MSE Leaders' Debate: First Time Buyer Mortgages

property.advert

Cardinal-Red wrote: »

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.

I have no idea where you live but it is not somewhere I have ever lived. You also conveniently forget to include any reference to an appreciation of the housing asset you are buying. You also fail to mention the erosion of this fixed mortgage in real terms due to inflation. Additionally you fail to mention the fact that rents mostly go up, very rarely down.

Perhaps the real problem is that you would today be paying 4.5% against a market of perhaps 3% and thus overpaying by 50% on the interest portion of your prospective house purchase.

mjh421

brit1234 wrote: »

Well it is, clearly, or have you been in a cocoon the last 13 years.

Reasons it was Labours fault.

1, When giving the Bank of England independance, they changed the inflation measure from RPI to CPI. CPI did not cover house prices unlike RPI and when house price inflation went crazy interest rates were not risen to counter this like with RPI.



The Bank of England uses the CPI to work out its inflation targets whilst the Government uses the RPI to calculate Pensions and other state benefits hence the inclusion of housing costs . It goes without saying that the movement in consumable items prices are in massive turmoil, therefore unless you expect a chancellor to visit every outlet of consumer activity and to intervene in pricing everything, what would any sensible person conclude other than times these days change far too rapidly to make a rational judgment over the long or short term.




2, Labour also gave tax breaks to buy to let investors, combined with the rapidly rissing and unchecked housing inflation, they generated mass housing speculation with a new breed of investors. Pricing out first time buyers.


There is more to housing than first time house buyers, therefore, other sections of the housing market require different approaches all having their individual impact. Not necessarily for the better but never the less still require attention.


3, Rather than work to contain house price inflation they found new ways to increase it through shared ownership and homebuy schemes. This allowed builders to main tain high prices even when the economic bubble started to burst.

How do you think they should contain house prices in a market economy?


4, They were warned by experts that this wrong and chose to ignore it. This included multiple letters from Fred Harrison and speaches from Vince cable.

5, Gordon brown has now got rid of the BOE independance on interest rates and is keeping them low despite CPI now way above target. It amkes me sick that he promissed none political interference on interest rates 13 years ago and now is abussing them to the detriment of the country to stay in power.

I note that you ignore the real issue of what is possible to contain house price inflation by not accepting that house purchase is in it's self inflationary.
That is what gives home ownership it's appeal. That is as an investment.
I have also often referred to to the cost in interest payed over the duration of the mortgage, depending on the income and the amount of mortgage the real return on investment must today be negligible if non existent.
It therefore begs the question as to why anybody should be thinking of buying under such conditions.

First time buyers DON'T vote for more of the same with Labour.

The sad facts are your Vince Cable has been found wanting when it comes to being honest!!!!!