Blatant government corruption

[ZoyzaSorris]

20x20000 is 400,000 by the way. Obviously one cannot put the entirety of one's pre-tax income towards the mortgage though, so the point that it is ridiculous still stands.

[George Oscar Bluth II]

Shit maths from me there. Really shit maths.

But yes, ten year's salary for a house is still insane.

[biggytitbo]

On what basis is it rational? The initial motivation was to get rid of social housing, with a useful bribe to the electorate a bonus. And it's the removal of social housing that has been the single biggest cause of uncontrolled rents and house prices. Dodgy mortgage lending and government interference made it worse, but if we still had a decent level of social housing, with affordable rent s, there could never have been a bubble.
(I'm talking here about Thatcher's specific policy of encouraging people to buy their council house, and selling below market rates).

It was a rational policy in a wider environment were new council housing was still been built and the general housing market was still grounded in reality. That situation didn't last the 80's though and that policy is now as irrational as the whole of our dysfunctional housing market is in this country.

[Jamie Oliver is fat]

But yes, ten year's salary for a house is still insane.

And still innaccurate :-P

The actual figure paid will be nearer your 20 times salary once interest accrued over 20 years mortgage term is taken into account

But you can either sit at the side griping about the justice, which is an entirely reasonable thing to do BTW IMO, or if owning a home one day is something you want to do, then just get on with it and go about your life, because another 5 years will pass, people will still be moaning about house prices, but you could be 25% of the way towards owning yours regardless of how much it might be "worth"........

[biggytitbo]

Economic reality will eventually impose itself though. THere is simply not enough money for people to afford housing at current levels unless 1 of 2 things happens:


1 - We all suddenly get massive wage increases
2 - We return to full on fraud in the mortgage market and a massive new bubble.


In my opinion those 2 things are about as likely to happen as me riding down the high street on a giant puppy. Government fiddling will only delay the inevitable crash so long, so if you are lured into buying with these schemes you are going to get destroyed in the future. Don't touch it with a bargpole.

[Replies From View]

Don't touch it with a barge-pole.

Not even a plastic one?   :-(

[Blinder Data]

Even my girlfriend, whose opinions on the political and economic situation are rarely expressed, balked at the proposal: "Why are they doing that? Surely helping people buy houses they can't afford got us into this mess?"

My Labour-supporting friend said to me at the last election that the next Tory government would never be "as on my side" as the last one. I fucking hate Labour, but this government is truly a shower of cunts.

[thepuffpastryhangman]

reality

that assumes people never die. We shouldn't ignore the fact most housing is 'traded', eg.. Dead dada's country pile is sold off and several suburban piles paid off with proceeds. In this way the 'bubble' inflates itself and serves and protects all involved.

This isn't trickle down madness, the 'trades' occur at all levels.

[Jamie Oliver is fat]

Economic reality will eventually impose itself though. THere is simply not enough money for people to afford housing at current levels unless 1 of 2 things happens:


1 - We all suddenly get massive wage increases
2 - We return to full on fraud in the mortgage market and a massive new bubble.


In my opinion those 2 things are about as likely to happen as me riding down the high street on a giant puppy. Government fiddling will only delay the inevitable crash so long, so if you are lured into buying with these schemes you are going to get destroyed in the future. Don't touch it with a bargpole.

I don't disagree BT, but I heard those exact same arguments being made back in 2003 and I could be 9 years into a mortgage if I'd ignored those sane voices :(

My fabulous wealth is well documented, but even taking that into account, I am able to comfortably afford a decent end terrace starter/2nd home type place on my own.

And there are plenty of places a lot cheaper than this around here. I borrowed 3x salary, so people borrowing 4x on less than me can afford starter homes around here as it stands.

I fail to see where the catastrophic collapse will happen. I think house prices will bumble along up a bit and down a bit for 10 maybe 20 years with inflation slowly eroding their over-valuation

But you could have a mortgage paid off during that time......

You pays your money, you takes your chances. If it doesn't skint you, then buy. If there is a massive collapse then everyone is fucked and we might all get our debts written off

I'd rather be in a place paying a mortgage than not, that's what it comes down to at the moment. If I lose my job or the world implodes then we'll cross that bridge etc

[Replies From View]

So who fucked up the poll then?  Thanks for that.

[biggytitbo]

I don't disagree BT, but I heard those exact same arguments being made back in 2003 and I could be 9 years into a mortgage if I'd ignored those sane voices :(

Or to put it another way 'trapped' in a property.


