My Hpi Letter To My Mp Has Received A Response

[tentboy]

I wrote to my MP on the issue of HPI last week. Well today I have the response. The first letter is the one I sent the other is his reply.

He missed the point of my letter to some extent, and hasn't answered many of the points I raised.

What do you think? I will be sending another letter to the Department of Communities and Local Government.

Dear Mr MP

House Price Inflation

1. I have never felt it necessary to contact my elected Member of Parliament before, but the current situation regarding the housing market has prompted me to write this letter.

2. I am 29 years old, earn above the average wage for the area, have a reasonable level of savings and am debt free. My partner and I would like to put down roots and buy a house in the parish where my partner has always lived and start a family. The cost of housing is prohibitive and we are delaying our family as we feel we should first have the security that home ownership brings, rather than relying on less stable rented accommodation.

3. The building of so called “affordable housing” / “shared ownership” is not the answer. The problem lies much deeper - house prices are artificially high. The lax lending policies of mortgage and secured loan lenders have been encouraged by the current government to facilitate the home owning population to release equity in their homes in order to buy consumables. This has been done just to give the false impression that the economy is thriving. This policy seems floored as people can not continue to get deeper and deeper into debt. Individuals will reach a level of debt where monthly repayments become difficult to meet. When this happens high street spending will decrease. I believe we are starting to see this happen. I feel the current government have failed a generation to have let and encourage this to have gone on for so long. People so desperate to gain a foothold on the property ladder have even falsified their applications in order to get on the ladder before they “miss the boat”. With these policies I would be able to secure a mortgage on a property in the area, but this would be at a much greater income multiple than would have been acceptable in the past. While the repayments would be affordable at the current rate of interest, if there were to be a rise in rates the loan would become difficult to service. As you are aware interest rates are at a near historical low with the average interest rate nearer to 6% than 4%, it would be risky to say the least relying on low interest rates for affordability over the 25 year term of a mortgage, recent inflation has felt significantly higher than the official figures indicate and rumours of massaging the inflationary basket are becoming widespread amongst my generation.

4. There are winners and losers in any situation, and if I were of my parents’ generation I doubt I would have cause to trouble you. I would have been able to take advantage of the situation as I would have already had a home and been able to remortgage my house to buy a second home or invested the money in a “buy to let” property as so many have. But this has further increased the difficulties for mine and younger generations. We are left paying for our parents’ good times. Not only do we have the prospect of working for longer, but we cannot put money into a pension when we can not even buy a home, or if we do we will be saddled with such a huge loan that it would totally restrict our next 25 years and even then the next rung of the ladder would still be out of reach.

5. My situation is not unique and will be echoed by many of your constituents of my generation, some will be in a far worse position as they will have bought in (quite literally) to the consumer ideal so enthusiastically endorsed by the government. I would ask that you take these issues forward; raising the profile of the difficulties the current government have given to the people of Britain. House price inflation does not benefit anyone in the long term as the very same “good time” parents will inevitably have to pay towards their first time buying offspring’s house purchase.

Yours sincerely

Dear Mr Tentboy

Thank you for your letter of 14th June about house price inflation. One of the biggest challenges facing this country is the fact that so many young people cannot afford to buy a home.

It is vital that the barriers to home ownership are brought down and families and individuals are given the scope to fulfil their aspirations of having a place of their own. Unfortunately, the trends seem to be going in the opposite direction at the moment: the number of first-time buyers in 2005 was the lowest since 1980; the typical first-time buyer is now unable to afford a semi-detached property in 87 per cent of towns in this country; in the last 10 years, the typical deposit for a first-time buyer has increased from £5000 to £24000.

A sensible approach is needed to help more people onto the housing ladder – there is no easy, “quick fix” solution. More homes which are suitable for first-time buyers must be built to high environmental standards with greater power for communities to decide where they will be built. Not only is this an opportunity to provide the homes that we need, but also a chance to revitalise our towns and cities. We should provide a new model of “near-city” living, revitalising run-down suburban communities and providing homes in places where people would like to live with vital infrastructure already in place.

