Why is HPI seen as a good thing by the media and homeowners ?

ukcarper

How did you reach the conclusion that all homeowners want HPI

ad9898_3

ukcarper wrote: »

I suppose the ideal situation is HPI and wage inflation keeping in step with each other so your mort becomes a smaller % of your salary but it becomes no more expensive in real terms for FTBs.

Exactly, a good enough reason to cap mortgages at specific multiples of income.

StevieJ

ad9898 wrote: »

Exactly, a good enough reason to cap mortgages at specific multiples of income.

You mean move on to a Soviet allocation system for property, telling people what they should spend their money on:D

ad9898_3

StevieJ wrote: »

You mean move on to a Soviet allocation system for property, telling people what they should spend their money on:D

I doubt it, most people with any intelligence would sooner pay, for example 20% of their net earnings paying off a mortgage than 40-50%.

How would it be a Soviet allocation ??, the same rules would apply as they do to everything else you buy, you earn more money, you are able to buy more/better things (or bigger/better home), doesn't sound very Soviet to me.

WhiteThierry

StevieJ wrote: »

You mean move on to a Soviet allocation system for property, telling people what they should spend their money on:D

so, you're dismissing as communism sensible borrowing regulation, you have to cap it somewhere, just because the cap would be low doesn't make it communist. surely by your logic there should be no limits on borrowing??

StevieJ

WhiteThierry wrote: »

so, you're dismissing as communism sensible borrowing regulation, you have to cap it somewhere, just because the cap would be low doesn't make it communist. surely by your logic there should be no limits on borrowing??

Of course there is, in a fully functioning banking system the amount you can borrow is a function of risk/reward to the bank as it used to be

WhiteThierry

StevieJ wrote: »

Of course there is, in a fully functioning banking system the amount you can borrow is a function of risk/reward to the bank as it used to be

fair opinion, but i think recent history has proven that banks themselves struggle to play the risk/reward game within the fully functioning system you describe, and maybe it would be a much more sensible system to have defined limits set by the government rather than a few huge banks who have proved to be reckless beyond belief.

chucky

WhiteThierry wrote: »

fair opinion, but i think recent history has proven that banks themselves struggle to play the risk/reward game within the fully functioning system you describe, and maybe it would be a much more sensible system to have defined limits set by the government rather than a few huge banks who have proved to be reckless beyond belief.

good idea in principle - but you have foreign based banks and institutions who have now disappeared from the lending market who will have and be answerable to different regulations.

i don't think it would work - but the principle is right