Sunday, September 15, 2013

Missed opportunity

Clegg and Alexander reject Cable's warning over Help to Buy

"Nick Clegg and Danny Alexander have dismissed a call by their Liberal Democrat colleague Vince Cable to restrict the second phase of the government's Help to Buy mortgage scheme to areas of the country with depressed property prices". Alexander told Sky News: "We are a million miles away from a housing bubble in this country. Right now the problem we face in the housing market is we are not building enough new homes..". Clegg said on the Andrew Marr Show on BBC1: "You can't set a national policy, neither the government nor the Bank of England, based only on what happens in Kensington and Chelsea"

Posted by alan @ 07:44 PM (2615 views)
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12 thoughts on “Missed opportunity

  • mark wadsworth says:

    Well, if there’s no “housing bubble” then houses are not too expensive, ergo there is no need for Help To Sell.

    The only justification for Help To Sell is if houses are too expensive.

    The “not building enough” is a separate issue and can be dealt with by slapping Business Rates on plots with planning permission.

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  • “You can’t set a national policy, neither the government nor the Bank of England, based only on what happens in Kensington and Chelsea”

    or Ec1 – 4 or Wc 1-4 or E1 – E18 or W1 – W14 or N1 – N21 or NW1 -NW 10 or SW1 – 20 or SE1 – 26 or Harrogate or anywhere in the Cotswolds or West Essex or Hampshire or Buckinghamshire or Berkshire…….?

    I could go on but I think Nick and Danny have droned on for long enough and the party conference hasn’t even started yet!

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  • It is a curious piece of economic doublethink to claim tgat we have a supply shortage rather than a bubble. Supply shortages are half the piece of the bubble puzzle. If there had only been enough tulips to meet the unusually high demand, the speculators would never have entered the market and no one would ever allude to them today.

    Disappointing really, as the Lib Dems were touting a lot more sense than the rest in the run up to the last election.

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  • London was still in a bubble before the last rush of madness occurred. On Friday I saw an elderly client who had £350,00 cash to spend on a 1 bed flat on the outskirts of London. No estate agent is calling him back as his budget isn’t high enough. You cant trust what comes out of Cleggies mouth after he reneged on the promises to students about fees. He’s not even breaking promises here, so he will always go with what will get him the most votes.Greater London has a population of 9.7 million and that’s before you add in Surrey and the rest of the surrounding counties. All are racing ahead in house inflation.

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  • reticent, not that it matters much but the tulip mania is part myth and part caused by legislation. The book that popularised the story was written two hundred years after the event and the data used by the author came from a biased anti speculative pamplet . Modern researchers have refuted some of this data. There is no doubt that some sort of speculative bubble took place but as I alluded to earlier it was actually a rational response to ill-advised government legislation. The Dutch government past a law that allowed purchase contracts to be voided for a small fee. This meant that it was in tulip traders interests to buy no matter how high the price. Some of the high prices reported were actually from voided contracts and modern research shows some prices that were much lower than reported in the 19th century book that popularised a 17th century event.

    Regardless of that, Clegg is responding to the recent surge in our population. Last year it officially grew by 419,900 people but no one believes that figure. It is almost certainly much higher than that. We didn’t build enough houses last year to handle this massive surge in population (even the official number) and the houses we did build were the smallest in Western Europe (you can’t fit many people into tiny houses). Our population is forecast to carry on growing at an even faster rate but there is no sign yet of an imminent building boom. That is why politicians from all the main parties have started agreeing on the need to build more houses. It’ll take years to ramp up house building but in the meantime the population increases will keep on coming.

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  • To be fair to the house building industry there has recently been a small pick up in building. In the first quarter of 2013 they built 4700 more homes than they did in the first quarter of 2012. However as per my post above our population was about 105,000 bigger in early 2013 than it was in early 2012. Of course the extra 4700 houses they built in a quarter that witnessed an extra 105,000 people were the smallest in Western Europe and there was almost certainly a lot more than an extra 105,000 people.

    The coalition has been touting this small improvement in house building because of the headlines from 18 months ago or so that suggested that they had presided over the lowest number of houses built since 1923. This recent low in house building coincided with a surge in population.

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  • “You cant trust what comes out of Cleggies mouth after he reneged on the promises to students about fees”.

    I think Clegg is only thinking of his political future. Not what would help Britain.

    My sentiments too Mark W & Techieman (presses “like” button).

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  • Build more houses. What’s not to like?

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  • Techie, nice try but you missed off E20, the new postcode district for the Olympic site. There doesn’t appear to be an E19.

    Interestingly, E20 was the postcode for the fictitious London boroughs of Walford and Sun Hill.

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  • I note that Clegg studied languages and Alexander has been a career politician.
    Neither have ever had “proper” jobs.
    Meanwhile Cable was the chief economist of Shell; and predicted the crisis.
    Who are you going to trust to know what they’re talking about?

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  • Sneaker
    I am sure that I read somewhere that Alexander was in forestry, or is it that I am having problems seeing wood for trees?

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  • mark wadsworth says:

    Iguana, no, truth is he is so thick that he once managed to get lost in a forest.

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