Shared ownership schemes should be made more flexible and accessible to a greater number of people. Such schemes could be an extremely valuable way of helping people into home-ownership. At present, however, they are only open to a small number of people, most of them public sector workers. Even those people who are eligible are finding the scheme too restrictive, leading to one third of all the homes built in London and the South East under the “key worker” scheme lying empty. Shared ownership opportunities should be extended to more people.

We must also ensure that people in social housing have opportunities to more into home ownership. The Right to Buy has helped over 1.5 million council tenants to own their own home, and I believe that we should continue to help people in housing association and council properties to gain a stake in their homes, as a step towards the long-term goal of full home-ownership.

Let me assure you that the Conservative Party is making wider and more accessible home ownership a priority, and is devoting in-depth, long-term consideration to how we can best achieve this.

I am writing to the minister for Housing and Planning at the newly formed Department for Communities and Local Government, drawing her attention to the issues raised in your letter, and I will write to you again when I have received her response.

[drhewitt]

Hi, that was a really good letter.

I am also 29 and my wife and I want to move back to England next year, but it seems the more we save for our deposit, the less it's worth by the time we finally move over.

I hope your MP does what he says.

[Tester]

Your MP is pushing schemes that prop up the market whilst not addressing the real issue.

A speculative Buy to Let frenzy has given some investors a highly geared multiple property portfolio. That frenzy, on the back of low interest rates, has driven prices up. The solution is simple. Make BTL less attractive. Remove the stimulus for a cascading property empire:

1. Remove tax relief on mortgage interest payments.

2. Methods are introduced that ensure the Inland Revenue knows who is a landlord.

If you want a focused campaign/message then that is it.

[OnlyMe]

My Hpi Letter To My Mp Has Received A Response, Interesting views on current problems with housing

A poor one at that - buy half a house instead. Stunning stupidity, the schemes are already a failure.

[Casual Observer]

Your MP is pushing schemes that prop up the market whilst not addressing the real issue.

A speculative Buy to Let frenzy has given some investors a highly geared multiple property portfolio. That frenzy, on the back of low interest rates, has driven prices up. The solution is simple. Make BTL less attractive. Remove the stimulus for a cascading property empire:

1. Remove tax relief on mortgage interest payments.

2. Methods are introduced that ensure the Inland Revenue knows who is a landlord.

If you want a focused campaign/message then that is it.

I agree completely. The MP has completely missed the point, which is tht FTBs need prices of existing stock to be lower.

[heather5]

I agree too - he/she has missed the point.

And also confirms what I feared - that this govt pushed shared-ownership to prop up the market and conservatives are going to exactly the same only worse - by widening the scope - which I understand already is happening - and sometime in the Autumn the building societies will start offering their own "shared-ownership" schemes.

They are all going for keep it up.

But yeah, solution is to get at the BTL market - I'm fed-up with the number of people doing this - including my bro and my landlady - buying them up like sweeties because they can.

Could you write another letter in reply on this topic.

[Jason]

I do think the MP has missed the point.

To be honest, if someone is happy to to part own part rent a home, why not just fully rent it, or fully own it. If they say they can't afford to fully own it, it is highly likely they can't afford to fully rent it either.

The only way the conservaties could help the young generation is to increase tax on 2nd homes (council tax), and encourage more building.

[boom_and_bust]

Hi,

The MP has not missed the point. He does not want to acknowledge the point. Many, many people in the UK own homes, many have done very well (on paper) and they are the politically strong. FTB's are the marginal voters in most respects to politicians, as long as NuLab are prepared to keep the cheap cash and public spending flowing and a major external shock does not occur, they will maintain the same course. If he was to take serious action, he would lose more voters than he gains. Don't get me wrong, I think the UK plc is headed for a major fall at some point with the current course of action, it could be anytime given the precarious position of public and private debt in this nation. The rate cut before the last election was not merited for any reason whatsoever except to woo voters. I just don't think politicians will have have any interest for the mess Labour are inflicting on the UK economy until it becomes a vote winning policy.

