MSE Leaders' Debate: First Time Buyer Mortgages

brit1234

mjh421 wrote: »

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.

I have a degree in risk management and have been studying economics especially the austrian school the last 4 years.

http://www.youtube.com/user/misesmedia#g/u

It doesn't take a genius to confirm that Merv is right on this issue. Just look at the huge debt, the revenue and the expenditure.

mjh421 wrote: »

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.

Sorry but don't treat me as a simpleton because you don't know. We got out of the dot com bubble collapse with the US by lowering interest rates to record lows. In fact that didn't deal with the problem but defer it allowing a transfer into new assest bubble principle housing.

mjh421 wrote: »

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 make the simple mistake of believing recession is bad, you are wrong. Recessions typically allow a clear out of the weak malfuntioning businesses and allow new opportunity for others. Infact the business left over are oftern stronger and will be more productive.

Simply putting off the recession time and time again with stimuklas packages and low interest rates just makes the consequences harder to deal with when we come to the end of the road

mjh421 wrote: »

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.

You forget both Osborne and Cable have Austrian tendancies unlike Brown who is a clear follower of Keynes. That is a major difference to economic attitudes.

Hopefully this video below will explain it to you the difference:

http://www.youtube.com/watch?v=d0nERTFo-Sk

viscione

lets be honest any one who has anything about them will know that the tories coming into power is going to be negative for the country. Look at how david cameron couldn't answer a single question straight both nick clegg and gordon brown noticed this at the last debate but some how David Cameron still won in the opinion polls?????

Cardinal-Red

mjh421 wrote: »

It goes without saying that private rented accommodation is almost as high as a mortgage.

This is, quite simply, absolute rubbish.

The rental on our house now is almost exactly half the mortgage payment on its 'value' assuming a 15% deposit, at around 4.5% fixed over 25 years.

While this may seem anecdotal at first glance, whenever we've rented it's always been because that option was cheaper than buying into a massively overinflated asset class at that time.

mjh421

viscione wrote: »

lets be honest any one who has anything about them will know that the tories coming into power is going to be negative for the country. Look at how david cameron couldn't answer a single question straight both nick clegg and gordon brown noticed this at the last debate but some how David Cameron still won in the opinion polls?????

Sorry pressed wrong button this is meant to relate to brit1234

It does not matter how well educated you are , it's your ability to think that matters, repeating like a parrot to spurious Milton Friedman ideology like the Chicago boys may have made them wealthy but has done nothing but harm to the American economy, or are all those car companies like GM just having a minor dip in fortunes for the while.

Anybody who claims that recessions are a normal phenomena and should be allowed to work their way through forget the 20's and 30's when the intervention of a war was the only way that succeeded in expanding the economy.

I was born 1 month after the war ended, and due to the intervention of Government in the economy I saw my living standards rise continually, the economy grew because the public sector grew,until thatcher changed everything I and others will tell you that jobs were abundant, we did not have mickey mouse training schemes as employers were prepared to pay for high quality training unlike today.

In order to be brief if right wing philosophy were correct we and the USA (where Market and Management ideas came from) should now be the dominant forces in the world, I would also remind you that Communist China is forced to prop up the Dollar in order to sustain their market there, so much for the theory, but who carries the burden for these clever ideas, you guessed the people who have no say in the matter. At least with state intervention as I have experienced we did have tangible benefits and I could write pages about those, suffice it to say Margaret Thatcher the Milk Snatcher abbreviates and sums up the benefits of Mervyn Kings outlook.

OldIron_2

Brummygold wrote: »

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.

The problem is more one of scarcity - there are fewer houses than there is demand for them, so the prices just get bid up until enough people decide they are too high. Trouble is, a home is one of the things its quite difficult to do without, so the price gets bid sky-high.

The ideal fix for this isn't really credit controls - OK, that controls the price, but only by adding barriers so that the less well off are barred from the market at lower prices. It works to an extent; the economy is protected from the asset bubble, and the would-be debtors from getting in too deep.

A more efficient fix is to increase the supply houses: prices will slide until they are more reflective of actual value. Thats amazingly tough to do though - just building extra houses isn't that effective: if its in an unfancied area, they are no use; in a better area, it just sucks more people in (same deal as with the road network); years of inadequate government has left us under-resourced with hidden pent-up demand.

leveller2911

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.


