Wednesday, October 21, 2009

Your Thoughts Wanted

Are house price rises really a good thing?

So what do you think then, are house price increases robbing the young and poor – and future generations – to pay for the consumption of the old today? Is the government deliberately trying to engineer this scenario, motivated by short term political considerations? And is there any other choice? Thoughts - from the young and old, landowners and landless - please.

Posted by sybil13 @ 04:23 PM (1008 views)
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7 thoughts on “Your Thoughts Wanted

  • Mark Wadsworth says:

    “are house price increases robbing the young and poor – and future generations – to pay for the consumption of the old today?”

    Yes. And not just the old, it’s anybody who bought ten or more years ago. (and especially those who bought more than ten years ago and sold in 2007, tee hee!!).

    Next question.

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  • you wouldn’t expect a very balaced debate on this site would you! (High prices = bad).
    The solution in my view is to make the costs of ownership higher for larger houses e.g. council tax to reflect the property value more closely. At the moment cheap houses are disproportionately taxed. But nobody will do anything about this problem because its electoral suicide.
    I think a new generation of politicians might possibly sort all this out in about 10 years time but not the current crop.

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  • @ cyril “not the current crop.” Just as tomorrow never comes, and today is always here, so the current crop will also always be here. Want to see some up-to-the-minute political satire? Watch Yes Minister.

    Of course if you haven’t got a house then high house prices are bad. But once you have one, then it seems the magic of high house prices is hard to ignore. But then, looking at so much of our society, what the general populous thinks is a good thing is normally just the opposite. Low income tax (must be good, I have more money in my pocket) but they fail to see the insidious effects of a high level of VAT. The stupid tax (ie the Lottery); need I say more? Europe, and its ‘erosion’ of our identity and sovereignty, yet if this is such a bad thing why has our trade massively increased with Europe?

    There are so many things that prima facie may look good, but in reality the opposite applies. So high house prices — taken on their own, with respect to nothing else other than its nominal value — are a good thing. The trouble is, houses are sort of set in the middle of society, literally.

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  • @dude

    I can’t possibly see anything good about high house prices other than what the rather well written article states – it appropriates money from the young property poor to the older property rich which happens to be a good thing only if you happen to be old and have property.

    There is nothing else. Your argument is the typical broken window fallacy – that forcibly giving money to one section of society can produce a net gain for all of society. Extending the same logic, burglars are doing society benefit by redistributing wealth. The reason your argument doesn’t work is because of social “externalities”.

    Small things like allowing young couples to be able to afford to have children, allowing young families to have a parent at home instead of putting their children into nurseries to be supervised by strangers. Allowing young people to actually feel like stakeholders in society by owning a property as opposed to enriching an elderly rentier capitalist landlord.

    You remember – all those things that you took for granted when you were younger? Yes, those are the ‘externalities’, and you deny those coming after you of those basic rights at your peril – because when you are frail, infirm and relying on the people around you to look after you, those same generations that watched you rob their birthrights will remember your legacy.

    And they will abandon you like you and other elderly politicians and economists abandoned them.

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  • 3. paul

    I wished I had written that.


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  • House price rises benefit only the minority i.e. home owners.

    Construction, Developers, Utilities, EA’s, Logisitics, Marketing Agencies, Material Suppliers, IFA’s, Mortgage Consultants, Lenders and the country’s debt level in the form of Stamp Duty payments, all benefit from a reduction in house prices as the market is openned up to more buyers.

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  • Yes that was quite good paul.

    A definate hint of Daniel Hannan I feel.

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