Support grows for 70% crash

Percy1983

julieq wrote: »

A better question to ask is whether you would prefer the economy to crash and burn so that those not in owner occupied property can buy, or whether you would prefer a relatively healthy economy in which a proportion are priced out.

Why not answer that one?

I am going for crash and burn for me, if somebody can't afford the house then get them out of it and let somebody in who can afford it.

I know I come accross as moaning its not fair house prices are so high, to which I am told life isn't fair deal with it, to which I agree. So on the same front, if you can't afford your house thats unlucky, it may not be fair as you have lost your job etc, but get out.

basically I think the big red reset button needs pressing.

nearlynew

julieq wrote: »

........And then there's an economic level, where it's a bad thing to have massive repossessions because it reduces bank asset bases further and feeds the recession. .............

A better question to ask is whether you would prefer the economy to crash and burn so that those not in owner occupied property can buy, or whether you would prefer a relatively healthy economy in which a proportion are priced out.

Why not answer that one?

For a capatalist, market economy to function properly it is imperative that bad decsions are punished by the market.

This includes banks being allowed to fail, businesses going bust and people being repossessed.

That's what recessions are for.

JonnyBravo

nearlynew wrote: »

For a capatalist, market economy to function properly it is imperative that bad decsions are punished by the market.

This includes banks being allowed to fail, businesses going bust and people being repossessed.

That's what recessions are for.

Flippin' 'eck.
A post I largely agree with from nearlynew? Whatever next?

(The only caveat being some banks are clearly too large to be allowed fail but investors ie shareholders losing everything is ok by me)

Graham_Devon

misskool wrote: »

Wow Graham, maybe you should speak to Derren Brown and get that skill of yours on TV.

Thanks "I don't side with the bulls" skooly. I will.

misskool

Graham_Devon wrote: »

Thanks "I don't side with the bulls" skooly. I will.

You need to hone it up boy. I don't.

I'm neither nor, either or.

This is what happens when people need to take sides in an argument, they're either with you or against you. yee haa

I hate people making presumptions about others on the net. Why do you think I have a female moniker?

nearlynew

JonnyBravo wrote: »

Flippin' 'eck.
A post I largely agree with from nearlynew? Whatever next?

(The only caveat being some banks are clearly too large to be allowed fail but investors ie shareholders losing everything is ok by me)

Welcome to the darkside my friend.

This could be the springboard you needed to take the leap into accepting my other pearls of wisdom as the ultimate truth.

I see we have also gone for the same % on the 2010 house price poll

Graham_Devon

julieq wrote: »

Blah blah blah

A better question to ask is whether you would prefer the economy to crash and burn so that those not in owner occupied property can buy, or whether you would prefer a relatively healthy economy in which a proportion are priced out.

Why not answer that one?

Why not indeed.

Are the only answers I get to choose from A) crash and burn or healthy economy?

Just I feel this is slightly weighted towards giving the answer you want, i..e B

With B, you have turned me around to say what you want me to say, so you can say you are right. With answer A, I would have to be pretty stupid to want the UK to crash AND burn and you can turn round and lay in.

Maybe I should apply to Derren Brown. i think I have a knack to this whole stupid posing of questions stuff.

Of course, I would choose C. A healthy economy, where people are not priced out and HPI moves inline with inflation. Simples.

[Deleted User]

Gorgeous_George wrote:

scarter

I like this post. It makes perfect sense and I thought I'd add...

... the psyche in the early 50's was affected by the recent war. People didn't want to buy houses. Also, there were many more affordable alternatives in the rental market - dominated by good quality council houses with good quality council tenants. I grew up on a council estate and the least desireable family at that time was quite respectable by today's standards.

