Our ridiculously high property prices.

[joe-90]

Who's fault is it? Hasn't it got to be the FSA? Why didn't they issue the likes of Northern Rock guidelines that would have prevented them being financially reckless? I've read that Northern Rock was approving mortgages over 6 times the salary of the mortgagee, and mortgages up to 125% of the value of property being purchased. Why did no-one see the madness of this policy?

Traditionally (in recent times) a mortgagee could borrow 2.5 times their salary. This effectively capped the price of housing. If you couldn't raise £300k then you couldn't buy a house for £300K. It was an effective cap that kept the price of housing within reach of the average citizen.

Better still it should have been 2.5 times salary for the main partner and 1 times for the other partner.

They would still live in the same house - they just wouldn't have been so heavily in debt to get there.

They could still climb the property ladder but by saving up rather than borrowing.

The head of the FSA should have been sacked and the whole system re-evaluated.

To get out of this mess we should choose a date (Aug 1st?) and say all properties will devalue by 35% on this day - now lets start to buy and sell again with the new (old) rules in place.

Joe-90 for World president.

 

[Shytalkz]

Yeah, that would work . Government-determined house pricing, hmm.

Next you'll be saying that the gobmint should be setting salary levels for all and sundry.

Did you cry - and not tears of happiness - when the Berlin wall came down, perchance?

Whilst I don't agree with your solution, I do agree with you that the "easy money" has led to all kinds of inflationary pressures - I remember having to save regularly for a minimum of six months before I could even think of getting a mortgage with the Halifax for my first house. £21k, those were t'days...

What you also forget though, is that after Gordy plundered the pensions pot, there really wasn't much else left to try and put one's money into, to try and provide for one's dotage. So people got on the BTL bandwagon, which also increased the upwards pressure on house pricing.

So gobmint is in a big way responsible for the hike and now you want them to take measures to correct their mistakes?

 

[megawatt]

To get out of this mess we should choose a date (Aug 1st?) and say all properties will devalue by 35% on this day - now lets start to buy and sell again with the new (old) rules in place.

And then ...

All the low income families are plunged straight into a negative equity nightmare.

The gap between the have's and the have not's massively increases as all the have's buy up all the properties at knock down prices, rent until the market becomes bouyant again and then sell at today's prices.

Not even considering all the equity which will have been raised against this (now wiped out) 35%

Joe-90 for World president.

Errrmmmmm ... No, not really.

How about Joe-90 for site fool?

MW

 

[D_Hailsham]

Traditionally (in recent times) a mortgagee could borrow 2.5 times their salary. This effectively capped the price of housing. If you couldn't raise £300k then you couldn't buy a house for £300K. It was an effective cap that kept the price of housing within reach of the average citizen.

You mean the mortgagor, the mortgagee is the person who lends the money!

The problem all started when the previous government decided to liberalise the building society industry and allow them to borrow money on the open market and turn themselves into "banks". In the days of mutually owned building societies - I worked for one for several years - the only money available for lending to house buyers was the money deposited in the society by savers. It was a rule of thumb that, for every borrower, there needed to be three savers. As the pot of money available was limited, the Societies were very careful whom they lent to and had strict rules on deposits (20% when I bought my first house) and salary multiples.

Once the market had been liberalised, there were no such restrictions, as the societies could borrow money on the open market. They could also get embroiled in borrowing and lending money to each other, and purchasing "investments" such as packaged mortgages from American institutions, who had lent to people who could not really afford to pay the mortgage (so-called sub-prime mortgages).

 

[Shytalkz]

You mean the mortgagor, the mortgagee is the person who lends the money!

Isn't it like employer and employee?

I like the acronym for the sub-prime loans: NINJA (No income, no job or assets)

 

[Watchmaker]

"The head of the FSA should have been sacked and the whole system
re-evaluated."
Sacked ? No. He should be tried, along with many others in the money" "industry" and, if found guilty, jailed for a suitable stretch, and his ill gained assets seized. A previous posting of mine did refer to "The Guilty Men and I wondered (And still do) why, when there is some fairly minor problem of misrepresenting figures, and misleading the public, by a water Company, they are fined over £30 million. Quite rightly, railway maintenance staff are investigated by the law when there is an accident and, many other industries are constrained by the law when there are circumstances which might endanger the public. Why are these financial bandits allowed to get away scot free after leaving their trail of misery and mayhem? One commentator had the cheek to say that we all go into these dubious financial arrangements, ie, the six times salary and 125% mortgage, with our eyes open. The inhabiters of that shady world of finance, presumably board their trains "with their eyes open" and expect to be transported comfortably and safely so, why are the safeguards (if any) of their industry, arranged so differently?

