Britain 'can not afford another housing boom' - Minister

DervProf

HAMISH_MCTAVISH wrote: »

I take it you see the insanity of that approach?

And there`s nothing insane about lending more and more money, to more and more people, to buy a commoditiy that is in restricted supply ?

DervProf

HAMISH_MCTAVISH wrote: »

Your "solution"

I didn`t claim it was a solution. It`s more "damage limitation", or maybe not putting more money into the pockets of those who are lucky (or clever, I`ll give you that) enough to have bought property before shortgage pushed prices up (in combination with earlier lending practices).

Oh, and I`ll add that it also might prevent the banks getting into a spiral of lending ever larger amounts of money to borrowers, and therefore getting themselves into trouble. A familiar scenario ?

DervProf

And (I`m on a roll here), wouldn`t tighter lending restrictions have some effect on multiple ownership ? At least that would spread the ownership of property a little further, rather than allowing a few individuals (see the Wilsons, for example) buying many properties, on the back of equity from earlier purchases.

Percy1983

You have to consider part of the boom was anybody could get a mortgage, no need for a deposit and no big checks on your salary.

Now the 'rationing' is doing exactly what it is meant to, freezing out the financially inept.

I am now saving and will have no problem getting my deposit together and have an excellent credit history, now I won't be bidding against those who have no ability to cut back and save and generally shouldn't be buying houses.

This has been my point all along, I don't disagree with many being frozen out as they should be, I disagree with people like myself who have worked hard being froze out.

DervProf

Percy1983 wrote: »

You have to consider part of the boom was anybody could get a mortgage, no need for a deposit and no big checks on your salary.

Now the 'rationing' is doing exactly what it is meant to, freezing out the financially inept.

I am now saving and will have no problem getting my deposit together and have an excellent credit history, now I won't be bidding against those who have no ability to cut back and save and generally shouldn't be buying houses.

This has been my point all along, I don't disagree with many being frozen out as they should be, I disagree with people like myself who have worked hard being froze out.

Well said. I`d prefer to see less financially savvy people being unable to buy property than, for example, a lucky Scottish chancer buying property in an area of Scotland that happens to have higher HPI than a lot of other areas of the UK, who then spouts off that the banks need to lend more so that he can maintain the value of his investment.

HAMISH_MCTAVISH

DervProf wrote: »

not putting more money into the pockets of those who are lucky (or clever, I`ll give you that) enough to have bought property before shortgage pushed prices up

So better to use that money to fund banker bonuses?

Because it isn't helping FTB's..... They're equally screwed either way.

I must say, this all smacks of the politics of envy. You'll be putting the same amount of money into someones pocket anyway. The choice of pockets is either a property owner or a banker.

If it's the property owner, it might be a speculator, or it might be someones dear sweet old granny whose pension fund was raided by Gordon Brown. If it's the banker, well, it'll just be a banker.....;)

DervProf

HAMISH_MCTAVISH wrote: »

So better to use that money to fund banker bonuses?

Because it isn't helping FTB's..... They're equally screwed either way.

I must say, this all smacks of the politics of envy. You'll be putting the same amount of money into someones pocket anyway. The choice of pockets is either a property owner or a banker.

If it's the property owner, it might be a speculator, or it might be someones dear sweet old granny whose pension fund was raided by Gordon Brown. If it's the banker, well, it'll just be a banker.....;)

How about putting some money into the hands of businesses ? Remember those ? Before houses, businesses were the way most people made money and paid their way.

What a radical idea, eh ?

You might think the choice is between the property (prospective) owner or the banker. I obviously think a little more than you do.

HAMISH_MCTAVISH

Percy1983 wrote: »

now I won't be bidding against those who have no ability to cut back and save and generally shouldn't be buying houses.

So what about those who live in areas where rent is much higher than mortgage costs?

How are they supposed to save these big deposits?

This has been my point all along, I don't disagree with many being frozen out as they should be, I disagree with people like myself who have worked hard being froze out.

Ahhhh. I see.

So it's OK for lots of FTB's to be frozen out of the market.

So long as that FTB isn't YOU.

DervProf

HAMISH_MCTAVISH wrote: »

So it's OK for lots of FTB's to be frozen out of the market.

So long as that FTB isn't YOU.

Hamish, someone`s got to lose out if there is a limited supply of property. Why not give lower risk borrowers first bite of the cherry, rather than loosen lending criteria and put the whole financial system at risk ?

HAMISH_MCTAVISH

DervProf wrote: »

Well said. I`d prefer to see less financially savvy people being unable to buy property than, for example, a lucky Scottish chancer buying property in an area of Scotland that happens to have higher HPI than a lot of other areas of the UK, who then spouts off that the banks need to lend more so that he can maintain the value of his investment.

See, this is the bit you don't get.

Aberdeen has the highest average income in Scotland, but house prices are still affordable and rent is much higher than mortgage costs. Mortgage rationing didn't effect us that much as we have far more high earners (who remained eligible for mortgages), which is why our prices have recovered fully and reached a new peak already.

Ending mortgage rationing won't make much of a difference to me.

It will make a huge difference to the hundreds of thousands of FTB's locked out of the market, and for whom saving a £40,000 deposit is an impossible dream as rent is higher than mortgage costs in their area.