A Bull's Perspective

macaque_2

So the statistics out today from the National Housing Federation, which reveal the yawning gap between earnings and the cost of buying a property in the South West, are about as good an indication as we can expect of just how difficult it has now become for an ordinary family to get a home of their own in Devon or Cornwall.

For every struggling couple stuck in unsuitable rented accommodation or bedding down on a friend's sofa, there are many dozens here in the South West who have done well out of property price inflation.

but not everyone who used the growing value of their home as the means to raise cash acted recklessly

and helping even those on modest incomes in ordinary jobs build up some wealth to either realise when they sell-up or pass on to their children

We don't want to see that destroyed by chronic instability in the housing market or plunging values, however much it might seem, at first glance, to help those who currently cannot afford a home.

http://www.thisisplymouth.co.uk/regionalnews/served-crash-West-house-prices/article-3296274-detail/article.html

This is the classic 'I want to help homebuyers so long it does not affect my windfall profits'. What they fail to explain is how this 'wealth' can be sustained if the next generation cannot afford these prices.

The 70% club subscribes to Newton's Law of Gravity.

geneer

Another bulls perspective...

Graham_Devon

Sounds like that writer is a bit scared of losing his/her built up property wealth.

"We understand that you cannot afford houses, and we have loads of cash, but seriously, lower prices are bad for you....look into my eyes....lower prices are bad for you.

Funnily enough, near to the area of that paper, theres been plannin going on for ages for a whole new town development. Vested interests have now joined up with green campaigners to try and stop it. Fear for loss of wealth through lower prices if more housing is availiable is rife in the council.

HAMISH_MCTAVISH

A very sensible article, which reflects the opinion of the majority quite well.

This is not just "a bull's perspective".

It's the perspective of all sane people......

Wishing for a crash to resolve affordability issues for the young is like wishing for a 3rd degree facial burns to cure teenage acme.....

No one would be served by a crash in West house prices

To get a true picture of property price movements they need to be measured over a long period. So the statistics out today from the National Housing Federation, which reveal the yawning gap between earnings and the cost of buying a property in the South West, are about as good an indication as we can expect of just how difficult it has now become for an ordinary family to get a home of their own in Devon or Cornwall. With that in mind some would-be house-buyers might look at the current statistics which show a fall, albeit unspectacular, in the price of property over the past year and take heart. But they would be wrong to read too much into the figures or to imagine that a property price crash is – in the end – going to do anyone any good.

For every struggling couple stuck in unsuitable rented accommodation or bedding down on a friend's sofa, there are many dozens here in the South West who have done well out of property price inflation. And the wealth they have made has helped to underpin the Westcountry economy over the past decade, when they have borrowed against the value of their homes or down-sized to free up capital. The financial crisis can be blamed, in part, on unsustainable borrowing but not everyone who used the growing value of their home as the means to raise cash acted recklessly. The fact that, despite the financial difficulties of the past few years, most of those homes retain pretty much all of their value is one of the things that is preventing the economic crisis escalating out of control once more.

So tempting as it might seem for home-buyers if prices crashed the overall impact, particularly here in the South West, would be catastrophic. Negative equity, a nose-dive in financial confidence and billions wiped off the value of ordinary people's biggest assets are not sacrifices worth making to enable those who currently feel excluded to buy a home of their own. That doesn't mean, however, that we don't need urgent action to help would-be property purchasers. If they are in steady employment, can manage a modest deposit and meet sensible monthly mortgage payments they should be afforded the same opportunities their parents had.

A whole range of measures, from building more homes aimed at local people, offered under part-rent, part-buy schemes, to restricting, perhaps through the planning process, the number of second homes in the most favoured areas, ought to be used. Local authorities must play their part – as many are already doing – and the need for social housing with rents set in line with local earnings must be met. The home ownership model, which is stronger in Britain than in many other parts of Europe, has been responsible for improving the appearance of many communities, building pride in the way people feel about where they live and helping even those on modest incomes in ordinary jobs build up some wealth to either realise when they sell-up or pass on to their children.

We don't want to see that destroyed by chronic instability in the housing market or plunging values, however much it might seem, at first glance, to help those who currently cannot afford a home.

B_Blank

HAMISH_MCTAVISH wrote: »

A very sensible article, which reflects the opinion of the majority quite well.

This is not just "a bull's perspective".

It's the perspective of all sane people......

Wishing for a crash to resolve affordability issues for the young is like wishing for a 3rd degree facial burns to cure teenage acme.....

Summary of what you quoted:

Guy just wants young people to be able to buy his overpriced house so he can maintain his wealth.

ILW

HAMISH_MCTAVISH wrote: »

A very sensible article, which reflects the opinion of the majority quite well.

This is not just "a bull's perspective".

It's the perspective of all sane people......

Wishing for a crash to resolve affordability issues for the young is like wishing for a 3rd degree facial burns to cure teenage acme.....

Would you think that nominal prices staying flat, with inflation running at around 2 or 3% over the next 10 years or so could help solve the affordability problems without the pain of a crash?

nearlynew

I see that the spring bounce is going well.

HAMISH_MCTAVISH

ILW wrote: »

Would you think that nominal prices staying flat, with inflation running at around 2 or 3% over the next 10 years or so could help solve the affordability problems without the pain of a crash?

Yes.

An adjustment in real terms would be of no real harm to the economy or the majority, whilst still helping affordability for the young.

I'd have no issues with that. But I doubt they can pull it off. The pressure of the next boom is building by the day, and unless we build millions more houses very quickly it's inevitable.

HAMISH_MCTAVISH

nearlynew wrote: »

I see that the spring bounce is going well.

You must lend me that time machine one day....

We won't know that until the April data releases at the earliest.

chucknorris

nearlynew wrote: »

I see that the spring bounce is going well.

I think I can handle one or two bad springs, there were plenty good ones between 1996 and 2006

geneer

HAMISH_MCTAVISH wrote: »

A very sensible article, which reflects the opinion of the majority quite well.

This is not just "a bull's perspective".

Does rather seem to forget that the majority opinion in 2007 was: Prices-can-only-go-up-buy-now-before-you-miss-the-boat.
Look how that turned out.

I guess its easier to run with the herd for some.