the top two issues are the regulation of mortgage lending and planning reform.

If you agree with this and want to do something about it, have a look at www.pricedout.org.uk.

frugalista

  • REGULATE THE INDUSTRY!

    Punish all the people committing FRAUD

    Put pressure on the BANKS to stick to SENSIBLE LENDING

    Not promote the BTL Mortgage which has thrived under GB!

    STOP giving tax breaks to second home owners

    Give every credit going FAMILY CREDIT, TAX CREDIT - what next SMOKERS CREDIT? They could have made it easier for FTBs but they didnt - High House Prices allowed them to UP your council tax also. THEY IGNORED IT BECAUSE THEY GAINED FROM IT!

    Make land more affordable - The governments LAND prices are a LARGE factor to HPI! They are a VI, and a large one at that!

    STOP COOKING THE BOOKS on CPI. If the true rate of inflation 7-8% was published the IR's would have rose years ago! SO I POINT THE FINGER DIRECTLY AT THE GOVERNMENT!

shall I go on.......

Its not Government Bashing.. they are to blame. Especially over the CPI thing. They have LIED to us for years and I challenge anyone to prove to me that inflation is around 2%!

Im surprised Prostitutes are not on the CPI.. coz they always GO DOWN!!!

TB

Edited by teddyboy

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I voted B, and I agree with everything teddyboy says, though I think inflation is nearer 15% – it certainly is in terms of my living costs. So, basically, everything teddyboy says, plus they should have made the traditional lending multiples of 3.5 times salary for singles and 2.5 times for couples the law. People argue that these mutiples are irellevant now because higher repayments are 'affordable', but surly these multiples are more pertinant now than ever as they prevent people taking on debt, when interest rates are low and bigger loans are affordable, that they won't be able to afford to repay if interest rates go up.

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If you're answering B then what should have been done, when and by whom?

I answered B.

Looking at some stats I noticed that the level of housebuilding has been going down for a long time.... not being caused by a larger population (low birth rate + reasonable immigration [no I don't read the daily mail :lol: ]).

Sprite_6.jpg

Building more houses (not shoeboxes either!) would have really helped cool the market. But obviously they wanted to stoke the market not cool it.

I think that we have 2 different booms going on at once:

1) Normal upward boom-bust cycle in housing market

2) People investing in market as their pension

I think levels of demand from normal buyers (ie FTBs that don't need a lobotomy) seemed to dry up 2002-2003 at the latest, and the slack was taken up by huge numbers of 'investors'.

Therefore we'll most likely see two bubbles unwind in rapid succession. Probably 1) will start first and kick off 2).

As to who to blame.... so many people... so little space:

1) Gordon Brown - Lies about CPI and destroys economy with low IRs

2) Bliar - For letting Brown do it

3) BoE - for letting Brown do it

4) FSA and other regulators - for not stopping profligate and irresponsible lending

I don't actually blame EAs, BTLers etc. Everyone else is just making the best of the market as they see it.

The carry trade and artificially low IRs have stoked a huge spending boom, and it should have been nipped in the bud by GB or one of the above.

post-692-1148368159.jpg

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I answered B.

My solution to this problem would have been to pass a law that absolves mortgage defaulters of liability in certain circumstances.

Where a borrower defaults, the lender would have to prove that they took reasonble steps to ensure that the borrower had the means to service the mortgage. They would also have to be demonstrate that they had warned the borrower if the price being paid was above a fair market value.

I would also make it ilegal for borrowers to ask questions about default history on applications (if the fault was deemed to have lain with the lender).

These measures would stop lenders from colluding with other vested interests as so often happens today. For example, if the local building society manager had a cosy deal with a local builder, he could find his company liable should any borrowers end up defaulting. It would also stop building societies from pretending to look the other way when unrealistic applications for mortgages are made.

Today, the borrower picks up nearly all the risk. The purpose of this law would be to shift some of this burden towards the lender.

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Chancellor's who believe in miracles need to be reigned in because HPI and consequential MEW is an obvious recipe to feed a boom and bust culture. The Chinese are taking action to prevent HPI from getting out of control by using selective taxation--a good idea as it benefits the majority at the expense of the speculators. If you want to speculate, go play on the stock market or the FOREX and leave houses alone!

