House price rises 'must stop'

grizzly1911

"The return of booming house prices leaves Britain at risk of “repeating the mistakes of Gordon Brown” and will force the Bank of England to intervene, a Cabinet minister has said.
Vince Cable, the Business Secretary, widened a split in the Coalition by describing increases in house prices in the South as a “worrying” development that threatens Britain’s economic gains.
Mark Carney, the Bank Governor, is preparing to step in to “deal with” rapidly rising house prices, he suggested, in remarks that escalate his dispute with David Cameron and George Osborne over the housing market"......


Mr Cable warned that a rising house market was not enough to restore the economy to health. “If we are going to get a recovery it has to come through exports and British industry, not property inflation,” he said

http://www.telegraph.co.uk/finance/personalfinance/houseprices/10550353/House-price-rises-must-stop.html

He's only an old duffer, allegedly, what does it matter?

AndyGuil

The rises are occurring due to lack of supply. There will always be pockets of rises where additional supply is difficult to produce such as in cities but growing them outwards and adding properties across the country is the way to stabilise the price rises. Intervening into a free market in other ways is likely to make things unstable. There is a bit of an obsession going on with HTB2 but that is very minor in the volume of house purchases there are now. The building industry is benefitting from the rises at least. Perhaps it will make more areas profitable to build on.

CKhalvashi

AndyGuil wrote: »

The rises are occurring due to lack of supply. There will always be pockets of rises where additional supply is difficult to produce such as in cities but growing them outwards and adding properties across the country is the way to stabilise the price rises. Intervening into a free market in other ways is likely to make things unstable. There is a bit of an obsession going on with HTB2 but that is very minor in the volume of house purchases there are now. The building industry is benefitting from the rises at least. Perhaps it will make more areas profitable to build on.

The building industry would benefit more from an additional 2000 properties a week being built and prices dropping. Everyone would benefit from prices in most areas that are in line with what people actually earn.

Only issue is that the Tories have set this up so it can't happen without possibly disastrous results........

HAMISH_MCTAVISH

Carl Astorri, senior economic advisor to the EY ITEM Club, said fears of a bubble "look – at best – premature".

"Activity remains well below peak levels on all measures and price increases are also still much lower outside of London and the South East.

And while gross lending has picked up nicely over the past six months, there has also been a step up in repayments suggesting that rather than building up more debt, a lot of households are using low interest rates to deleverage.

“The next couple of months’ data will be interesting as the mortgage lending part of Funding for Lending Scheme comes to an end. This was very important in kick-starting the recovery in lending in late-2012 but we suspect that it lessened in importance as time went by and do not expect the removal of the mortgage incentives to have a significant impact on lending levels.”

http://www.telegraph.co.uk/finance/economics/10548381/Bubble-fears-as-house-prices-jump-most-in-four-years.html

AndyGuil

CKhalvashi wrote: »

The building industry would benefit more from an additional 2000 properties a week being built and prices dropping. Everyone would benefit from prices in most areas that are in line with what people actually earn.

Only issue is that the Tories have set this up so it can't happen without possibly disastrous results........

Unfortunately many areas can't be built on because they aren't profitable or profit is too low for the risk. The houses are selling which means they are aligned with what people earn, just not everyone. Home ownership isn't for everyone though, we already see this in Europe.

CKhalvashi

AndyGuil wrote: »

Unfortunately many areas can't be built on because they aren't profitable or profit is too low for the risk. The houses are selling which means they are aligned with what people earn, just not everyone. Home ownership isn't for everyone though, we already see this in Europe.

I live in an expensive part of England, which was why the suggestion was made. I meant for certain parts/cities, not the whole country.

There's often a £100k difference between spending nothing and spending £20k on renovation here, and for obvious reason it's not sustainable.

I do, on the other hand, understand that in some (most) parts of the country, what I've suggested isn't possible for the reasons you gave.

CK

moneyinmypocket

Surely house price rises are a good thing and must not be stopped. Also for people just starting out there are always bargins to be snapped up. I think the expectation of what peoples first house is like are to high. Many great home owning legends started out in small places.

CLAPTON

grizzly1911 wrote: »

"The return of booming house prices leaves Britain at risk of “repeating the mistakes of Gordon Brown” and will force the Bank of England to intervene, a Cabinet minister has said.
Vince Cable, the Business Secretary, widened a split in the Coalition by describing increases in house prices in the South as a “worrying” development that threatens Britain’s economic gains.
Mark Carney, the Bank Governor, is preparing to step in to “deal with” rapidly rising house prices, he suggested, in remarks that escalate his dispute with David Cameron and George Osborne over the housing market"......


Mr Cable warned that a rising house market was not enough to restore the economy to health. “If we are going to get a recovery it has to come through exports and British industry, not property inflation,” he said

http://www.telegraph.co.uk/finance/personalfinance/houseprices/10550353/House-price-rises-must-stop.html

He's only an old duffer, allegedly, what does it matter?

the old duffer is absolutely right

we need more profitable UK companies

the pro business LIb-Dems will pass a law ensuring this happens: Nick will tell us it's only the conservatives/labour axis that are stopping this.

wotsthat

As soon as I saw the thread title I knew it would be Vince Cable aka King Canute.

I feel a bit sorry for the him and the way he is willing to trade credibility in exchange for media time.

Jason74

AndyGuil wrote: »

Home ownership isn't for everyone though, we already see this in Europe.

This is a point that's often made, and would be very valid but for the massive difference in how private renting works in the UK compared to most of the rest of Europe. In countries in Europe where long term renting is more "normal", you generally have regulated rents, and secure long term tenancies. These enable tenants both to have a degree of security of tenure and certainty of long term costs that private tenants in the UK simply don't have with the assured shorthold model.

If we want to move to a housing structure where longer term renting is both common and "fair" in the way it is in much of Europe, then we need some fairly radical reform of the private rented sector in the UK to make it work more in line with the "European" model.

Jason74

wotsthat wrote: »

As soon as I saw the thread title I knew it would be Vince Cable aka King Canute.

I feel a bit sorry for the him and the way he is willing to trade credibility in exchange for media time.

He is 100% right on this one though.

That said, I do have an issue with Cable regarding why, as a government minister, has he not done more to bring this about. Surely he should either have had more success in influencing policy, or resign on the basis that the policies being implemented are not something he can support.

You're right in that he does lose credibility by being part of a government, and then criticising it's policies in the media. This is a shame, given that although he is very much swimming against the tide, he's right more often than not imho.