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Why Are The Goverment Telling People To Buy When They Know1

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Comments

  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    RHemmings, in a furnished or unfurnished let you get two months notice and then the landlord can start eviction proceedings. Even if you've been paying the rent all the time. Those who have a mortgage or who own their property don't have that two months and you're out risk. That's a significant inhibiting factor in doing lots of internal decorating (if the landlord lets you!) and buying lots of furniture and fittings to match a rented place.

    This is assuming an assured shorthold tenancy past its fixed term period.

    Owning a home or mortgage provides significantly more certainty.
  • Austin_Allegro
    Austin_Allegro Posts: 1,462 Forumite
    1,000 Posts Combo Breaker
    hearts wrote: »
    Thank god we have a tory government in waiting. All those Eton boys will really know how to help out the less well off. Experience being a great help when dealing with the problems of poverty, I just can't wait till the new blood gets in there and teaches us what they did at Eton and Harrow when times were hard. ;-)

    ...and of course nobody in the Labour government went to public school, nor sent their children to one....:rolleyes:
    'Never keep up with Joneses. Drag them down to your level. It's cheaper.' Quentin Crisp
  • Matt123
    Matt123 Posts: 42 Forumite
    Jamesd et all,

    So basically you want the government to come out in favour of a house price fall, in favour of people losing money they have invested in their properties, whether it be their own home or something they have invested in for their future, just so that you can buy them cheaper?
  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Matt123, those who bought a home to live in during the bubble years are a relatively small number compared to the roughly 200,000 who buy new build homes each year and would save money through lower prices for them.

    Doing something to lower prices beats more people being caught out by buying into the bubble. Maybe an increase in interest rates to fight inflation and help to reduce the bubble effect quickly. Or maybe releasing lots of the green belt land that has been added over recent years for building combined with liquidity lending from the BoE to property builders to produce a rapid large increase in the supply of new properties and lower prices via high supply and the prospect of more of it for many years.

    For those who bought to live in the place and find difficulty moving due to negative equity, there are approaches like government backed loans of the negative equity amount that have been proposed in the US and could be used here.

    Those who have just invested, rather than buying a home to live in, were speculating during a price bubble. There's no need to protect speculative investors - they chose to take an investment risk in a high risk investment at a high risk time. They can either sell in the short term at a loss or hold for the usual long term that property purchase is expected to be. No more need to protect these investors than those who lost money during the dot-com bust back in 2000.

    Those who did buy a home to live in would be fine, even if they did buy during the bubble, provided they could afford the payments. They just get to live in their home without seeing large paper windfall gains.
  • JimmyTheWig
    JimmyTheWig Posts: 12,199 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    jamesd, if it wasn't for you suggesting they build more homes on green belt then I would agree entirely and thank you for you post. As it is, I can't. Sorry.
  • mustrum_ridcully
    mustrum_ridcully Posts: 1,453 Forumite
    flygti wrote: »
    Your home is worth whatever people are willing to pay you for it. No more - no less.

    We still have to factor in the shortage of housing and the growing population along with the fact that the housing developers don't want to build any more houses in the current market.

    We are certainly in for a rocky ride but I don't believe we are going to have a 30% drop in value, but if we do then I think prices will regain the ground they lost fairly quickly when the crunch is over.

    However I am no expert and given the experts don't have a clue then what chance have I got! :rotfl:

    The Lib Dems a few years ago were say that there were some 750,000 EMPTY houses in Britain. That's enough to house all the people who've come here from Eastern Europe (2 to house).
    "One thing that is different, and has changed here, is the self-absorption, not just greed. Everybody is in a hurry now and there is a 'the rules don't apply to me' sort of thing." - Bill Bryson
  • Austin_Allegro
    Austin_Allegro Posts: 1,462 Forumite
    1,000 Posts Combo Breaker
    Matt123 wrote: »
    Jamesd et all,

    So basically you want the government to come out in favour of a house price fall, in favour of people losing money they have invested in their properties, whether it be their own home or something they have invested in for their future, just so that you can buy them cheaper?

    In the long run I think this approach would be better, yes - not just so that people can buy houses more cheaply but also because I think government policy should favour savers (which is good for national prosperity) rather than people who gambled money on property as an investment.

    I think what has annoyed people about this leak is that the government know that property prices will fall at least 5-10%, but at the same time they want to encourage first time buyers to buy into a depreciating asset. They are between the proverbial rock and hard place, they are trying to please opposing groups with muddle and obfuscation.
    'Never keep up with Joneses. Drag them down to your level. It's cheaper.' Quentin Crisp
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