 

[megawatt]

I don't want to spoil your lust for revenge and the head of the FSA zsar but we are all responsible for the state of the property market in this country and it all began when people started seeing property as a mechanism to make obscene sums of money rather than to live in.

Whilst rich people are prepared to pay £300K for a garage space in London the prices are going to stay high for everyone else ... Simple supply and demand.

And there are plenty of rich people around

MW

 

[D_Hailsham]

You mean the mortgagor, the mortgagee is the person who lends the money!

Isn't it like employer and employee?

No, that's where so many go wrong.

The building society or bank do not give the house buyer a mortgage; they give the buyer a loan and, as security, the buyer gives the bank a mortgage on the property. It's the exact opposite of a lease.

 

[Shytalkz]

Ah, just goes to show you can always learn something new every day. I've been writing my reports wrongly for years, it would seem !

 

[tim west]

Not a problem, just pass Go a couple of times and you've paid it off!

 

[Sylvan Tieger]

I wonder how people can complain about the sky rocketing prices of mortgages and taxes and tolls and fuel surcharges and the high cost of food,
materials and insurance and they on the other hand give all kinds of free stuff to illegals invading their homer land demanding more and more from the government as the liberals give their country away.

FREE stuff is going to cost someone and normally its is the taxpayer .

As democratic governments give work to over seas corporations for example

NYC manhole covers are made in India as a friend of mine from Australia was visiting and noticed the foundry markings ( he travels the world and takes pictures of manholes)

America does have foundries but the government buys foreign products as it is cheaper because of the rules and regulations the companies have here we cannot be cost effective when competing against countries that do not have the same strigent laws or out of control taxes

 

[joe-90]

To get out of this mess we should choose a date (Aug 1st?) and say all properties will devalue by 35% on this day - now lets start to buy and sell again with the new (old) rules in place.

And then ...

All the low income families are plunged straight into a negative equity nightmare.

The gap between the have's and the have not's massively increases as all the have's buy up all the properties at knock down prices, rent until the market becomes bouyant again and then sell at today's prices.

Not even considering all the equity which will have been raised against this (now wiped out) 35%

Joe-90 for World president.

Errrmmmmm ... No, not really.

How about Joe-90 for site fool?

MW

As usual, you have a very tenuous grasp of reality.

House prices are likely to fall between 30 and 50 percent. The reason is that that is the amount that they were over priced by.

It doesn't suit me and will cost me (and many others) a few bob.
So negative equity is already building out there - it can't be avoided by pretending it won't happen. So why not simply accept it and cut out the slow drawn out agony of watching prices fall by 2% per month?

As for the rich - well they've certainly got there own problems.
If they've invested in property they will certainly lose heavily.

If they are on the Stocks and shares circus - they lose an absolute fortune.

The rich will lose more than the poor as they have more to lose and there is no safe haven.

For someone that claims to be rich (though you've never said where the dosh came from) you have very little nous.

 

[jbonding]

joe your right things are goin pear shaped and i am so glad, i missed the property ladder blag, how a house for £58,000 can be worth £158.000 after 10 years doesnt and never made sense, now they shall pay and hopefully i catch the next property increase but i cant see it happening for atleast 10 more years. And before anyone gets on one it will effect me and everyone around me but so what ive got nothing and will have nothing, come on the crash, weard that i was wishing for floods a while back thought there might be a load of work but a crash will do.

 

[megawatt]

Joe-90 Wrote:

For someone that claims to be rich (though you've never said where the dosh came from) you have very little nous.

Those that can ... Do!

Those that can't ... Try to tell everyone else how to on a DIY general Discussion forum

MW

 

[joe-90]

Joe-90 Wrote:

For someone that claims to be rich (though you've never said where the dosh came from) you have very little nous.

Those that can ... Do!

Those that can't ... Try to tell everyone else how to on a DIY general Discussion forum

MW

All bluster and no substance. WTF are you blathering about?