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Sheer Heart Attack

Stopping Hpi For The Future Brings Enormous Benefits

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I think my feelings on the Govt are pretty clear now. I am pro free-market, want a small government and a new libertarianism to return to the nation. IMO, it's the only way we'll get the balance right regarding the relationship between state and subject.

Is it time for a legislative framework to ensure HPI can not happen again? One thing's for sure, it's time to concentrate on the happiness and the wellbeing of citizens when it comes to private housing.

Lending Criteria

1) A legal requirement that buyers must find a 10% deposit on the property they want to buy.

2) A maximum lend of 3.5x salary for individuals and for couples.

3) An end to interest-only mortgages.

4) Most radical suggestion - a switch from monthly mortgages to the type of mortgage current account offered on "One Accounts". This may make far more stark in a person's mind the true level of debt they are in and encourage them to pay off mortgages as early as possible. At the moment, with monthly repayment mortgages, other than knowing the length of time left on a mortgage, does anyone know really how much debt they are in?

5) MEW - is there a case for imposing higher interest rates on MEWs to discourage excess? I know, in reality, many people using MEW do this anyway, particularly in the non-prime sector.

Building Criteria

1) There was an interesting thread on the forum about Housing Associations refusing to buy BTL flats because they did not meet minimum requirements. Perhaps it is time to impose minimum standards to ensure that all these new-build owners have a property that will stand the test of time? We may be heading for the HO's nightmares in Spain and Cyprus of new-builds that no-one will ever buy from you.

2) Incentives for housebuilders to provide the types of property that demographic forecasts are suggesting are needed.

Those are a few off the top of my head.

It would take a generation for these changes to properly work through and would cause some "pain" for HOs like myself who would find their house prices not only set by demand but by imposed lending criteria based on deposit and wages.

In the end though, I think we would all be happier as we had more money to save and spend on ourselves and our loved ones. Any thoughts would be welcome.

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all of the standards already in place are good enough to keep hpi from getting out of control.

making the banks keep the mortgages on their own books would ensure that they actually use those standards.

no matter what criteria that you set up, if the people, and the banks and the government all willingly turn a blind eye to them, there isn't much you can do to stop it.

and since there is no real way to legislate greed out of people, it might be hard to ever quit.

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I think it's kinda interesting that you talk about libertarianism and then suggest a whole list of additional rules and regulations.

Decent renting laws and less planning regulation would do wonders IMO, as would the government making it clear that there would be no bailouts for dodgy banks.

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I think it's kinda interesting that you talk about libertarianism and then suggest a whole list of additional rules and regulations.

I do realise that it is a little contradictory.

However, given the mess it's got the country in and the effects which we'll be feeling for years, perhaps this is an example of when regulatory intervention is justified.

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It's really easy to stop the boom/bust cycle in the UK house market; change the MPC remit to target RPI not CPI.

It's THAT easy. And that's why Gordon is going to end up looking like a fool or a knave when we look back in 20 years time.

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I think it's kinda interesting that you talk about libertarianism and then suggest a whole list of additional rules and regulations.

Decent renting laws and less planning regulation would do wonders IMO, as would the government making it clear that there would be no bailouts for dodgy banks.

Such as?

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People should understand (be educated) that house prices should not be greater than the price paid, unless significant (proveable) work/improvements have been carried out on the house.

The forst question ANYONE should ask when buying a house is - how much did YOU buy the house for? then the seconnd question should be "Why should I pay you more than this? What have you done to add value to the house?"

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Another free marketeer realises that a strong society is better than a strong economy and each doesn't necessarily lead to the other. And Thatcher might be on the way out too. Oh happy day!

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No need for any of this - you just need to make people accountable.

People who lied on their mortgage application go to prison. Anyone who misrepresented investments that they sold goes to prison. Banks must be made to bear all losses caused by bad loans or investments. No bailouts, no emergency liquidity injections, no state aid.

Once bankers who have lost billions are being torn apart by angry shareholders, they'll soon learn to behave. And if their activities threaten to bring down the economy, the banks must pay us.

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Once bankers who have lost billions are being torn apart by angry shareholders, they'll soon learn to behave. And if their activities threaten to bring down the economy, the banks must pay us.

that's all nice in theory, but the banks don't have that kind of money to repay the debt, thats the whole trouble.

the people aren't going to vote for sending themselves to jail, and the government definitely isn't going to step in and accept responsibility, so you are left with no one holding the bag.

