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penbat1

Catch 22 For Gordon Brown On Housing

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Gordon Brown has said that it is his top priority to make UK housing affordable by various measures, primarily by building many more houses. If he should actually succeed in making UK housing affordable (something like 50% cheaper I would guess would be necessary to make housing relatively affordable), he would plunge all existing home owners into massive negative equity and potential financial ruin. :rolleyes:

So the damage has already been done and can't be undone. Gordon Brown was part of the administration that did the damage in the first place and the problem is now unsolvable.

Edited by penbat1

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Indeed! If a responsible government came to power it's difficult to see what they could do.

I think New Labour realised we're all f*cked a few years ago. Remember when GB tried to introduce 25yr fixed-rate mortgages 5-6 years ago? He was basically trying to lock everyone into low rates so that when the rates had to go up they would be protected. But, it never happened. And now we're in the parlous state that a lot of homeowners couldn't even afford a fixed rate mortgage - they're usually a couple of percent over SVR at the outset.

But I'd be very interested, what would all the clever HPCers do if they were chancellor? How would you let the bubble down gently?

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Indeed! If a responsible government came to power it's difficult to see what they could do.

I think New Labour realised we're all f*cked a few years ago. Remember when GB tried to introduce 25yr fixed-rate mortgages 5-6 years ago? He was basically trying to lock everyone into low rates so that when the rates had to go up they would be protected. But, it never happened. And now we're in the parlous state that a lot of homeowners couldn't even afford a fixed rate mortgage - they're usually a couple of percent over SVR at the outset.

But I'd be very interested, what would all the clever HPCers do if they were chancellor? How would you let the bubble down gently?

Fit a valve to it and squeeze it when people are asleep that way no one will notice as its going down.

Seriously - the situation is out of control you cannot undo what has been done without upsetting the majority - hence the reason for BG's ridiculous 3m houses by 2020 - he knows its just spin, we know its just spin - but the majority of people including many jurnos and newspaper, as we well know just report the statement - they don't actually question it. So as far as most people are concerned the governement have a plan - done deal - another political incident dealt with - next!!!.

HAL

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Besides which, he's only in 'power' for another 2 years or so...

Not that he's in power anyway.

The banks have been the 'powers that be' for centuries.

So by your logic "the banks" put him in power then? So he is in power then?

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GB is back banging the 25 year fixed mortgage drum. Link

He first mooted it in his 2003 buget speech, and I seem to recall leaks in the press that the Labour high command was "very worried" about house prices a couple of years before that, 1999 in fact.

Maybe the way ahead is to get existing home owners onto 25yr fixed at 6% or so, then let IRs rip to deal with inflation and make homes affordable for young people. There'd be hellish negative equity but not many repossessions - which are the real problem. But.... how does he persuade lenders to offer affordable 25yr fixes when they know IRs are going up in the future?

I live in fear that a taxpayer bailout will be on the cards. :angry:

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I don't get GB... Making debt easier to get into for FTBs (affordable 25 year fixed) will just pour more petrol onto the free credit fire that was just about to subside. This will push prices even higher...

The sad thing is... The only way out is the opposite - to continue tightening the credit. While building a heck of a lot more.

And finally make housing UNATTRACTIVE as investment.

Edited by refusnik

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Yes, ask the banks to find it in there hearts to let off a nation they have gone to so much trouble

entrapping into debt slavery, that'll work.

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Exactly.

Ding Ding. No change.

The most amusing thing I think this last fornight was the accompanying book to the Global Warming Scam concert that was Live Earth.

Written by none other than David de Rothschild, heir to the British wing of our real controlling elite.

You just couldn't make it up. Well you could. They did.

http://www.spiked-online.com/index.php?/site/article/3569/

Edited by Bushy Tail

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Maybe he (Brown) is talking so much about affordable housing because he knows its all going down soon. Trying to spin some positives out of the comming recession.

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I don't get GB... Making debt easier to get into for FTBs (affordable 25 year fixed) will just pour more petrol onto the free credit fire that was just about to subside. This will push prices even higher...

The sad thing is... The only way out is the opposite - to continue tightening the credit. While building a heck of a lot more.

And finally make housing UNATTRACTIVE as investment.

A 25 year fixed rate mortgage won't make credit easier; the rate is likely to be 1 or 2 percent above SVR. The reason GB wants people on fixed rates is because he knows that inflation is coming and with it interest rate hikes. He doesn't want mass repossessions as people default on mortgages they can no longer afford--hence the urgency for fixed rates. With fixed rates house prices can be allowed to fall. Negative equity is a problem that can be dealt with: in GC1 (as RealistBear would call it) people were allowed to move and carry their negative equity on to the new house. It's a bummer but it's not the end of the world, unlike soaring mortgage rates which would be (for GB anyway.)

