Wednesday, October 5, 2011

Finally the penny drops

High house prices destroying family life

wow....tell us something we don't know....we hate inflation,but high house prices are okay?!..fact is inflation of basic life items has being rising out of control for 10 years to 2007 and had boe raised interest rates early on and regulated the banks we would not be in this miss.

Posted by taffee @ 10:37 AM (1822 views)
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10 thoughts on “Finally the penny drops

  • Looks like comments from myself and Mark W there have already been culled…

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  • Spoke too soon – they’ve been reinstated, pending a govt inquiry.

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  • mark wadsworth says:

    RNR, the comments are nearly all spot on, is that just us lot, or is this now majority opinion in this country?

    Rather disappointingly, I’m not near the top of the worst rated, which is where my LVT plugs normally end up 🙁

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  • yes – the comments are excellent, as are the votes they are getting. I am starting to sense a real turning of opinion. Albeit the generally older, multiple property owner is probably sat in a big house reading a hardcopy paper, while the younger propertyless generation are the ones voting online.

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  • Although I have no mortgage, I’m increasingly coming round to the idea that a measure of mortgage debt forgiveness would be a good idea.

    Why? We need to build more houses, and house prices need to come down – but there is a legacy issue to deal with..

    ..negative equity is a miserable state of affairs that stops people spending, stops them moving house, and does nothing to cure our economic malaise.

    Consider what would happen if the BoE used the QE vehicle to wipe out 10% of existing mortgage debt (excluding BTL, second homes, and maybe limited to a £20k maximum)

    Would it be inflationary? I don’t think so.

    Would it make it possible for vendors to accept lower offers when selling – certainly, thereby bringing down house prices.

    Would it make mortgage holders more confident, to spend more and thereby boost the economy? Yes.

    What harm would it do? Aside from being seen as a gift from the prudent to the feckless, very little; and I don’t think it would actually hurt the prudent, as the wider economic benefit would rebound on them.

    Would the bankers profit from it? Hardly – default risk provision would be reduced, and that would enable them to offer slightly lower rates to new borrowers.

    – What’s not to like??

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  • Nearly all online discussions I see related to articles about the housing market (positive or negative) are bearish. I think it reflects the fact that more younger people than older ones are likely to comment online.

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  • orcusmaximus says:

    @Uncle tom “What’s not to like?”

    The bit about it being a gift from the prudent to the feckless! Although, this does seem to be a main policy for all our recent governments!

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  • uncle tom,

    Because then everybody would be free to borrow more money again, so they’d load themselves up to the eyeballs in debt and house prices would skyrocket. You’re basically giving all homeowners a £160,000+ deposit which they can leverage up. Also there’s the minor question about what happens to all the savers whose money you just stole. Granddad has to live on baked beans now that his pension has been given to some feckless debtor.

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  • Drewster,

    No – this would be a one-off retrospective measure, not an ongoing facility. Going forward, prudent lending practices need to be enforced.

    Where do you get the £160k figure? No-one would be given a deposit with this scheme – merely a right-down of existing mortgage debt using money created for the purpose (QE)

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  • doh! – write-down..

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