Straw that broke the camels back?

grizzly1911

CLAPTON wrote: »

Now I can see why geting rid of the communities infrastructure levies and 'affordable housing' levies will help more houses being built

and I can see why the government changing the 'responsible lending ' rules will help

and I can see why abolishing stamp duty will lead to more property being built
but an overall drop of 20% in house prices?

I accept that some of the infrastructure and affordable levies get misappropriated but a lot doesn't and does go into preparing or repairing the damage done when new developments are inserted into communities. If the money is isn't available to use who pays to mitigate the impact?

I accept the Responsible Lending rules ware like throwing a car into reverse but are they actually bad principles. Surely sound lending should be what we need going forward. saddling people with debt burden that is too great doesn't do anybody any favours, particularly when interest rates are so low. Having the interest lever stuck against the stop effectively makes it ineffective.

How would removing stamp duty help more houses to be built? It would reduce the cost of the transaction slightly and would be a revenue stream lost. I do think the duty should be progressive and that the higher rates should only apply to the part of the transaction over the threshold because it creates artificial boundaries.

Carl31

ukcarper wrote: »

Explain I'm not sure I understand. make the same profit if they borrow at 1% and lend at 3% or borrow at 3% and lend at 5%.

Yes thats right, but if they only offer savers 3%, then investors will go elsewhere for returns

It was reported the other week that lending to SME's bas dropped by 8bn in the past couple of years. Thats a lot of companies that will struggle to grow, these are the companies that pay wages, or not as seen with the recent rise in unemployment

Graham_Devon

Seems I can add Channel 4 to the list too!

Hamish is currently slamming their reporters as sub par and of irrelevance! Seems they have taken the same line.

So that's the Beeb, Sky and Channel 4 when it comes to the TV all saying what we need is lower prices.

Must say...rather satisfying considering the only reason this has happened is due to massive stimulus policies!

grizzly1911

ukcarper wrote: »

Yes I agree that was also a reason but there was also the hope that business would be able to borrow at low rates.

If they are good viable propositions then the funding is available. In the current market banks aren't going to want to dish it out to all and sundry that trot in with hair brained get rich quick ideas. Similarly savvy business people aren't going to risk money when confidence is so low and a return may be difficult to achieve.

ukcarper

Carl31 wrote: »

Yes thats right, but if they only offer savers 3%, then investors will go elsewhere for returns

It was reported the other week that lending to SME's bas dropped by 8bn in the past couple of years. Thats a lot of companies that will struggle to grow, these are the companies that pay wages, or not as seen with the recent rise in unemployment

But the reasons SME's can't borrow has nothing to do with interest rates but more to do with banks trying to increase reserves and becoming more adverse to risk.

the_flying_pig

if i were a betting man i would bet that Help to Buy: mortgage guarantee will never happen, or else will be radically changed in a way that scales it down somehow.

it's just too stupid for words.

ukcarper

grizzly1911 wrote: »

If they are good viable propositions then the funding is available. In the current market banks aren't going to want to dish it out to all and sundry that trot in with hair brained get rich quick ideas. Similarly savvy business people aren't going to risk money when confidence is so low and a return may be difficult to achieve.

True but I can't see increasing interest rates will change that.

CLAPTON

grizzly1911 wrote: »

I accept that some of the infrastructure and affordable levies get misappropriated but a lot doesn't and does go into preparing or repairing the damage done when new developments are inserted into communities. If the money is isn't available to use who pays to mitigate the impact?

I accept the Responsible Lending rules ware like throwing a car into reverse but are they actually bad principles. Surely sound lending should be what we need going forward. saddling people with debt burden that is too great doesn't do anybody any favours, particularly when interest rates are so low. Having the interest lever stuck against the stop effectively makes it ineffective.

How would removing stamp duty help more houses to be built? It would reduce the cost of the transaction slightly and would be a revenue stream lost. I do think the duty should be progressive and that the higher rates should only apply to the part of the transaction over the threshold because it creates artificial boundaries.

It was a long winded way of saying that new build houses are poor value for money because of all these costs.

CIL and affordable housing levies have nothing to do with 'damage' caused.

New houses owners will pay council tax for 100 years... that is sufficient for the community to pay for any additional infrastructure necessary.

'Responsible' lending rules stop lots of totally credit worthy people affording property to the detriment of both themselves and the community

Stamp duty is a tax on mobility and a disincentive to people moving both up the chain and downsizing to the loss of both the individuals and of society in general.
You may consider 10k, 20k, 25k etc as 'slightly' but poorer people than you would maybe feel differently.

ukcarper

the_flying_pig wrote: »

if i were a betting man i would bet that Help to Buy: mortgage guarantee will never happen, or else will be radically changed in a way that scales it down somehow.

it's just too stupid for words.

Do we know exactly how it's going to work I'm not convinced George does

wotsthat

Graham_Devon wrote: »

Once the fall has happened and a plateau appears..

- The cost of trading up won't be as high. That means the cost of change and also the monthly cost on the mortgage. Therefore more may be able to actually move and buy, meaning builders can sell more houses.

- People would actually be able to afford mortgages, meaning builders can sell more houses (remember, it's the builders, Hamish, wotsthat etc that keep moaning that it's mortgages stopping houses being built)....therefore if more people can truly afford them....more houses will get built.

- People currently stuck, say all those young people living with mum and dad may now be able to afford a place of their own, increasing the demand that housebuilders could tap into and build more houses.

....and so on.

You don't need to go back too far in time to test this theory. What happened last time house prices fell significantly?

How many people traded up?

How many people got a mortgage whether they could afford it or not? Did building levels increase?

How many young FTB's left home to take advantage of the lower prices?

Don't really want to p**s on your fireworks because I can see you're really excited but it's a fantasy. A significant drop in prices would lead to lower transaction levels and a decrease in owner occupier levels. It's the usual problem - you can't see past the price tag.