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Decent renting laws and less planning regulation would do wonders IMO, as would the government making it clear that there would be no bailouts for dodgy banks.

Seconded!

You can look at Germany and question why people have little NEED to BUY houses, they just need to be assured of safe and secure accomodation; the German laws do this and the UK would do well to carefuly examine a similar framework.

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Once bankers who have lost billions are being torn apart by angry shareholders, they'll soon learn to behave. And if their activities threaten to bring down the economy, the banks must pay us.

It's not their own money they lose, all they lose personally is their job. They don't even lose last year's bonus which they made on the back of the same dodgy dealings, which were once profitable but always unsustainable. If they can make a fortune for themselves but bankrupt their employer then they will. They won't get torn apart by anyone because they'll be living the high life on a private island. They don't need to learn to behave because they've made their money and can get off the wheel.

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Such as?

Get rid of ASTs - let the tennant stay as long as they like unless they don't pay the rent or the landlord can prove that they need the house back.

More rights to modify the property for the tennant - unless the landlord can make a convincing case that the property should not be modified then the tennant can do what they like. "I don't like the colour" doesn't count.

It is not the landlord's business if the tennant wants to have children or pets or take up smoking.

Rent control - we actually have this to an extent in the UK already in that it is possible to get rents assessed by an indepentant body to see whether or not they are "fair". With rolling 6 month ASTs it matters little though.

They have all of the above in Germany plus sensible mortgage lending with the result that renting is vastly cheaper and better than in the UK.

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Get rid of ASTs - let the tennant stay as long as they like unless they don't pay the rent or the landlord can prove that they need the house back.

More rights to modify the property for the tennant - unless the landlord can make a convincing case that the property should not be modified then the tennant can do what they like. "I don't like the colour" doesn't count.

It is not the landlord's business if the tennant wants to have children or pets or take up smoking.

Rent control - we actually have this to an extent in the UK already in that it is possible to get rents assessed by an indepentant body to see whether or not they are "fair". With rolling 6 month ASTs it matters little though.

They have all of the above in Germany plus sensible mortgage lending with the result that renting is vastly cheaper and better than in the UK.

From a landlords point of view:

1. ASTs Fine, as long as eviction is swift and easy if you don't pay the rent. In an ordinary business, if you don't pay a bill, I don't do business with you again (or only do it cash up front). Renting is the only business where you can be effectively forced to subsidise another individual. If you won't pay you are in breach of contract at best, fraudulent at worst. If you CAN'T pay you are the social services problem, not mine.

2. Don't have a problem with this as long as building regs etc are complied with -ie no knocking down loadbearing walls!!

3. Again, as long as the tenant bears the cost of eradicating fleas etc., no problem

4. Rent control - has been tried a number of times in the UK and has generally been disastrous. If you are a 20something you won't have lived through the hassle of trying to find somewhere - ANYWHERE - to live that obtained in the 50s, 60s & 70s. I have.

5. I don't know about Germany, but I have looked at the bureaucracy of renting in France, where the law is again tilted in favour of the tenant. Landlords require your life history, guarantors, employers references, bankers references and God knows what else before they will let to you, which makes it very difficult. Great for those who have got a tenancy , much more difficult for those who haven't.

The one massive benefit that the UK system has is flexibility. You want to move job? At least finding a place to live isn't a problem. One of the reasons people didn't "get on their bikes" in Norman Tebbit's famous words, was the inflexibility of the Council House system - sure, you had security of tenure, but because there was no flexibility of supply, all the people who had houses were just sitting tight.

When ASTs were introduced in 1988 there was a flood of property to let on the market; this was WELL before BTL became popular; landlords who preferred to leave properties empty rather than cope with the regulatory nightmare were then willing to put their stuff out for rent knowing they could get it back. Prior to that a tenant could effectively squat for a year or two before eviction.

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As you can see from the left, I live in Germany. I bought though I used to rent - either works. The system ensures that the type of people that become landlords have long-term intentions and understand their greater responsibilities. Equally tenants have to prove themselves a little so a proper relationship is assessed at the outset. Operating as a landlord should not be like any-other-business. Like farming, the provision of housing is crucial to society and a landlord cannot just take-the-money-and-run when they are playing a crucial part in the social framework. No more than a farmer can produce some poor standard product and foist it upon the buying public without any concern for the nutritional quality, or its safety. I once read that no owner occupier would tolerate mortgage terms that gave a lender the right to repossess at their convenience despite the fact that the lender effectively owns the property; thus it should be the same for tenants. If a prospective landlord is not happy with such terms they should be in a different business. There are clearly enough in Germany to provide plentiful housing at a far lower cost than the UK.

