MSE Leaders' Debate: First Time Buyer Mortgages

Former_MSE_Wendy

This thread is specifically to discuss the First Time Buyer Mortgages question in the guide:

First Time Buyer Mortgages: MSE Leaders' Debate

To discuss or ask a question about the guide: click reply

mjh421

The Tories promise you the American Dream but the reality is that if you pursue a policy of low wages then the likelihood is that those at the bottom of the pile will never be able to afford to buy a home.

We used to have council housing until the Tories sold them off, in those days people spent a fifth of their income on housing and rates, today you need the whole of one income to pay for the mortgage and depending on your income level in excess of one income.
It goes without saying that private rented accommodation is almost as high as a mortgage. Complaining of the level of low rents in those days Margaret Thatcher talked in terms of an economic rent, I have no doubt that if young people today had the support of council housing that we had in those days they would have more disposable income to spend in the real economy as they pleased.
The loss of that disposable income is why politicians are forced to use the housing market to expand the economy.

FATBALLZ

What a load of crap. All 3 are the same, unwilling to admit greed by BTLers, baby boomers and novice 'property developers' has blown the prices up to ridiculous levels, and they need to be targeted to be brought down over a period of time. Bringing down prices by 40% over 7-10 years should be the goal. Instead it's "we're running scheme X to allow young people to lock themselves into an extra £100k of debt, this is how much we care".

None of these pathetic 'local communities decide best place for housing development' - the greedy NIMBYs won't let anything be built within 10 miles of them for fear of their unearned windfall disappearing back to where it came from. Build houses on green belt land if there is nowhere else - the next generation come first, not bits of grass and greedy homeowners.

And to the post above - I take it you have been hibernating for 15 years - house prices didn't boom 200% under the tories, it was under Labour. Wake up.

mjh421

FATBALLZ wrote: »

What a load of crap. All 3 are the same, unwilling to admit greed by BTLers, baby boomers and novice 'property developers' has blown the prices up to ridiculous levels, and they need to be targeted to be brought down over a period of time. Bringing down prices by 40% over 7-10 years should be the goal. Instead it's "we're running scheme X to allow young people to lock themselves into an extra £100k of debt, this is how much we care".

None of these pathetic 'local communities decide best place for housing development' - the greedy NIMBYs won't let anything be built within 10 miles of them for fear of their unearned windfall disappearing back to where it came from. Build houses on green belt land if there is nowhere else - the next generation come first, not bits of grass and greedy homeowners.

And to the post above - I take it you have been hibernating for 15 years - house prices didn't boom 200% under the tories, it was under Labour. Wake up.

You clearly are not old enough to remember the term "negative equity" under the Tories last spell in office, house prices rose to the point where the housing market went bust. Still real facts don't matter to Tories.

FATBALLZ

mjh421 wrote: »

You clearly are not old enough to remember the term "negative equity" under the Tories last spell in office, house prices rose to the point where the housing market went bust. Still real facts don't matter to Tories.

:rotfl: 'real facts'? I may not be able to remember life under the tories but at least i can do primary school maths. Under the tories, prices rose about 50%, or £35k in real terms. Under Labour, they have risen 120%, or £110k in real terms. So when prices fall back to normal, in which scenario do you think negative equity is more of a problem? Or are you a typical middle-class Labour voter, 'help the poor' provided you can have £100k's in free housing 'wealth' and prices go up above inflation forever at the expense of your kids generation.

Brummygold

None of the three leaders mentioned the real reason first time buyers cannot get onto the market. The answer is not shared equity, it is not lower LTV mortgages to people who cannot afford it. The answer is that prices need to deflate to sustainable levels. The reason house prices inflated so high was because the banks were lending too much money to people which in turn pushed up prices to silly levels.
This has began to unravel now with the banks going bust and they now have no choice but to be prudent in lending unless we want the same thing to happen all over again. Gordon brown has put in measures to postpone the housing market from correcting which are now starting to affect other areas of the economy, ie the weak pound which in turn has caused petrol prices to rocket which is now causing inflation. This mess has got to be tackled by the next government.

brit1234

mjh421 wrote: »

You clearly are not old enough to remember the term "negative equity" under the Tories last spell in office, house prices rose to the point where the housing market went bust. Still real facts don't matter to Tories.

Well we know what negative equity is under Labour. Labour recklessly helped create the biggest housing in history and are trying to keep it going. I believe under Labour we are going to have the biggest percentage of people in negative equity ever.

http://www.youtube.com/watch?v=oZFt46aQyQ8

Brown's policies are determinded to price out first time buyer and the tories aren't much better.

Shared ownership/home buy are schemes that in reality increase and maintain house price inflation. They are part of the problem preventing prices fall to affordable level, they are not the answer.

At least Vince Cable warned of the dangers of the property bubble and wants to do something about it.

Vince Cable - Lib Dems

mjh421

brit1234 wrote: »

Well we know what negative equity is under Labour. Labour recklessly helped create the biggest housing in history and are trying to keep it going. I believe under Labour we are going to have the biggest percentage of people in negative equity ever.

http://www.youtube.com/watch?v=oZFt46aQyQ8

Brown's policies are determinded to price out first time buyer and the tories aren't much better.

