George Osborne is reinflating house prices - and we couldn't be happier

ruggedtoast

http://www.telegraph.co.uk/finance/comment/10056926/George-Osborne-is-reinflating-house-prices-and-we-couldnt-be-happier.html

On the face of it, the mood change is surprising, given that real wages are still falling, the budget deficit remains gargantuan and the economy faces monumental problems that will take years to resolve. We are no longer at immediate risk of another recessionary dip, but a GDP growth rate of 1pc or so, a plausible number for this year, remains shameful by the standards of previous recoveries.

There is an answer to this conundrum, but it is depressing: Osborne’s strategy to reinflate house prices is paying off. This week’s Royal Institution of Chartered Surveyors survey showed the highest level of new house buyer enquiries for three years, while the Council for Mortgage Lenders’ figures were equally upbeat. Directing subsidised credit towards the housing market, as the Help to Buy and Funding for Lending Schemes are doing, is an absurd, reckless policy which suggests Osborne has learnt nothing from the sub-prime crash.

But while it is a gamble that will end in tears, it is rekindling homeowners’ animal spirits, and these still account for 65pc of households. A mere 8pc of people now expect homes in their areas to lose their value over the next year; most of the remainder believe they will go up and remain stable, in another dramatic shift in sentiment.

Another 5 - 10 years of misery then for hard working families desperate for secure tenure somewhere. Another decade of zombie banks with duff , state guaranteed loan books, and another payout for bankers bonuses and buy to let slum lords.

Percy1983

I really can't see the schemes causing any kind of boom.

With that if quite a few start buying overinflated new builds it would push the stats up but not real world prices.

ruggedtoast

If the government cared about ordinary people having affordable housing to live in they would build affordable housing for ordinary people to live in; its as simple as that.

Instead what they care about is ordinary people loading themselves up with ever larger amounts of debt to pay off Osborne's buddies in the City and keep the house builders sweet.

It is sickening and wrong and there is not one single mainstream politician calling the tories out on it.

Not Labour, who probably wish they'd thought of it, not Turncoat Clegg of the Weasel Democrats, not the Greens, who dont want any new housing; no one.

Its like I'm watching Gen X and Millennials being slowly and repeatedly mugged until the mugging has been IOU'd down to kids who arent even in school now and nobody in the spotlight is saying anything.

HAMISH_MCTAVISH

ruggedtoast wrote: »

Its like I'm watching Gen X and Millennials being slowly and repeatedly mugged .

I'm Gen X, and finished repaying my first mortgage 6 years ago, which was 8 years earlier than the original 25 year term.

My cousin is 8 years younger than me, is also Gen X, and is just about to finish paying off his mortgage too.

How were we mugged?

princeofpounds

Agreed, Gen X weren't mugged. The property boom ran roughly from 1992 to 2008. Gen X were probably mostly buying in the early to mid 2000s. They may not have coined it like the boomers, but they are pretty comfortable. For now.

HAMISH_MCTAVISH

princeofpounds wrote: »

Agreed, Gen X weren't mugged. The property boom ran roughly from 1992 to 2008. Gen X were probably mostly buying in the early to mid 2000s. They may not have coined it like the boomers, but they are pretty comfortable. For now.

Gen X started buying en-masse in the early 1990's....

The generation started with those born after the mid 60's.

From Wikipedia....

London newspaper The Guardian cited Generation X birth years as falling between 1965 and 1982 and wrote they were "labelled by some" as the "'me generation' of the Eighties."[41]

The Telegraph cited Generation X birth dates as falling into a longer time span (1965–1985),[42] whilst the The Independent estimated an earlier range of birth dates (1963–1978) compared to other writers or researchers.[43]

A BBC News article about a lack of "mid-career volunteers" in their 20s provided a Generation X age range, which, in 2007, would suggest birth years that fall between 1962 and 1982.[44]

ruggedtoast

HAMISH_MCTAVISH wrote: »

I'm Gen X, and finished repaying my first mortgage 6 years ago, which was 8 years earlier than the original 25 year term.

My cousin is 8 years younger than me, is also Gen X, and is just about to finish paying off his mortgage too.

How were we mugged?

Well you weren't, considering you had all the benefits of a fancy public school education and then got your mum to gift you a deposit for a house.

I mean other people. Normal people.

alleycat`

I'm not trying to pick sides on this because i can see it a bit both ways but who is supposed to pick up the "tab" when you bankrupt all these Gen X people by driving house prices down so they make a massive loss?

I can't see how anyone wins in that scenario?
I also don't pretend to have an answer to house prices one way or the other.

Edit: I just don't see it as black and white as a lot of people do on here.

TruckerT

alleycat` wrote: »

I'm not trying to pick sides on this because i can see it a bit both ways but who is supposed to pick up the "tab" when you bankrupt all these Gen X people by driving house prices down so they make a massive loss?

I can't see how anyone wins in that scenario?
I also don't pretend to have an answer to house prices one way or the other.

Edit: I just don't see it as black and white as a lot of people do on here.

I don't think anyone wants to drive house prices down - they just don't understand why there is still a body of opinion that escalating prices upwards is a good way to go.

TruckerT

ILW

alleycat` wrote: »

I'm not trying to pick sides on this because i can see it a bit both ways but who is supposed to pick up the "tab" when you bankrupt all these Gen X people by driving house prices down so they make a massive loss?

I can't see how anyone wins in that scenario?
I also don't pretend to have an answer to house prices one way or the other.

Edit: I just don't see it as black and white as a lot of people do on here.

I spent a good few years in the early 90s in negative equity. Wasn't too terrible, just kept paying the mortgage and living in the place.

alleycat`

TruckerT wrote: »

I don't think anyone wants to drive house prices down - they just don't understand why there is still a body of opinion that escalating prices upwards is a good way to go.

TruckerT

Might be the case but some of this "reads" as if house prices should be at least 50% cheaper and that would somehow be a good thing for everyone.

Also some of it reads that if all house prices quadruple it'll be a good thing too (exaggeration on my part).

Anyway it makes a good read if not always a great amount of sense, at least to my small brain.