BOE: "Not our job to regulate house prices"

ILW

shortchanged wrote: »

Any reason why the government couldn't build thousands of houses and sell them at cost or for just a tiny little profit?

Is that going to cost the taxpayer?

Seeing as the government is happy to interfere in the mortgage market by guaranteeing loans via HTB.

Governments are so useless at anything like that that if they built and sold a twice market value, they would still make a loss.

Graham_Devon

HAMISH_MCTAVISH wrote: »

http://www.telegraph.co.uk/finance/personalfinance/houseprices/10395407/Not-our-job-to-regulate-house-prices-says-Bank-of-England-policymaker.html

Key question is....why come out and say it now?

The pressure to do something is building. This is just the BOE reacting to that pressure and saying "not our problem".

Doesnt mean the problem vanishes. Infact, it just means it get's worse.

Graham_Devon

Andy_L wrote: »

The only lever the BoE has is the interest rate.

All the other powers are in the hands of Government, eg:

1 Stamp duty
2 Encouraging/discouraging new builds & building flats vs houses vs mansions via the tax system
3 Council housing
4 Mortgage rationing
5 MIRAS reintroduction
6 Green belt expansion/contraction
7 Planning law
8 Compulsory birth control/euthanasia
etc etc

So I'd say its the governments job to do so or allow the market to find is natural point

Funding for Lending comes direct from the BOE. Something you haven't mentioned and something which is apparently making a huge difference to house prices.

It's somewhat bizzare that the BOE finds themselves stating they won't regulate the market when prices rise, but will create £130bn of funding for lending money for housing purchases to get the market moving when it falls.

smartn

Hooloovoo wrote: »

True, it could happen but given I'm "making hay while the sun shines" and trying to make my future as safe as possible - mortgage paid off, building up comfortable savings and pension pot, etc. - it would take a monumentally massive sequence of bad luck.

If they have "come out the other side" was it really bad luck, or did they just make bad/risky decisions? Who knows.

Whats so bad about working on a till etc? Perhaps people would rather do that than sit at home or work in a high pressure environment? I have a friend whose a qualified chemist and is much happier now working as a postman. Life isn't all about making as much money as you can....

grizzly1911

CLAPTON wrote: »

lets say a house costs about 200,000 to build
so £1 billion would build 5,000 house

lets say HB per typical property is about 12,000 per year (I've no real idea maybe some-one else knows a better figure)
so saving in HB would be £6 million per year


so £1 billion spend would save £6 million per year so would break even in 166 years



be a lot cheaper for the government to get rid of the infrastructure charges and 'affordable' housing levies and reduce the planning restrictions so it makes it possible for the private sector to build more properties at no cost to the taxpayer

It doesn't cost £200k to build a house.
HB will only rise year on year.
So pay back will be considerably shorter.

More properties built by the private sector that many individuals won't have a hope in hell of buying.

Have you got some land you want to shift?

grizzly1911

wotsthat wrote: »

It would be nice in theory but even those of us without a cynical bone in our bodies would find it difficult to believe that a housing building scheme directly controlled by politicians could be anything other than a disaster.

We can't even say that at least the houses would be built - in a generation they'll be referred to as Cameron's Kites because the roofs keep blowing off and be held in the same affection as a Glasgow tower block.

It has been done before or our current politicians not up to the job these days..

grizzly1911

Conrad wrote: »

Without an almost zero tolerant border service, no amount of building will solve the issue.

You have answered your question.

CLAPTON

grizzly1911 wrote: »

It doesn't cost £200k to build a house.
HB will only rise year on year.
So pay back will be considerably shorter.

More properties built by the private sector that many individuals won't have a hope in hell of buying.

Have you got some land you want to shift?

You can change the numbers to those appropriate in your area and come up with a different (better?) set of figures.

But is does show that whilst HB costs are high, we are not going to make a quick cash flow win, by state building lots of council housing.

I think we need to build more properties : I don't believe in the conspiracy theory of deliberate restriction on building to keep prices high (reasons given many times);
but do believe that if land with planning permission were made more freely available plus reductions on government taxes and costs, then far more houses could be built for the benefit of all.

Thrugelmir

shortchanged wrote: »

It looks as if nobody has learnt from the mistakes of the previous decade. We are potentially having a property led recovery, instead of a genuine recovery. It all has the potential to end in tears for many again.

Much has changed if you look beneath the surface. Unfortunately many don't.

Graham_Devon

CLAPTON wrote: »

so £1 billion spend would save £6 million per year so would break even in 166 years

While your sums are somewhat out I'd imagne, it's not all about the profit or how much it costs. However, on that note, you don't appear to have allowed for the asset wealth created. You've just looked at the cost of building and not looked at the asset wealth created.

But....

£1bn would also house 5,000 families in secure, healthy homes. Homes allowing people to start putting roots down in their local community.

It's not all about the money or the best investment. Though I realise on this we will likely forever disagree, so just putting my two cents in really rather than trying to change any mindsets.