Shared ownership/home buy are schemes that in reality increase and maintain house price inflation. They are part of the problem preventing prices fall to affordable level, they are not the answer.

At least Vince Cable warned of the dangers of the property bubble and wants to do something about it.

Vince Cable - Lib Dems

I note that none of the respondents seem to understand that house prices rise because people are prepared to pay the asking value.

The other small point that you overlook is that when people had real choice they could rent council houses or buy private as they saw fit. That is, what ever they could afford, like all big Tory Ideas people today are left with little choice and are forced to buy at high prices or rent at extortionate rates, using Thatchers words an economic rent.

If people today recognised just how much in interest they pay to the banking system they might just see how futile home ownership is. In the late 60's I lived on the continent and rented a room for as little as £7 per month whilst returning home I payed £7 per week. Most people in Germany rent hence they have more disposable income, which has the knock on effect of maintaining their manufacturing base.

You can con yourselves as much as you like but the reality is that if you want cheaper housing you need council houses that act as a brake on house inflation, in case you can't see look back to the 60's and 70's and compare rents and house prices to that of the 90's and beyond.

It does seem characteristic of the English that image is more important than substance, may be that is what is driving home ownership rather than the common sense shown on the continent.

Finally, for those of you with such short memories, Cameron is promising exactly what thatcher promised, and the net result was she wiped out 25% of Industry in her first two years, if Cameron does get his way you may well repent at your leisure when you too lose your job.

brit1234

mjh421 wrote: »

I note that none of the respondents seem to understand that house prices rise because people are prepared to pay the asking value.

Thats not it at all. Prices rise to match the lending criteria and the interest rate levels. Evidence of this can be seen in the UK, US and all round the world. In the US lending criteria was lossened, loan periods were extended and prices rose with the low interest rates. When rates went up the whole area was shown for its weakeness and the credit crunch stated.

Homebuy and shared ownership are just like sub prime allowing people to over extend them selves and buy overvalued properties.

These are bad Labour and tory policies.

Gordon Brown is bankrupting the country and rather than dealing with the problem he is delaying it with low interest rates and delayment to cuts.

Mervyn King is warning that the victor in next week's election will be forced into austerity measures that will keep the party out of power for a generation
http://www.guardian.co.uk/business/2010/apr/29/mervyn-king-warns-election-victor

Dan_1976

It really does not matter who wins, they have little choices but to cut cut cut! They dont have many ways to do it.

House prices will go down as more jobs go, interest rates go up, fuel prices go up, energy costs go up, council tax goes up stays the same, income tax goes up but dont worry the under 25's will be given training to get back to work!

We got our selves in this mess by borrowing to much and buying over inflated houses at prices that mugged us off.

I work in transport and many companie shave had to cut prices down so far they are now going bust, this is happening in many trades. They will have to put prices up soon so more business' will struggle.

WE have at least a year or more of this and if they dont get the cuts right first time buyers will be struggling for even longer!

Ps. The tories sold off all the council houses to control us, we cant strike if we have a mortgage! This has really bit us on the bum

mjh421

brit1234 wrote: »

Thats not it at all. Prices rise to match the lending criteria and the interest rate levels. Evidence of this can be seen in the UK, US and all round the world. In the US lending criteria was lossened, loan periods were extended and prices rose with the low interest rates. When rates went up the whole area was shown for its weakeness and the credit crunch stated.

Homebuy and shared ownership are just like sub prime allowing people to over extend them selves and buy overvalued properties.

These are bad Labour and tory policies.

Gordon Brown is bankrupting the country and rather than dealing with the problem he is delaying it with low interest rates and delayment to cuts.

Mervyn King is warning that the victor in next week's election will be forced into austerity measures that will keep the party out of power for a generation
http://www.guardian.co.uk/business/2010/apr/29/mervyn-king-warns-election-victor

So Mervyn King says so, so that must be right.
The problem with people in this country is that they repeat what others say rather than think for themselves.

We have had three financial crashes in this country since Margaret Thatcher deregulated the financial sector, when and how did we get out of the last two crisis? I'll tell you, you don't know and neither does anybody else.
I am in the privileged and lucky position that I do not owe anybody anything, so why am I being asked to pay for a debt which I do not know where it has come from , how much, and who I owe it to? And guess what you don't either.
But you are convinced that we are liable to a debt we know nothing about.

Just to help you in thinking a little, I would suggest that the players in the Casino Economy are to blame for any debt incurred in this country, so why aren't we asking them to pay the debt off?

To help you think a little further, if we do what the likes of Mervyn King want we will sink into deep recession which you will of course blame Gordon Brown for. Further more Gordon Brown is guilty of carrying on where the Tories left off, but you no doubt believe in free market economics and so does your mr. Clegg. The fact that you can barely put a cigarette paper between all the party leaders policies is something that a lot of people other than the likes of you have come to notice. Yes there are small policy differences but they all believe in the same basic principles.

You no doubt believe that replacing Gordon Brown for Clegg will be a change, only in personality the general economic thrust will be the same.
Therefore inevitably we will a little further down the line end up in exactly the same place.

If you want change then we need a radical change in policy not personalities. Needless to say Cameron would prove to be the biggest disaster as he is a Thatcherite clone and we know what the end result of that was.