Sorry not true at all......People are like children in a sweet shop, If given the chance they would clear the shop out.

The mortgage industry under Labour has been just the same.Whoever came up with the idea of 125% mortgages wants shooting.It was all down to greed ,its easy to spend money thats not yours and people wanted to keep up with the Jones.

In my area since 1994 house prices have risen by nearly 300%:eek: whilst wage rises have gone up by around 40%, given the current LTV required it all tells me house prices will go down.

There is hope for FTB but only through a correction......

Its not sustainable and a market correction is going to happen,I would also say we NEED more Social Housing and to Labours shame they were found wanting and preferred to ride the HPI bubble instead.

barrybarryr

I'm a first time buyer and my girlfriend and I completed on our house last week.

In my opinion it comes down to the simple fact that everybody wants something for nothing and they want it immediately without having to work to get it.

We managed to buy a house because we saved up for one. I appreciate this is a novel idea in the world of the never never. If you are a first time buyer and you want a house you have to save for one. It really is that simple.

In order to save we have had to make sacrifices, I drive round in an 8 year old car and my girlfriend a 12 year old car that we will keep until they die and then go down to one. We do not have massive TV's or PS3's and we live within our means.

You all seem to want house prices to go down so that people can afford them. Perhaps that isn't the answer and the answer is that people's mindset and consumerism needs to change. The culture of credit cards and buy now pay later needs to change.

People need to realise that you aren't given money for nothing and that if you want nice things you have to work for them. They aren't a god given right!

leveller2911

barrybarryr wrote: »

I'm a first time buyer and my girlfriend and I completed on our house last week.



We managed to buy a house because we saved up for one. I appreciate this is a novel idea in the world of the never never. If you are a first time buyer and you want a house you have to save for one. It really is that simple.

I don't agree unless your earning mega bucks the vast majority of people can't save enough when compared to the HPI we have witnessed over the last decade or so.If someone can put aside £400 per month say if the FTB houses have gone up £600 how can they buy?.Its not as simple as you say.

In order to save we have had to make sacrifices, I drive round in an 8 year old car and my girlfriend a 12 year old car that we will keep until they die and then go down to one. We do not have massive TV's or PS3's and we live within our means.

We drive an 8yr old car, no flat screen plasma for us.One weeks holiday a year, managed to say around £36k and still can't afford to buy.FTB houses in our area are at least £167k so its still a no go for us.Its not the be all and end all for us, if we can buy we will ,if not we will rent.Our life is more important than owning bricks and mortar.

You all seem to want house prices to go down so that people can afford them. Perhaps that isn't the answer and the answer is that people's mindset and consumerism needs to change. The culture of credit cards and buy now pay later needs to change.

So you honestly believe house prices weren't/aren't vastly inflated due to HPI?....Now the QE has finished and the government can't prop up the housing market what do you think will happen?.How about the culture of 125% interest only mortgages with no saving product to pay it off,relying on future HPI ?To many people see a house as an investment rather than a home,I think this is a big mindset problem...

People need to realise that you aren't given money for nothing and that if you want nice things you have to work for them. They aren't a god given right!

I agree but given houses are overpriced or flip side most people can't afford to get on the 1st rung of the ladder what do you think will be the future in the next 5yrs?

uberteeb

So do I stay at home with my mother, save up a deposit, get a mortgae and buy a flat towards the end of this callender year or do I go rent somewhere now, save approx half of what I can staying at home and wait until the housing market crashes?

What would you do?

Staying at home saving what I am at the momment for a few years is not an option, I want out of here, I'm already too old to be here at 26.

barrybarryr

leveller2911 wrote: »

I agree but given houses are overpriced or flip side most people can't afford to get on the 1st rung of the ladder what do you think will be the future in the next 5yrs?

If you have 36k deposit and houses cost £167k then depending on your salaries you can afford to buy.

We had £21k on a £140k house and we could afford to buy. The banks would have lent us up to £160k and you have £15k more deposit than we had. You would need to borrow £130k.

So (assuming your salary would allow) you can get on the ladder if you wanted to. You just want it to be cheaper for you.

None of us can predict the future in 5 years time, that's a silly question to ask. I may die tomorrow.

One thing I can tell you about 5 years time is the fixed term on our mortgage will have ended, that's about it.