My solution to the whole situation would be....

  • Build more houses, family homes, on brown field sites.

  • Disallow BTLers reclaiming tax on their costs.

  • Bring back MIRAS for owner occupiers only, at a sensible rate, eg £100K.

  • Deport all illegal immigrants, all asylum seekers, all legal immigrants who break the law and the Eastern Europeans.

  • Promote fixed-for-life mortgages because base rates are going up!

  • Make any arrangements necessary so that negative equity can be carried from house to house. Lenders aren't going to like this, but it has to happen.

The combination of building and depopulation should reduce prices through simple supply and demand economics. The tax changes would keep the parasite BTLers at bay so they don't swoop on the newly affordable homes.

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If everybody goes onto a 25 year fixed rate then interest rates will have very little effect on inflation. The main way that interest rates decrease inflation in the homeowning population is by increasing mortgage repayments.

I don't quit understand why people start to default when rates go up by 0.25%. Why don't they just carry on paying exactly what they were paying before the rise and default on the 0.25%?

25 year fixes are good in principle but nobody is going to stay at 6 or 7% if rates go down to 2-4% again. Well, some people would but anybody who wants to pay their mortgage off faster would opt out. Also the mortgages would have to be extremely flexible with no tie ins if you want to sell up, leave the country or have any other reason for wanting out.

Building more houses would only decrease houses by creating an over supply. If there is no supply shortage why not just address the fact that there are lots of empty properties around. Surely even rich landlords can't complain too bitterly if they are forced to let their flats and take an income (god forbid).

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How would I let the bubble down gently?

1. Tackle the BTL/investment home/second home problem.

  • Introduce a new professional qualification for private landlords, equivalent to a one-year, full-time training course or two years part-time. All new BTL landlords would have to have it immediately, and existing ones would have to get it within 10 years. Those amateur BTLers who weren't willing to do this would then sell up gradually over 10 years, rather than all at once.
  • Introduce enhanced rights for tenants - not as gold-plated as the old Rent Act system, but better than assured shorthold tenancies. This would only allow landlords to evict (non-problem) tenants at five-year intervals, restrict rent increases to RPI and impose energy efficiency specs on rental properties.
  • Allow local authorities to impose unlimited council tax on properties which are unoccupied for eight weeks or more, or which are not the owner's principal residence.

2. Immigration

  • Impose quotas on the number of immigrant workers allowed to work in the UK, calculated according to the sole criterion of gaps in the indigenous workforce. These would gradually take effect over a 10-year period, giving existing immigrants who did not qualify for a permit under the new scheme time to wind down their affairs and plan their departure.
  • Work permits for immigrants would be issued on a one-, two- or five-year basis, with immigrants being eligible to apply for full residency status only after 10 years of paying tax.
  • Require each and every immigrant entering the UK to live and work to pass a proficiency test in English, equivalent to A-level standard, in their country of origin before coming here.
  • Make it illegal for immigrants on fixed-term permits to have children while in the UK - doing so would mean instant deportation.

3. Population Control

  • Introduce a new criminal offence of conceiving a child without the financial means to support it. This would apply to both the male and female partners, and carry severe penalties.
  • Child benefits, school places etc. would be available for a couple's first two children (the principle being that each human being is allowed to reproduce themselves once) only. If they have any more, they have to support them with private education, healthcare etc. If they can't do so, they're guilty of the offence stated above, and will be required to give the additional children up for adoption.

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How would I let the bubble down gently?

1. Tackle the BTL/investment home/second home problem.

  • Introduce a new professional qualification for private landlords, equivalent to a one-year, full-time training course or two years part-time. All new BTL landlords would have to have it immediately, and existing ones would have to get it within 10 years. Those amateur BTLers who weren't willing to do this would then sell up gradually over 10 years, rather than all at once.

  • Introduce enhanced rights for tenants - not as gold-plated as the old Rent Act system, but better than assured shorthold tenancies. This would only allow landlords to evict (non-problem) tenants at five-year intervals, restrict rent increases to RPI and impose energy efficiency specs on rental properties.

  • Allow local authorities to impose unlimited council tax on properties which are unoccupied for eight weeks or more, or which are not the owner's principal residence.

2. Immigration

  • Impose quotas on the number of immigrant workers allowed to work in the UK, calculated according to the sole criterion of gaps in the indigenous workforce. These would gradually take effect over a 10-year period, giving existing immigrants who did not qualify for a permit under the new scheme time to wind down their affairs and plan their departure.

  • Work permits for immigrants would be issued on a one-, two- or five-year basis, with immigrants being eligible to apply for full residency status only after 10 years of paying tax.

