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Debate House Prices
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Who is responsible for the cost of house?
Comments
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Graham_Devon wrote: »Banks assess applicants too.
Currently there is no requirement to assess someone buying an axe.
There are assessments for many things though. Normally due to the ability to cause harm to either an individual or society itself.
So banks don't just manufacture credit. A fundamental part of their role is to assess whether the person is able to afford that credit. Just as the fundamental role of a driving examiner is to assess whether the person is safe to be on the road.
Quite a few similes there GD
Just as the driving examiner passes the testee, they are not culpable if the person has an accident in the next 40 years.
Just because a person can afford a property, it does not mean that their circumstances could change.
With regards to all this, its been a while since I checked, but last I checked the default rate was pretty low in terms of mortgages issued.
Not really a factor in high prices then.
Back to Supply I guess.:wall:
What we've got here is....... failure to communicate.
Some men you just can't reach.
:wall:0 -
IveSeenTheLight wrote: »With regards to all this, its been a while since I checked, but last I checked the default rate was pretty low in terms of mortgages issued.
You've taken my simple point that banks don't just create credit, but are the gatekeepers in law to it too and extrapolated it somewhat. Of course you are right, but all the points you raise are nothing really to do with the point I made.
As for the quoted paragraph..... you've just asked me on another thread whether I'd prefer the government didn't subsidise mortgage rates for people. So that should answer your own point really....or at least have someone as intelligent as yourself you questioning why repo rates are so low instead of merely making a statement and not looking at the reasoning.
The housing market has seen stimulus and support on a scale never seen before. It would take something of a miracle to see repossessions rise at the same time.0 -
Graham_Devon wrote: »You've taken my simple point that banks don't just create credit, but are the gatekeepers in law to it too and extrapolated it somewhat. Of course you are right, but all the points you raise are nothing really to do with the point I made.
As for the quoted paragraph..... you've just asked me on another thread whether I'd prefer the government didn't subsidise mortgage rates for people. So that should answer your own point really....or at least have someone as intelligent as yourself you questioning why repo rates are so low instead of merely making a statement and not looking at the reasoning.
The housing market has seen stimulus and support on a scale never seen before. It would take something of a miracle to see repossessions rise at the same time.
I would recommend that you make life's decisions based on reality and the reality is that there has been stimulus and support as you put it, which is where the market is now.
Is it likely to change? What do you think?
Until there is a significant change in the supply or demand base, then there will always be pressure on high prices and requests for government to support it
P.s. I prefer not to cross threads and it's simpler to follow one threads points, even if occasionally it merits some replication:wall:
What we've got here is....... failure to communicate.
Some men you just can't reach.
:wall:0 -
Graham_Devon wrote: »Banks assess applicants too.
Currently there is no requirement to assess someone buying an axe.
There are assessments for many things though. Normally due to the ability to cause harm to either an individual or society itself.
So banks don't just manufacture credit. A fundamental part of their role is to assess whether the person is able to afford that credit. Just as the fundamental role of a driving examiner is to assess whether the person is safe to be on the road....a fundamental role of a psychiatrist working in an institution is to assess whether someone is a danger to society or themselves etc.
So what?
Banks manufacture a product. That product is credit. They sell it to anyone who can afford it. It's then none of their business what the customer does with it. They neither need nor want to know.
Axes, same thing.0 -
Currently there is no requirement to assess someone buying an axe.
I guess there are laws on fireworks, but not knives, axes, blades etc.0 -
It's then none of their business what the customer does with it. They neither need nor want to know.
For mortgages that simply isn't true.
Banks want to know
a) it's for property - because that's low risk when they insist on a valuation
b) it's a sound property - that's why they insist on a survey
They do have responsibilities and do need to care and keep paperwork otherwise they have to pay fines and refunds for mis-selling.
Other credit products are less regulated but much higher cost and not practical (for cost reasons) for most people to buy a house with.
Banks do have responsibilities in law - both to customers (that's why we have such things as KEY FACTS) and also to society/the governement e.g. avoiding money laundering.
Your post is simply wrong I'm afraid.0 -
Can you really sell an axe to a child? (serious question)
I guess there are laws on fireworks, but not knives, axes, blades etc.
No. Mr Devon is wrong. Again.
S141A Criminal Justice Act 1988 regarding the Sale of knives and certain articles with blade or point to persons under sixteen. It specifically mentions an "axe"0 -
So banks and DIY comapnies all have certain statutory responsibilities and a lot of rubished being spouted on here - who have though it?0
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For mortgages that simply isn't true.
Banks want to know
a) it's for property - because that's low risk when they insist on a valuation
b) it's a sound property - that's why they insist on a survey
They do have responsibilities and do need to care and keep paperwork otherwise they have to pay fines and refunds for mis-selling.
Other credit products are less regulated but much higher cost and not practical (for cost reasons) for most people to buy a house with.
Banks do have responsibilities in law - both to customers (that's why we have such things as KEY FACTS) and also to society/the governement e.g. avoiding money laundering.
Your post is simply wrong I'm afraid.
Yes yes.
My point is that banks manufacture credit and as long as you can afford it they'll sell it to you. Making sure the security is good enough is protecting their own position and making sure they've ticked all the little FCA boxes is protecting their own position, but if having done so you take the credit and use it to bid houses up or do something otherwise stupid, they couldn't care less.
What they have to care about is default and regulatory risk, i.e. their own position. They are not obliged to warn you off spending credit in a certain way because HPCers might not like it. The credit crunch was the fault of stupid borrowers and inept regulators, not banks, who by and large did what banks do.
For the literal of mind, if a 5-year-old child attempts to buy an axe or anything else from a garden centre that they could hurt themselves with the garden centre shouldn't sell it to them, but if a normal adult buys an axe then slaughters a bus queue there is no claim against the garden centre.
Likewise banks. If they've given you credit legally it's then your lookout.0 -
Ive thought the same as op in the past.
I thought there might be more comments discussing land costs, cost associated with increases energy efficiency requirements (including glazing), costs associated with providing a proportion of 'affordable' housing on each development plot, costs associated with other planning requirements such as accomodating disabled access to entrances, toilets etc....
There must be a legitimate reason a new house costs such a wildly high amounts? Otherwise market economics should dictate that supplier x will undercut supplier y if margins become high enough that supplier x can still make a reasonable profit at 5% less than supplier y charges?
Undoubtedly the market has been propped up to an absurd degree over the last decade or so by banks and politicians. Pushing prices higher and higher... but if there was a easy answer to cut costs surely somebody would do it?0
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