Anatole Kaletsky - Osborne's house price boom likely to work

wotsthat

If we have a shortage of houses then some more need to be built.

We could, as taxpayers, dip our hands into our pockets and the government could put the building out to tender. Anyone that can't afford a house could then move in to the taxpayer built house and the taxpayer will likely subsidise the rent. At some point in the future the tenant's vote will be needed so they'll get a significant discount to buy.

Alternatively we could encourage new building by ensuring credit is available to potential buyers and, rather than the taxpayer taking all the risk, it's shared. The huge leverage seems to be no more than ensuring 95% mortgages are available.

As a taxpayer I prefer the second option - at least there's a chance that I won't be on the hook to tidy up the mess.

There's an economic recovery, of sorts, underway and a shortage of housing - prices were rising anyway. People will have to get used to spending bigger proportions of income on housing by the looks of it.

Graham_Devon

wotsthat wrote: »

Alternatively we could encourage new building by ensuring credit is available to potential buyers and, rather than the taxpayer taking all the risk, it's shared. The huge leverage seems to be no more than ensuring 95% mortgages are available.

Or, heres a nother through, instead of "encouraging" (as this hasn't worked), why don't we find some way to force the building?

Could relate to point 1 in your post.

HAMISH_MCTAVISH

Graham_Devon wrote: »

why don't we find some way to force the building?.

You can't force people or companies to build/sell at a loss, or even to build more houses than they can sell in a reasonable time frame.

That would be daft, and just result in putting them out of business.

If you just increase the supply of land with planning, but don't increase the supply of mortgages and development finance, then there still will not be an increase in building.

You could, I suppose, combine a massive increase in availability of mortgage lending and development finance with policies designed to increase the supply of land with planning permission.

And then hope that prices rise by less than inflation...

Which seems to be what the government is doing now.

wotsthat

Graham_Devon wrote: »

Or, heres a nother through, instead of "encouraging" (as this hasn't worked), why don't we find some way to force the building?

Could relate to point 1 in your post.

...because it'll turn into a political pantomime funded solely by the taxpayer.

Governments these days seem to struggle with the basics - organising a compulsory building programme will beyond them.

wotsthat

HAMISH_MCTAVISH wrote: »

You could, I suppose, combine a massive increase in availability of mortgage lending and development finance with policies designed to increase the supply of land with planning permission.

And then hope that prices rise by less than inflation...

It's the 'hope' that people struggle with - they expect everything to come with a guarantee of 'and they all lived happily ever after'.

Graham_Devon

HAMISH_MCTAVISH wrote: »

You can't force people or companies to build/sell at a loss, or even to build more houses than they can sell in a reasonable time frame.

You miss the point.

Council housing. HA housing.

There is great demand for this. Theres nothing to "sell". Theres no "loss" to be made.

Thrugelmir

wotsthat wrote: »

There's an economic recovery, of sorts, underway and a shortage of housing - prices were rising anyway. People will have to get used to spending bigger proportions of income on housing by the looks of it.

The lenders that participating in the Funding for Lending scheme are in net overall terms lending less. All these schemes are merely papering over the lack of funding available. As banks continue to rebuild their balance sheets.

Potentially a perfect storm brewing if these schemes finish in 2015/16 and interest rates rise at the same time.

chewmylegoff

Am I supposed to know who Anatole Kaletsky is?

ruggedtoast

chewmylegoff wrote: »

Am I supposed to know who Anatole Kaletsky is?

It rhymes with 'hunt'. (In my humble opinion)

Graham_Devon

wotsthat wrote: »

It's the 'hope' that people struggle with - they expect everything to come with a guarantee of 'and they all lived happily ever after'.

This is amusing, considering the majority of your posts focus on extracting the best possible scenario of any given situation in order to suggest it will all be OK.