That may well be the case. But the point is that those that WANTED to buy a house would have had a tough time. The cost of buying an acceptable but small terraced 3 bedroom house within travelling distance of my parents place of work cost more than 3 times than they could afford to borrow. They had to save up more than two years annual salary (assuming that they were on average wage). Given that most young couples weren't getting average wage at such a young age that means years of saving - or buying a small flat in a not-so-desireable area until you can afford to upgrade.

chucky wrote: »

and your post accurately reflects on the percentage of property that was owner occupied in the 1950s - just 30%, now it's close to 70% which tells us it's easier to buy now than it would have been then

As I said, my parents paid £2K for their first house. My dad was only able to borrow 1.5 times his salary (lets just say he was on the average salary of £350 pa - although it was almost certainly a good bit less). They were only able to borrow a little under 1/3 of what they needed to buy the house. They needed to save up the rest.

Today that house is worth about £240K. I think someone said that nowadays the average wage was £25k? Now according to this site:

http://www.alexanderhall.co.uk/mortgages/mortgage-calculators/how-much-can-i-borrow.html

A couple earning 25K a year each could borrow up to £300k. That sounds an awful lot to me in the current climate and I expect there's a catch. But even if they could borrow only 3 times their salary each that's £150k. More than half of what they'd need to buy that house. Not exactly plain sailing but they've got a better chance in 2010 than my newly married parents did back in 1950.

Of course, the suburbs of London have become over populated and due to suply and demand prices have got silly. Move out to where I currently live and the average house price is a mere £80k. It's lovely too - beautiful countryside, close to vast sandy beaches and only half an hour's drive down a relatively quiet motorway from the city centre. Now those prices will almost certainly move up sharply in the near future as more and more people are priced out of the Glasgow housing market. But right now there a lots of cheap places to live. You can even get onto shared ownereship schemes with the council if you're that strapped for cash. They've built some lovely new houses that look exactly like new private houses yet people can pay part rent and part mortgage thus getting onto the property ladder.

Of course, my parents had the option to move to somewhere cheap back in the 50's but they decided to rent and save to get a house closer to what they wanted. They preferred to rent a room in a Kensington than own a flat somewhere less desireable. It's a matter of personal choice. Normally it isn't easy to get on the property ladder but there are lots of ways to go about it. And every so often people will get a lucky break and shoot up the ladder fast despite modest means. That's probably not going to happen in the current climate - but that's life. I think a lot of the problem is that young people today are aware that in recent years people have been in a position to by very expensive houses despite modest means. But that is not the norm. Some of those people got lucky and others are in dire straights. People are now being prevented from taking such extreme gambles for their own protection...and the protection of the rest of us!

julieq

That's a narrow view. The bears are first to complain when their "good decisions" are wrecked because of the market collectively taking the view that more of their decisions will be good ones if the banking system is not allowed to collapse. A business functioning normally pre Lehmans was just as good post Lehmans, but without a banking system to offer operating credit it might well go bankrupt. So the virtuous can suffer because the unvirtuous are "punished". It then becomes a question of collective self interest to decide what the best course is.

It's dumb to say that recessions are "for" punishing the bad, unless you accept that growth is to reward the good. That's the other side of the coin. In fact, both just happen as a consequence of each other.

Any market is perfectly capable of pricing forward looking risk in, and you can see pretty easily from the stock markets that there's almost overexuberant confidence in the recovery (in my view overcooked). It's not as if rising unemployment and interest rates, ending of QE and the election are exactly top secret, anyone investing can see them.

I'd have more patience with the bears if they just admitted they didn't mind people being chucked out of their homes so they can have a cheaper one, it's a perfectly reasonable position, if selfish. But there would be consequences, of which the biggest is a massive increase in housing benefit payments. And guess who pays those?

misskool

julieq wrote: »

I'd have more patience with the bears if they just admitted they didn't mind people being chucked out of their homes so they can have a cheaper one, it's a perfectly reasonable position, if selfish. But there would be consequences, of which the biggest is a massive increase in housing benefit payments. And guess who pays those?

But the bulls are selfish too. They want to keep house prices high so the bears don't buy.

It's all relative isn't it? Human nature is inherently selfish. They want the best for themselves, survival of the fittest is primordial, the weak will always get beaten up.

Is anyone actually going to be altruistic about their need for a house?