When the governments life support of this corpse stops working is the golden question really. Possibly there won't be any single big crash, rather a long, multi decade great stagnation. Who knows really, but the maths on this is rock solid. People physically don't have access to the money to buy houses at current prices unless there's widescale fraudulent lending, so the only certainty is we either remain in a market that's total frozen or prices go down. We aren't going back to the 'boom' times or anything like them for many many years, if ever.

[biggytitbo]

Good stuff here -  http://www.guardian.co.uk/commentisfree/2012/mar/12/newbuy-scheme-housing-market

[Johnny Yesno]

It was a rational policy in a wider environment were new council housing was still been built and the general housing market was still grounded in reality. That situation didn't last the 80's though and that policy is now as irrational as the whole of our dysfunctional housing market is in this country.

It wasn't a rational policy. It was an ideologically driven policy that contributed to the situation we have now.

[biggytitbo]

No what contributed to where we are now was selling off council housing without replacing it. Letting people buy their council house and replacing the stock of social housing at the same time is a good idea.

[Johnny Yesno]

And there are plenty of places a lot cheaper than this around here. I borrowed 3x salary, so people borrowing 4x on less than me can afford starter homes around here as it stands.

Where does that leave someone earning a third of your salary?

[Johnny Yesno]

No what contributed to where we are now was selling off council housing without replacing it.

But that, as MojoJojo pointed out, was the ideological goal. It's the removal of state influence and turning everything over to the private sector. Building more council houses would have been contrary to the plan.

[Jamie Oliver is fat]

Where does that leave someone earning a third of your salary?

Renting or buying with their partner?

Or to put it another way 'trapped' in a property.

eh? how do you work that one out?

I'd be almost half way through my mortgage and would've seen 9 years of inflationary pay rises

[biggytitbo]

Renting or buying with their partner?

eh? how do you work that one out?

I'd be almost half way through my mortgage and would've seen 9 years of inflationary pay rises

Someone buying in this scheme would be in instant negative equity and would stay there for a very long time, trapped in the property and unable to sell.

[Jamie Oliver is fat]

Ok we're talking about different things.

I'm saying that, if I'd ignored the tin foil hat morons on housepricecrash in 2003, I would've been 9 years into a mortgage and they're still banging the same drum now

The drum still sounds right to me though, for what it's worth

As it was, I wasn't really seriously thinking about buying back then. I was in my mid-twenties and was happy renting with the GF at the time

But plenty of people on that forum were and still are repeating mantras like members of a cult. The arguments are morally just in most instances, and probably based on sound financial theories, but are STILL not coming to fruition

Without wanting to obsess too much about that place, it's clear that a lot of the people claiming to be standing up for first time buyers who cannot afford to buy are simply people on the other side of the gamble; those who sold up hoping to make a killing from the high sale price of their house by buying cheap places during a crash

Just as reprehensible as ruthless BTL landlords and lenders during the boom, they just backed the wrong horse

[MojoJojo]

It was a rational policy in a wider environment were new council housing was still been built and the general housing market was still grounded in reality. That situation didn't last the 80's though and that policy is now as irrational as the whole of our dysfunctional housing market is in this country.

How was forcing councils to sell housing at a loss rational?

Do you think being forced to sell social housing at a loss might have had something to do with why councils stopped building social housing?

Slightly baffled why you are defending right to buy, when it's clear that was when housing in the UK started going mental.

[biggytitbo]

How was forcing councils to sell housing at a loss rational?

Do you think being forced to sell social housing at a loss might have had something to do with why councils stopped building social housing?

Slightly baffled why you are defending right to buy, when it's clear that was when housing in the UK started going mental.

Although it was later much abused, many ordinary, low income hard working people were able to own their own homes, homes that they'd already invested a considerable amount of money in, and I think that was a good thing. The current woeful situation was caused by a number of factors that started in the 80s, accelerated in the 90s and went totally crazy in the 2000s. The right to buy stuff was part of it but only because they failed to put the policy in  the proper context, it wasnt bad in itself.

[MojoJojo]

Well, yes, if you approve of the government giving money to people so they can own a house.

What were you complaining about again?

[biggytitbo]

The government propping up house prices, taking money from construction companies to push through favourable measures, luring people into negative equity, encouraging all the behaviour that lead to the biggest economic crash in history, pricing millions of people out of home ownership, pushing up rents, neglecting social housing, overseeing a transfer of wealth from the poor, workers and savers to landowners, speculators, BTL investors and the reckless.


Just that sort of thing really.

[MojoJojo]

So you're against Right to Buy then?

[biggytitbo]

Pretty sure I already said I am yes, about 5 times. It's quite abundantly clearly not the correct policy to pursue in such a woefully dysfunctional market.

[Shoulders?-Stomach!]

Telling kids that hailstones are punishment for them "acting like pubes"

Fantastic.