Edited June 22, 2006 by boom_and_bust

[tentboy]

Thanks all for the feed back.

Yes… the point of my letter was missed by the MP, but in fairness on rereading my original letter I feel that perhaps I am somewhat to blame. I seem to have got into a bit of a rant and probably covered too many points which clouded the issue.

I do get the impression from the MP reply that it was a stock answer; and that has left me without much love towards him, even though his signature does appear to have a kiss at the end of it (no joke)?

It seems to me that BTL has been the HPI catalyst during the current boom.

A distinct problem is perhaps the VI, which most MP’s are.

My next letter will certainly be more succinct. I will also say that Houses should be homes and not investments. Property bought for anything other than “owner occupier” should be subject to large taxation.

[brassfarthing]

A distinct problem is perhaps the VI, which most MP’s are.

Not sure what you mean by that.

An MP's primary vested interest is surely his/her electorate, of which you are an important part.

I may not agree with you on everything but (without wanting to sound patronising) well done on engaging your MP directly on the issue. A lot of people, including me, grumble about 'things' and about politics and politicians, but few of us actually lock horns with them.

I heard a politician say recently: "People look up to MPs too much. People forget that they employ MPs. It's not the other way round".

Too true.

[tentboy]

Not sure what you mean by that.

An MP's primary vested interest is surely his/her electorate, of which you are an important part.

The point I was trying to make was that MP’s have the trappings their job / position provides.

Without wishing to generalise: I expect some MP’s have made money from property at some point during their careers, they are after all provided with accommodation and/or an allowance for housing. Gaining a foot hold on the ladder is not an issue most can relate too to any significant degree. I think the response I got sums it up:

‘Can’t get on the house ladder dear o dear, we must have more shared ownership… We must have more council houses to sell to council tenants’.

Neither of the above would solve the problems we have today, and neither are relevant to me and shouldn’t have been in his response - but they are seen by MP’s as the stock answer to give to us lower class non home owners. I sold to move in Sept 04 and selling was a conscious choice. I had owned the house with my Girlfriend; we split up and split the proceeds. I have banked the cash and I rent a lovely little place in the country, but which I could never afford to buy.

Again without wishing to generalise: roaring HPI is seen as vote winner as home owners get a feel good factor. And let’s face it there are loads more of them (home owners) than us. And this is a democracy.

If I were an MP I’d be looking for roaring HPI and affordable housing it must be a “win win” situation. But of course it can never happen which is why the affordable ownership schemes on offer will never work.

[Pluto]

Your MP, like all MPs, are only concerned with what the voters want.

The only way to get change is to vote for a candidate who will push for housing to be used as family homes and not a vehicle for speculation. The only other way is to have mass protests in the streets.

Writing nice cozy letters is only going to acheive a nice cozy reply.

Speculation is what is driving the price of housing up. The cost of housing has became detached from fundamentals which are: earnings to price ratio.

Elected officials can drive speculation away from housing by:

+ Increase the cost of borrowing money to speculators;

+ Increase taxation on profits;

+ Decrease taxation on other forms of investment.

[Marina]

Sorry kids - you're going to have to do a bit more than write a letter to your MP.

What if 20 or 30 of you turned up to a MP's surgery with a few placards and got your point across face to face? It would have a lot more effect. When he talks to the secretary of state he would be properly informed and would be able to say 'you do realise young people are getting ANGRY about this'.

I know I am going to get called an @rse for asking this - but this is a question for the person who wrote that letter. The standards of modern education fascinate me - and I often get told that people type any old how in a forum - but do you know the difference between the use of the word 'floored' and 'flawed'?

[tentboy]

do you know the difference between the use of the word 'floored' and 'flawed'?

