Wednesday, September 3, 2008

The latest measures do not address the underlying problem

Leading article: The best hope for housing is a continued fall in prices

One solution offered yesterday, that overstretched owners could sell all or part of their home to a council or housing association and rent it back, is an idea that owes much to the imaginative thinking broached by the Liberal Democrat Treasury spokesman, Vincent Cable. It is a good idea, and one that is least likely to distort the market. The same cannot be said of the interest-free loans for first-time buyers. It looks like a sop to overstretched construction companies complaining about being stranded with unsold stock. What is happening in the UK housing market is a correction [not yet a crash?]. This correction might be painful for existing home-owners, and the many branches of the economy that fed off the bloated market. But it is the best possible development for first-time buyers.

Posted by drewster @ 01:10 AM (572 views)
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3 thoughts on “The latest measures do not address the underlying problem

  • This is what we need – the mainstream media telling it like it is.

    I expect somebody on here already figured this one out yesterday, but a good bit of analysis about the stamp duty rumours from para 3… “Now that the position has been clarified, the market – at least in some sectors – may perk up as sales placed on hold are “unfrozen”. One likely result is an increase in sales registered this month, which will allow the Government to claim that its measures have had the desired effect in galvanising the market. This will not be completely true…”

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  • It’s just so typical of this ‘effing government to interfere…..image & perception is everything to them.

    OUT! OUT! OUT!

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  • The “free” loans are, I assume, interest free loans. Given that house sales do not complete overnight, surely there must be some process whereby people apply for, are approved for, and then have this funding available for some time? In that case I am tempted to apply myself, and then hold on until prices have properly crashed before buying somewhere nice with an interest free loan.

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