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The Times warns of negative equity:
WTF?_2
Posts: 4,592 Forumite
http://www.timesonline.co.uk/tol/comment/columnists/alice_miles/article3768099.ece
Scandal of luring first-time buyers
Gordon Brown is acting immorally by asking for rate cuts that could lead to negative equity
..
Except the problem is not global. It's British. House prices in Britain, at six times average earnings, are too high. That's it. We all know that, we've known it for years. Property prices are nonsensical, exorbitant, unaffordable, immorally inflated by investors and a shortage of available land space to build new homes, exploited by a greedy City.
..
Nothing could be more immoral, then, in the current climate, than using government efforts and taxpayers' money to encourage first-time buyers to enter the housing market in order to stabilise the dodgy situation that banks and incautious borrowers have got themselves into through overlending and overstretching themselves: row, row harder, keep us all afloat! Yet that appears to be what the Government's strategy is.
..
How dare a man who has lectured us all ad nauseam about prudence, year after year after year, now use our money to bail out the profligate? Times are tough, yes, but for most people they are tough in the day-to-day expenditure; in the purse, not the property portfolio. The pinch, for ordinary people, comes not from little falls in the nominal value of people's homes, but from day-to-day living costs: the food, the petrol, the gas and the council tax bills
Good stuff.
Scandal of luring first-time buyers
Gordon Brown is acting immorally by asking for rate cuts that could lead to negative equity
..
Except the problem is not global. It's British. House prices in Britain, at six times average earnings, are too high. That's it. We all know that, we've known it for years. Property prices are nonsensical, exorbitant, unaffordable, immorally inflated by investors and a shortage of available land space to build new homes, exploited by a greedy City.
..
Nothing could be more immoral, then, in the current climate, than using government efforts and taxpayers' money to encourage first-time buyers to enter the housing market in order to stabilise the dodgy situation that banks and incautious borrowers have got themselves into through overlending and overstretching themselves: row, row harder, keep us all afloat! Yet that appears to be what the Government's strategy is.
..
How dare a man who has lectured us all ad nauseam about prudence, year after year after year, now use our money to bail out the profligate? Times are tough, yes, but for most people they are tough in the day-to-day expenditure; in the purse, not the property portfolio. The pinch, for ordinary people, comes not from little falls in the nominal value of people's homes, but from day-to-day living costs: the food, the petrol, the gas and the council tax bills
Good stuff.
--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.
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Comments
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yep. about sums things up.
one thing that puzzles me though: no-one has mentioned the 'moral jeopardy' rule.
strange, that.miladdo0 -
Morality is so 20th Century
it's all about socialism for the rich now.It's a health benefit ...0 -
Alice Miles, if you are reading this, I just want you to know that I love you!0
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(coming to the end of a fixed-rate deal? Tough. What part of Two-Year Fixed Rate didn't you understand?).
Love this sentance; would like to put it on every post on the mortgage board.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
An excellent article.
I still hope that when BoE offer to lend on secured mortgage debt to ease liquidity, they give priority too those banks who have either had a rights issue or divident cut, so at least shareholders share the pain with the taxpayer.
How long will it be before the majority realise that the "credit crunch" is merely the trigger for falling house prices & that the real problem was over valued housing and slack lending in the first place.US housing: it's not a bubble
Moneyweek, December 20050 -
Welcome to Capitalism.Peter0
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Exactly caused by the banks themselves (their property valuers) and the EA's they are in bed with.kennyboy66 wrote: »that the real problem was over valued housing and slack lending in the first place.0 -
pickles110564 wrote: »Exactly caused by the banks themselves (their property valuers) and the EA's they are in bed with.
Damn those banks for forcing the public to borrow large amounts of money to buy overpriced properties.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
excellent read, sums it up to a T.
That article makes me want to print it out and ram it down someones throat when they say "house prices wont drop - they never drop - gordon brown has lent extra money to the banks etc etc" which is what im hearing off people from work who are trying to sell their 2nd/BTL homes.
WAKE UP AND SMELL THE COFFEE0 -
That's nice wishing others misfortune, remember you reep what you sow
It's little different to some of the posters here sneering at people for not being in a position to get on the housing ladder at the right time..... or BTL owners pontificating how well their multiple BTLs are doing when the effect of their ill-advised over-leveraging is to have priced regular families out of owning their own home.
The majority of losers when house prices fall will be speculators who took a gamble. I feel sorry for the genuine people who just wanted to own their own home and took bad advice to buy into an overinflated market but they should be blaming the chancers who borrowed, borrowed, borrowed to speculate in the market.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0
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