Over here it is written into the rules that the property will be maintained and there is an overseeing body that checks standards. The rent is controlled by the town hall. It is a system that works.

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Get rid of legal tender laws.

WTF?? If you mean, I paint your house, & we both agree you give me a load of coal then we already have it; it's called barter.

If you mean, I paint your house, & you have the right to insist I accept a load of coal instead of legal tender, then, er, I don't think somehow that's going to work for long.

Edited by cartimandua51

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WTF?? If you mean, I paint your house, & we both agree you give me a load of coal then we already have it; it's called barter.

If you mean, I paint your house, & you have the right to insist I accept a load of coal instead of legal tender, then, er, I don't think somehow that's going to work for long.

It would be the other way around. Legal tender laws stipulate what you must accept, not what you can't.

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It would be the other way around. Legal tender laws stipulate what you must accept, not what you can't.

My economic history is a bit hazy, but I seem to recollect that a lot of the legal tender laws were brought in to protect workers; i.e. to stop employers paying them in tokens that could only be used in the company store. (Truck Acts??).

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As you can see from the left, I live in Germany. I bought though I used to rent - either works. The system ensures that the type of people that become landlords have long-term intentions and understand their greater responsibilities. Equally tenants have to prove themselves a little so a proper relationship is assessed at the outset. Operating as a landlord should not be like any-other-business. Like farming, the provision of housing is crucial to society and a landlord cannot just take-the-money-and-run when they are playing a crucial part in the social framework. No more than a farmer can produce some poor standard product and foist it upon the buying public without any concern for the nutritional quality, or its safety. I once read that no owner occupier would tolerate mortgage terms that gave a lender the right to repossess at their convenience despite the fact that the lender effectively owns the property; thus it should be the same for tenants. If a prospective landlord is not happy with such terms they should be in a different business. There are clearly enough in Germany to provide plentiful housing at a far lower cost than the UK.

Over here it is written into the rules that the property will be maintained and there is an overseeing body that checks standards. The rent is controlled by the town hall. It is a system that works.

Can you tell me the system in Germany when a tenant stops paying their rent and / or becomes a nuisance (by which I mean constant loud parties at 3.00am, rubbish bags / old cars strewn around the garden, subletting to other people so the property is overcrowded - you get the general idea)? Is the landlord held responsible? Can he evict? How long does that take?

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LAND TAX.

There, I've said it. It's the elephant in the room. It's the obvious solution that everyone ignores.

Land Tax is a banned subject - because it would prevent HPI and lots of very rich people depend on HPI to keep them rich.

Everywhere it's been implemented there has been an economic boom. Japan post WW2 was such a sucess BECAUSE of land taxation.

As soon as it was scrapped, land speculation exploded and destroyed he economy.

Tax land annually as a percentage of it's value... that is, tax the locational value of the land, not what is on the land.

Scrap all other taxes to encourage production.

Scrap most planning restrictions... with land taxes they aren't needed as development is self balancing.

Problem solved.

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Another free marketeer realises that a strong society is better than a strong economy and each doesn't necessarily lead to the other. And Thatcher might be on the way out too. Oh happy day!

I am a free marketeer. However, I would aim to reduce the number of laws individuals and businesses have to abide by by a large number, if I could. The market does a good job most of the time providing people with a range of good value, high quality goods and services.

Sometimes the market fails - as it has done with property.

For all her faults, the country needed Thatcher - badly. What Thatcher should have done in her time was institute rules similar to the ones I propose to stop HPI happening again after the last crash. It would have allowed a dynamic, competitive and profitable marketplace - a steady and stable one unlike the one we have now.

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Can you tell me the system in Germany when a tenant stops paying their rent and / or becomes a nuisance (by which I mean constant loud parties at 3.00am, rubbish bags / old cars strewn around the garden, subletting to other people so the property is overcrowded - you get the general idea)? Is the landlord held responsible? Can he evict? How long does that take?

It comes down to the contract here. Questionable behaviour would go to court if the tenant did not voluntarily go but it isn't a huge drawn-out procedure. I have not seen it happen for myself but I have only been here three years. The culture is different and Germans are disconcertingly well behaved in some things, even Berliners. There's an innate sense of fair-play that is ingrained in the German psyche, showing-off with tales of easy money doesn't seem to go down well. Plus, so many people change flats frequently and are cautious of their need for future good references.

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  • 295 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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