  • Require each and every immigrant entering the UK to live and work to pass a proficiency test in English, equivalent to A-level standard, in their country of origin before coming here.

  • Make it illegal for immigrants on fixed-term permits to have children while in the UK - doing so would mean instant deportation.

3. Population Control

  • Introduce a new criminal offence of conceiving a child without the financial means to support it. This would apply to both the male and female partners, and carry severe penalties.

  • Child benefits, school places etc. would be available for a couple's first two children (the principle being that each human being is allowed to reproduce themselves once) only. If they have any more, they have to support them with private education, healthcare etc. If they can't do so, they're guilty of the offence stated above, and will be required to give the additional children up for adoption.

You are one sick fucxing commie. Not hard to guess who you vote for. Just out of interest how would you severely penalise somebody who has a child without the means to financially support it? Cut their dick off?

Edited by nohpc

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How would I let the bubble down gently?

1. Tackle the BTL/investment home/second home problem.

  • Introduce a new professional qualification for private landlords, equivalent to a one-year, full-time training course or two years part-time. All new BTL landlords would have to have it immediately, and existing ones would have to get it within 10 years. Those amateur BTLers who weren't willing to do this would then sell up gradually over 10 years, rather than all at once.

  • Introduce enhanced rights for tenants - not as gold-plated as the old Rent Act system, but better than assured shorthold tenancies. This would only allow landlords to evict (non-problem) tenants at five-year intervals, restrict rent increases to RPI and impose energy efficiency specs on rental properties.

  • Allow local authorities to impose unlimited council tax on properties which are unoccupied for eight weeks or more, or which are not the owner's principal residence.

2. Immigration

  • Impose quotas on the number of immigrant workers allowed to work in the UK, calculated according to the sole criterion of gaps in the indigenous workforce. These would gradually take effect over a 10-year period, giving existing immigrants who did not qualify for a permit under the new scheme time to wind down their affairs and plan their departure.

  • Work permits for immigrants would be issued on a one-, two- or five-year basis, with immigrants being eligible to apply for full residency status only after 10 years of paying tax.

  • Require each and every immigrant entering the UK to live and work to pass a proficiency test in English, equivalent to A-level standard, in their country of origin before coming here.

  • Make it illegal for immigrants on fixed-term permits to have children while in the UK - doing so would mean instant deportation.

3. Population Control

  • Introduce a new criminal offence of conceiving a child without the financial means to support it. This would apply to both the male and female partners, and carry severe penalties.

  • Child benefits, school places etc. would be available for a couple's first two children (the principle being that each human being is allowed to reproduce themselves once) only. If they have any more, they have to support them with private education, healthcare etc. If they can't do so, they're guilty of the offence stated above, and will be required to give the additional children up for adoption.

Don't apply for membership of the BNP, you're too rightwing!

(Oh, and most of your ideas are rubbish!)

:lol:

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You are one sick fucxing commie.

Wrong, actually: if I was a commie I would be arguing for all forms of private ownership to be illegal. On the contrary, I'm arguing for a series of measures that would actually extend number of people who were able to own their own homes, while requiring the owners of BTL properties to manage them properly.

Just out of interest how would you severely penalise somebody who has a child without the means to financially support it? Cut their dick off?

Several hundred hours of community service (working in a creche or nursery for the children of taxpaying parents would be particularly appropriate) would be my preferred option.

Oh, and Nationalist, if most of my ideas are rubbish why are all but two of them (temporary immigrants not allowed to have children and the new offence) in use in some shape, form or related principle in at least one other developed country in the world)?

Edited by The Ayatollah Bugheri

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Wrong, actually: if I was a commie I would be arguing for all forms of private ownership to be illegal. On the contrary, I'm arguing for a series of measures that would actually extend number of people who were able to own their own homes, while requiring the owners of BTL properties to manage them properly.

Several hundred hours of community service (working in a creche or nursery for the children of taxpaying parents would be particularly appropriate) would be my preferred option.

Lovely. So in your world only rich white people can have kids and if poor people have kids they get punished by giving free child care to rich peoples kids? You are one cruel man.

BTL a 1 year degree? Who would teach it ... inside track? Why exactly would it take a 1 year degree to learn how to do BTL? Maybe just a bit of better financial education in schools would be more appropriate so you don't have too many muppets jumping in.

Basically I thought all your points were a bit ridiculous but it's bed time in Auckland so I'll leave it to somebody else to pick up on them. And feel free to slag back I've become immune to it on this site ;)

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Lovely. So in your world only rich white people can have kids...

No. I my world, a married couple, the combined income of which was around the national average, would be able to afford to have and bring up two children (no more). That couple could be black, white, purple or one of each, just as long as they were either UK citizens or had permanent residency rights. They would be able to do this on a national average income, because I am proposing to deal with the reasons why they cannot at present.