Tank you for reading my post, and yse.

It's not an education issue more of a cognitive one. I have moments when I know the word I want but can’t see it. I also have times when all is clear. Fatigue has a lot to do with it.

I think some people call it stupidity, I know it’s there and do every thing I can to suppress it but sometimes it gets out.

But thank you for pointing it out

[DoubleBubbleTrouble]

Can you tell us who your MP is?

Can we publish your letters?

DBT.

[Pluto]

Sorry kids - you're going to have to do a bit more than write a letter to your MP.

What if 20 or 30 of you turned up to a MP's surgery with a few placards and got your point across face to face? It would have a lot more effect. When he talks to the secretary of state he would be properly informed and would be able to say 'you do realise young people are getting ANGRY about this'.

I know I am going to get called an @rse for asking this - but this is a question for the person who wrote that letter. The standards of modern education fascinate me - and I often get told that people type any old how in a forum - but do you know the difference between the use of the word 'floored' and 'flawed'?

The the young folk of this island are doing the right thing. They are not buying into this pyramid scheme. FTB's are way down.

In the USA the speculators are deserting property like rats on a sinking ship. The band is still playing of course.

Very soon those who saved in the US will be rewarded. In my local newspaper there are lots of properties coming up for auction with a starting bid of 20K USD (about 12K GBP). There is even an article telling folk not to give their houses away for nothing (new owner pays the mortgage) and sell them at auctions instead. All this was the result of 16 non stop rate hikes.

Edited June 22, 2006 by Pluto

[HousePriceLottery]

The the young folk of this island are doing the right thing. They are not buying into this pyramid scheme. FTB's are way down.

In the USA the speculators are deserting property like rats on a sinking ship. The band is still playing of course.

Very soon those who saved in the US will be rewarded. In my local newspaper there are lots of properties coming up for auction with a starting bid of 20K USD (about 12K GBP). There is even an article telling folk not to give their houses away for nothing (new owner pays the mortgage) and sell them at auctions instead. All this was the result of 16 non stop rate hikes.

You make it sound like a concious and thought out decision. If it were it would have happened 3 or 4 years ago.

In reality it is simply no one can afford it anymore. Pure and simple.

If it weren't for BTL and the acres of money the mortgage providers were throwing at them this pyramid scheme would have collapsed a long time ago. Yet the money comes...

Time to fight against the money... see the sig...

[Realistbear]

I am writing to my MP, John Maples, C Stratford, to suggest a few policies that would have some bite in relation to the HPI-MEW crisis:

1. Remove all tax incentives from multiple home ownership and add a 20% council tax surcharge on all but the principle residence. The surcharge monies to be paid into a separate fund to pay for development of land for building more homes.

2. To empower the FSA to prosecute lenders and borrowers who permit/submit false data for the purposes of obtaining a loan. This is already covered under the Theft Act: Obtaining a Pecuniary Advantage by Deception.

3. To introduce CGT at 40% on all properties including principle residences that are sold within 24 months of purchase unless the property is sold due to death/health issues, a job move, or emigration.

4. To restrict irresponsible lending by establishing reasonable multiples not to exceed 3.5 times gross income. Any lenders who exceed the multiples shall have no recourse to any amounts that exceed the multiple allowed by law if the borrower defaults in repaying the loan.

5. To prohibit all advertising for loans unless the advertisement includes clear and prominent "health" warnings relating to debt, bankruptcy and other consequences of irresponsible borrowing. To introduce "Shylock Laws" limiting the amount of interest payable on any loan to three times the current base rate. Same rules apply as under 4. for an Shylock loans that exceed the statutory limit.

