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Post by staffordshrew on Jul 2, 2022 10:40:39 GMT 1
We've had this sort of thing before, allowing borrowers to borrow higher multiples of their earnings, taking into account both partner's earnings. All it leads to is it becoming the norm, everyone having to do it and house prices going up still further.
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Post by blazey on Jul 2, 2022 10:55:09 GMT 1
Another fantastic idea by our wonderful government.
Rather than tackle the real issues of affordable housing supply, let’s saddle children with enormous debts which they can add on top of their future student debts amidst falling living standards. Whilst we’re at it, let’s raise the pension age to 75 to make sure the banks get their wedge that they work so hard for...
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Post by frankwellshrews on Jul 2, 2022 11:06:54 GMT 1
Seems like a great grift for the banks, can't see that it will ever work out the way it's being presented here though.
Let's say you take on a 50 year mortgage in your 30s, presumably at some point you're going to want to actually retire. Theoretically I guess this is when you're supposed to pass the property on but you are also going to need somewhere to live and, given the state of pension provision and the fact you've been paying this enormous mortgage right up to retirement you probably won't have sufficient savings or monthly income to get another place and just hand off your current one.
What will actually happen is the house goes on the market and the 50 year mortgage gets reset when the next bunch of suckers- i mean, aspirational conservatives buys the property. Your family gets nothing as your money goes on care home fees and all the rest.
This just seems designed to bridge the gap between wages and the housing market without doing the obvious thing of increasing pay substantially in the same way credit cards and self certification mortgages were in the 2000s and it will be roughly as successful.
The words "time bomb" spring to mind. Can see this as a future misselling scandal in a similar vein as the old endowment mortgages.
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Post by cheggersdrinkspop on Jul 2, 2022 11:07:46 GMT 1
This raises the question of the culture in this country of owning your own home, of which there are certain financial benefits, but also financial risks. The mainland European culture is more inclined to the rental market, one which is more affordable and better controlled than our own. The UK model harks back to the 1970's where the then Tory Government, in line with large employers, who were the main Tory Party benefactors, used the analogy that if people were convinced to buy their homes then they would be more inclined to make sure they went to work (in line with the huge sell off of council houses). Hence a better labour market for employers, less industrial action, better productivity, and overall more control of employees. This has been now instilled in our population has being the norm, when with proper control and affordability of the rental market then this doesn't need to be the only way to have a roof over your head. Unfortunately the current climate only makes it affordable to purchase a property if both people are working, which then reduces family time, increases credit risk, and is not always a positive environment for everyone concerned, unless you class financial gain has a measure of success and well being.
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Post by frankwellshrews on Jul 2, 2022 12:06:27 GMT 1
This raises the question of the culture in this country of owning your own home, of which there are certain financial benefits, but also financial risks. The mainland European culture is more inclined to the rental market, one which is more affordable and better controlled than our own. The UK model harks back to the 1970's where the then Tory Government, in line with large employers, who were the main Tory Party benefactors, used the analogy that if people were convinced to buy their homes then they would be more inclined to make sure they went to work (in line with the huge sell off of council houses). Hence a better labour market for employers, less industrial action, better productivity, and overall more control of employees. This has been now instilled in our population has being the norm, when with proper control and affordability of the rental market then this doesn't need to be the only way to have a roof over your head. Unfortunately the current climate only makes it affordable to purchase a property if both people are working, which then reduces family time, increases credit risk, and is not always a positive environment for everyone concerned, unless you class financial gain has a measure of success and well being. You've got to have some way to build up a wedge, basically. In the UK, as pensions and cost of living have got worse, people increasingly can't save or invest and housing is about the only thing left that's keeping up. If you plot housing on a graph from about the 60s to now, you can see, despite all the hype, when you adjust for inflation and look at the overall trend it's nothing special. It fluctuates either side of the line (crashes and booms) but broadly speaking the overall trend is fairly modest growth. Nationwide do some good stats on this if anyone fancies a Google. What has changed is that wages have pretty much flatlined since the 90s which gives the impression that there's been some sort of runaway housing inflation when in fact it's incomes that should be drawing the attention. Of course, the situation suits certain people as it means they're guaranteed a bigger slice of the pie so they work with their political allies to tinker round the edges and do anything but the obvious; increase the share of output that goes to workers. That's what all this is really about. The message is don't strike, don't ask for more, let us come up with some can kicking, sticking plaster solution that preserves the status quo. We need to not be fooled. Even if, like me, you're in the private sector and in the kind of workplace where just thinking the word "union" will get you marched off the premises by jackbooted thugs egged on by "invasion of the bodysnatchers" style drones, we all benefit if the public sector once again becomes competitive on headline pay (pension provision is already streets ahead but sadly that doesn't pay the mortgage). This is ultimately one of the real drivers of austerity; the public sector is a huge employer of professionals and qualified staff of all stripes (white collar or blue) and holding back pay there effectively sets a ceiling for the private sector. The solution is blindingly obvious; increase pay in the public sector, clamp down on corporate tax avoidance to cover the cost and make the private sector compete with the public to keep pay up at the other end. Keep a lid on the wilder excesses of the financial services sector and Bob's your uncle. The times when the UK has had a well resourced public sector have generally coincided with the point where we've been at our most prosperous; highest "real" gdp per capita in the UK was 2007. None of this is rocket science but there's a hugely effective gaslighting campaign to convince people it's all much more complicated than it is.
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Post by belfastshrew on Jul 3, 2022 8:28:37 GMT 1
Frankwellshrew has my vote...
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Post by martinshrew on Jul 3, 2022 9:08:06 GMT 1
Most housing schemes are short term only. Just look at the help to buy ISA, capped at £250k and £450k in London, new builds in Shrewsbury are rarely below £250k, so you can't use the scheme. Think they're winding it down anyway.
A house savings account that paid a great interest rate upon purchase would be good for buyers. Paid for by a levy of the same rate of interest on landlords with 5+ properties. I'm not talking about penalising some poor ****er who rents a flat out as a pension nest egg, but landlords knocking out 5+ properties to rent could pay a 20% levy on profits and 20% could be added to first time buyers savings.
I'm not saying the idea is perfect or costed, just something off the top of my head. We need fresh ideas that's for sure.
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