...and if poor people have kids they get punished by giving free child care to rich peoples kids? You are one cruel man.

Again, no. If anyone has kids without the intention and/or ability of supporting them to adulthood, they should be subject to some kind of sanction. Having children is an action which has an impact on the rest of society. It can affect everyone else's quality of life, for better or for worse, depending on how competent the parents are. That is why society is entitled to regulate the process.

BTL a 1 year degree? Who would teach it ... inside track? Why exactly would it take a 1 year degree to learn how to do BTL?

FE colleges or their equivelents would do, with a government-approved curriculum and exam. The course would cover issues such as building maintenance, energy efficiency, housing law, selecting tenants, mediating in disputes between landlord and tenant, dealing with maintenance contractors, letting agencies etc., mediating in disputes between tenants and neighbours, making an intelligent contribution to planning decisions and debates in the area in which a BTL is situated, financial planning to ensure that the property won't get repossessed during the period of the tenancy, etc. etc.

Maybe just a bit of better financial education in schools would be more appropriate so you don't have too many muppets jumping in.

Agreed; but even if we started to do that right now, it would be 20-30 years before anyone currently in school would form part of the BTL landlord workforce.

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Guest Skint Academic

GB is trying to sustain the bubble for as long as possible rather than trying to deflate it or let it expand until it bursts. I've been expecting him to promise all kinds of things this year in preparation for a snap election next year before the HPC becomes a real problem. 3 Million houses is an excellent example of this. He doesn't have to build them as it's a promise to sell out our future and requires no payment now. It sustains the bubble until the election by not spooking the BTL'ers who fear that he may tackle the problem by taxing them, and tries to gain as many youth votes as possible who are in need of housing.

Of course, this doesn't work if it is widely accepted that there isn't a housing shortage but rather an asset bubble due to excessive money supply, speculation and due to people buying second houses that are left empty.

If I were to try and deflate the bubble as gently as possible (if such a thing were possible) I would temporarily remove capital gains tax from BTLs and allow people to sell their assets, but I would tax to the hilt second homes which are left empty. I would make renting a viable option in Britain, as it is in Germany, with increased protection for the tenants (but not for the squatters or people trying to dodge rent). This would also mean that being a landlord had to be viewed more as a profession than as something amateurs could do. And I would sort out the problem that helped start the whole BTL mania ... pensions.

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Oh, and Nationalist, if most of my ideas are rubbish why are all but two of them (temporary immigrants not allowed to have children and the new offence) in use in some shape, form or related principle in at least one other developed country in the world)?

It's mainly all your ideas being phased in over 10 years I don't like. We need solutions now!

Also punishing the child (denial of healthcare and education) for the sins of its parents is rather nasty.

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It's mainly all your ideas being phased in over 10 years I don't like. We need solutions now!

The idea behind a long phase-in is to prevent the significant job losses and negative equity for innocent OOs that would be the inevitable fall-out from an instant and large-scale HPC.

Also punishing the child (denial of healthcare and education) for the sins of its parents is rather nasty.

I don't want to do that, hence my bringing in adoption. At the last figure I knew there was a waiting list of around 80,000 infertile couples wanting to adopt kids, and many more who are only able to have kids after painful and expensive IVF treatment.

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I think Ayatollah has some good ideas.

At points in history it has taken extreme action by smaller goups to eventually get a happy medium passed by government : women's vote, animal rights are two examles. So maybe some of you here think ayatollah's ideas are extreme.

I personally think this country has gone too soft. If anyone today voices an opinion far from the Liberals they're hounded.

I maybe wrong on this but does the USA only allow 1 child to be supported by the state and thereafter no help? The people of France have great spirit to fight their corner and demonstrate when they don't like something. France even refused to let its borders open to the Eastern Europeans, although they will have to eventually.

I personally don't like seeing the 'chavs' and 'neds' reproducing time after time after time with no intention of working, getting housed by the state and having everything paid for. At least if these types worked and couldn't afford to bring up say 3 children maybe then the government could offer help. You might think that Tax Credits does this but this system still causes a lot of people not to be fully responsible for themselves as a chap on this forum had pointed out. He said he ran a business and employed a chap (who was also receiving Tax Credits). The business owner wanted him to do more hours but he said he could not because he'd lose his Tax Credits. It turned out the employee earned more money than the guy that employed him.

I also agree with a lot Ayatollah's immigration ideas.

feefifofum

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[*]Bring back MIRAS for owner occupiers only, at a sensible rate, eg £100K.

No no no no no.

MIRAS supports prices by making taxpayers in rented accomodation subsidise owner occupiers' mortgages.

I am a taxpayer in rented accomodation.

I am not amused.

Luckily Gordon can't afford it. ;)

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