What could have been done?

1. Tax Second Homes.

2. No Council Tax relief for second homes

3. CGT for flipping at punitive rates of taxation (minimum 3 year hold with exemptions for health reasons or need to move due to employment requiremetnts).

4. Lending controlled to dissallow high multiples and "creative" (rip-off) financing such as IO or baloon payments.

5. No BTL if a housing shortgage exists.

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FF,

Property in London was very underpriced when we bought (the other one).

I dont see that its overpriced now - as you know there are still reasonably priced places to be had especially if you are buying to actually live in it. Although they are in the less salubrious parts of town.

In terms of BTL, its different, not enough room now to have a decent cash-flow that compensates for the hassle. Why take a risk with your own cash to fund the governments social housing budget?

Besides the economy as a whole is taking a turn....it'll dip for a few years but it aint armageddon.

I'm pretty sure the East end has plenty of upside left...but it'll be over a number of years.

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FF,

Property in London was very underpriced when we bought (the other one).

I dont see that its overpriced now - as you know there are still reasonably priced places to be had especially if you are buying to actually live in it. Although they are in the less salubrious parts of town.

In terms of BTL, its different, not enough room now to have a decent cash-flow that compensates for the sure the East end has plenty of upside left...but it'll be over a number of years.

[/quohassle. Why take a risk with your own cash to fund the governments social housing budget?

Besides the economy as a whole is taking a turn....it'll dip for a few years but it aint armageddon.

I'm pretty te]

You are deluding yourself. Properties in London are wildly overpriced and have been so for more than 15 years.

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Mortgage lending should have regulated much sooner, for both personal and BTL mortgages, and should include enforced limits on available lending. The limits should take account of the level of debt a person can obtain in the wider context of the effects on house prices, the economy and the social implications, not just on the basis of whether a person can service that level of debt.

I think that limits on debt should be enforced by making a debt due to "reckless lending" unenforceable. The government should publish clear guidelines concerning what is a reckless debt. When banks and other lenders try to forclose on a mortgage, or sue for repayment of a debt, courts should be instructed to discharge the debt if the lending is reckless.

Reckless debts should include debts over and above people's ability to pay, with clear affordability guidelines. Lenders should have to exercise sufficient care in establishing a borrowers' ability to pay, so turning a blind eye to self-cert mortgages would be out. Debts where the lender did not show sufficient care in finding out what other debts a borrower has at the time of application would also be considered reckless lending.

Where the borrower has undertaken a sufficiently sophisticated fraud to obtain a loan, including mortgages, then the lender should still be able to recover the debt.

Billy Shears

5. No BTL if a housing shortgage exists.

AST tenants to have the right to buy the home they live in at a "reasonable" price, with a system set up to mediate and make binding decisions when the landlord and tenant do not agree on the reasonable price.

This one isn't serious unlike my suggestion on making reckless lending unenforceable. There would be too many side-effects on giving private tenants a right to buy.

Billy Shears

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If it were not for the froth in the market caused by the BTL component, I'm sure we would have had the correction by now.

I think that the correct respsonse is to increase the regulatory burden on landlords, and make AST agreements open-ended by removing the landlord's ability to terminate the agreement without the tenant's consent. Banks only started lending for BTLs once the AST regime was introduced in the 80s. Before that if the owner defaulted they may have got the keys to the house but also got sitting tenants they couldn't chuck out.

The AST is completely one-sided in favouring the rights of landlords over tenants and has distorted the housing market by encouraging many thousands of undercapitalised ignorant amateurs to become landlords. The provision of housing, a social good, is too important to be left in the hands of these numpties.

The neglect of social housing since the early 80s is also criminal. The right to buy has been a disaster by removing houses from public stock much faster than they have been replaced. A return to an era of plentiful social housing (as in the 1970s) would mean that low earners could have their own homes and large parts of the country would not be so dependent on migrant labour to fill the poorly paid jobs.

No government has treated housing seriously since the mind 70s. Thanks to the rise of the BNP this may now change.

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To those who vote B

The Government and BoE have intervened, to amplify the 'worst' aspects of the cycle, through fiddled CPI stats and ultra-low IRs

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  • 301 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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