FSA advisers urge delay to mortgage reform and more 'flexible' lending

shortchanged_2

Really2 wrote: »

But to stop a boom in house prices in terms of this debate (the belief population will increase and demand is there) you have to build more houses to stifle future demand.

So if you are happy for them to find a happy medium (like now say) you are happy for future and current generations to be priced out are you not?

I agree that more houses need to be built but I don't really see why a reduction in house prices prevents building.

What is it that drives house prices? It is the piece of land, the plot that fluctuates in value not the house itself because in general the house on the land stays the same whether the price goes up or down.

Were the building companies making profits when the average prices were say £100,000 as opposed to £160,000, yes they were.

Basically the government needs to make cheap land available for cheaper housing and the developers should not be allowed to sell the property at silly prices.

Really2

shortchanged wrote: »

I agree that more houses need to be built but I don't really see why a reduction in house prices prevents building.

What is it that drives house prices? It is the piece of land, the plot that fluctuates in value not the house itself because in general the house on the land stays the same whether the price goes up or down.

Were the building companies making profits when the average prices were say £100,000 as opposed to £160,000, yes they were.

Basically the government needs to make cheap land available for cheaper housing and the developers should not be allowed to sell the property at silly prices.

So not an open market but an artificially supported one by a government.

But on your last point that is why so many hate the boomers, is it now OK again to steal from future generations as many have put it?

Graham_Devon

I'm confused. What are people stealing if they do not want 30/40 year mortgages?

shortchanged_2

Really2 wrote: »

So not an open market but an artificially supported one by a government.

But on your last point that is why so many hate the boomers, is it now OK again to steal from future generations as many have put it?

I don't really see your logic Really2.

What do you mean by stealing from future generations?

I would like to see a stable housing market which starts with lower prices than now, banks maintaining strict lending criteria and house price rises and falls in general line with inflation.

How does that equate to stealing from future generations? Are you referring to people who bought during the boom years?

shortchanged_2

Really2 wrote: »

So not an open market but an artificially supported one by a government.

Also isn't this what the government is doing now with shared equity schemes?

Really2

shortchanged wrote: »

I don't really see your logic Really2.

What do you mean by stealing from future generations?

I would like to see a stable housing market which starts with lower prices than now, banks maintaining strict lending criteria and house price rises and falls in general line with inflation.

How does that equate to stealing from future generations? Are you referring to people who bought during the boom years?

OK if you sell land off below market value to enable cheaper houses it will mean the people who purchase those houses in theory should be able to buy at below market value. They should see the rise in the value of those homes being disproportionately higher for the first owner.

This is what boomers have been accused of getting cheap 70's housing right to buys etc.

Also if you sell land of cheap it means it is not there for future generations, it has dropped in to private ownership at a lower than market cost.

It is not hard to grasp that surely?
It is like the ebay ticket example, if a gig is sold out and tickets are getting £500 on ebay. If you printed 100 more and sold them on ebay for £30.
Have you now made every ticket affordable? would the tickets sold at £30 now be worth more (like say £500)?

If you sell public assets below market value you are robbing someone down the line I can assure you. (more than likely the people in the future who then require more building land).

What you are suggesting is future generations assets be sold off now to benefit a few now, the only gainers would be those that purchased the cheap houses built IMHO.

Really2

shortchanged wrote: »

Also isn't this what the government is doing now with shared equity schemes?

No the land is sold at market value the house is built HA buys half the member of the public buys half.

Where is the giveaway in shared equity?

shortchanged_2

So what is your answer then Really2 to have more affordable housing for future generations without them having to take out 100%+ mortgages or 35-40 year term mortgages?

shortchanged_2

Really2 wrote: »

No the land is sold at market value the house is built HA buys half the member of the public buys half.

Where is the giveaway in shared equity?

So who ultimately benefits from this?

Really2

shortchanged wrote: »

So what is your answer then Really2 to have more affordable housing for future generations without them having to take out 100%+ mortgages or 35-40 year term mortgages?

No not once have I said that.

I think it will be a balance of the lending tap being opened a bit more that could be from lowering LTV on some of the better deals or real term falls making affordability better. (most likely all at some point)
People have already said on here the demand is there and also seem to admit that it is the deposit size that is the issue (25%) not so much the cost to more houses being sold.

As soon as more houses are being sold more houses will be built. Once that reaches target levels it should reduce the chance of any future above inflation HPI.