Britain 'can not afford another housing boom' - Minister

Wookster

Britain 'can not afford another housing boom'
Britain can not afford to allow another housing boom, the housing minister said last night.

Grant Shapps said the country was in need of long-term stability in the housing market, and warned that another sharp rise in prices would result in "a lost generation of home buyers".
He also attacked the previous Labour government for overseeing a ten-year surge in the cost of homes.

Mr Shapps told Channel 4 News: "If you allow a housing boom as they [Labour] did between 1997 and 2007 to get out of control, this is the kind of mess you end up in.
"It is in everyone's interest to have stable house prices for a long time, because the only way we can make sure housing is more affordable for future generations is not to have these crazy housing booms.
"We can't go on as a nation thinking that housing is something too expensive for regular people."
Separate research suggested 200,000 first-time buyers – a key component of the housing market – have been excluded from the market during the past four years.
The findings by insurer Genworth Financial blamed banks’ tighter lending criteria for the decline and suggested it will take a decade to fix the problems in the mortgage market.

http://www.telegraph.co.uk/finance/personalfinance/8057907/Britain-can-not-afford-another-housing-boom.html

Hamish... oh dear. Hope you were sitting when you read this.

Cleaver

Ahh, it reminds you of the days when the last government promised to put an end to boom and bust too. It's quite sweet.

DervProf

The Minister is right.

The Minister is also part of a government that has got the power to do something about it. Whether they do is another matter.

Any reasonable individual with common sense will agree with the comments -

"It is in everyone's interest to have stable house prices for a long time, because the only way we can make sure housing is more affordable for future generations is not to have these crazy housing booms.
"We can't go on as a nation thinking that housing is something too expensive for regular people."



Bearing those words in mind, consider the comments made by certain people on this forum, who celebrate HPI, and mock those who either haven`t bought a property, or like myself, have bought a property but can see beyond self interest.

Kohoutek

Britain literally can't afford another housing boom unless the FSA's proposed new lending rules are significantly watered down:

According to a Council of Mortgage Lenders’ study, the rules – which include affordability tests and a requirement to prove all income – would have prevented half the home loans made between 2005 and 2009 ever being approved. Estimates showed that 3.8m “good” loans – on which borrowers are meeting repayments without difficulty – would not have been granted.

http://www.ft.com/cms/s/2/653349c6-d302-11df-9ae9-00144feabdc0.html

I guess they must be revised a bit though because the quote from the FT sounds ridiculous, but they'll probably still be much stricter than the old system.

Blacklight

Not another boom is not the same as a crash.

Clutching a straws a bit aren't you?

doire_2

Cleaver wrote: »

Ahh, it reminds you of the days when the last government promised to put an end to boom and bust too. It's quite sweet.

Ahhh but this surely government will have learnt a lesson after the biggest economic mess since the 1920's nearly ruined the country

DervProf

doire wrote: »

Ahhh but this surely government will have learnt a lesson after the biggest economic mess since the 1920's nearly ruined the country

Of course they will.

puddy

has anybody here honestly ever got a mortgage without showing income then? i must be in the minority then as all the mortgages ive ever had have come with a request for bank statements, payslips and proof of credit cards etc

ILW

Blacklight wrote: »

Not another boom is not the same as a crash.

Clutching a straws a bit aren't you?

A very slow crash ( nominal prices staying the same for an extended period) could be engineered.. Not sure if that would officially be called a crash though.

des_cartes

ILW wrote: »

A very slow crash ( nominal prices staying the same for an extended period) could be engineered.. Not sure if that would officially be called a crash though.

It will be 10% a year which may be achieved 5% real and 5% inflation but it will happen. The government are in effect saying that high house prices are not good. Not good for people wanting to buy a house and not good for the economy. Housing as an investment is history.

ILW

des_cartes wrote: »

It will be 10% a year which may be achieved 5% real and 5% inflation but it will happen. The government are in effect saying that high house prices are not good. Not good for people wanting to buy a house and not good for the economy. Housing as an investment is history.

Does seem that overall that situation would produce many more "winners" than "losers". If overall housing costs were to fall I believe the economy would be in much better shape. eg. More disposable income, less benefits being paid etc etc.
Sure many will disagree though.