6. To regulate the Estate Agent industry by setting up a body along the lines of Realtors in the United States who must be licensed and bonded to do business. To introduce a set of guildelins to ensure Eastate Agents conduct business ethically. E.g:

A. Forbidding the practice of placing misleading "Sold" signs before contracts are exchanged.

B. Forbidding the dissemination of any data that is false with the intention to mislead or induce the purchase of property. Price "surveys" must relate to actual data as evidenced by completed transactions that have occured in any given time period. Any other price surveys must be clearly designated as based on hypothetical asking prices which may or may not reprsent the actual price a property has sold for.

[surfcat]

his signature does appear to have a kiss at the end of it (no joke)?

Perhaps he got your name mixed up and thought you were Mr Rentboy?

[tinecu]

I am writing to my MP, John Maples, C Stratford, to suggest a few policies that would have some bite in relation to the HPI-MEW crisis:

1. Remove all tax incentives from multiple home ownership and add a 20% council tax surcharge on all but the principle residence. The surcharge monies to be paid into a separate fund to pay for development of land for building more homes.

2. To empower the FSA to prosecute lenders and borrowers who permit/submit false data for the purposes of obtaining a loan. This is already covered under the Theft Act: Obtaining a Pecuniary Advantage by Deception.

3. To introduce CGT at 40% on all properties including principle residences that are sold within 24 months of purchase unless the property is sold due to death/health issues, a job move, or emigration.

4. To restrict irresponsible lending by establishing reasonable multiples not to exceed 3.5 times gross income. Any lenders who exceed the multiples shall have no recourse to any amounts that exceed the multiple allowed by law if the borrower defaults in repaying the loan.

5. To prohibit all advertising for loans unless the advertisement includes clear and prominent "health" warnings relating to debt, bankruptcy and other consequences of irresponsible borrowing. To introduce "Shylock Laws" limiting the amount of interest payable on any loan to three times the current base rate. Same rules apply as under 4. for an Shylock loans that exceed the statutory limit.

6. To regulate the Estate Agent industry by setting up a body along the lines of Realtors in the United States who must be licensed and bonded to do business. To introduce a set of guildelins to ensure Eastate Agents conduct business ethically. E.g:

A. Forbidding the practice of placing misleading "Sold" signs before contracts are exchanged.

B. Forbidding the dissemination of any data that is false with the intention to mislead or induce the purchase of property. Price "surveys" must relate to actual data as evidenced by completed transactions that have occured in any given time period. Any other price surveys must be clearly designated as based on hypothetical asking prices which may or may not reprsent the actual price a property has sold for.

Here, here! No.1 will probably sort out most housing problems alone.

[zag2me]

So your complaining about not being able to afford a house, but your also complaining about shared ownership?

A house is somewhere to live, not an investement. Shared ownership is a great scheme for letting first time buyers get on the housing ladder, dont knock it.

It might not be suitable for everyone but dont complain about it.

[Golden Shower]

I can't imagine any serious MP is going to try reduce the value of existing stock. The Tories have been doing quite a lot recently to reassure the public that if they get in, IRs won't shoot up and HPI down.

Not too sure about the 20% council tax surcharge either. If someone can afford a second home, they can probably afford a 20% hike in council tax.

[simon99]

They're not interested in housing becoming cheaper. The biggest barrier to homeownership is the price. Are they interested in bringing that down? No. Why do you think they all back shared ownership? They will just try and fob you off. It's trying to throw young people a bone whilst propping house prices up. They're pathetic.

Edited June 23, 2006 by simon99

[Realistbear]

They're not interested in housing becoming cheaper. The biggest barrier to homeownership is the price. Are they interested in bringing that down? No. Why do you think they all back shared ownership? They will just try and fob you off. It's trying to throw young people a bone whilst propping house prices up. They're pathetic.

Probably true. Everyone who owns a house in the UK is a VI. More than 50% of the population?

Then its time for a new party to be formed. Mervyn King for PM?

[kuurus]

It may have been a tad more impressive without the spelling mistakes, for example, 'flawed', not 'floored'. May be nitpicking but if you are trying to appear knowledgeable and are giving an MP a ticking off then a failure in the spelling department can deflate your gravitas somewhat.