The flawed economic model.

[joe-90]

The most bizarre aspect of all this is that the UK (and particularly) the US have no money. We are bust. So what happens? China lends us money so we can buy their wares because if we stop buying - then China's economy will crash and all it's factories will shut.

FFS - can anyone else see a flaw in that model?

It makes a perpetual motion machine look positively inventable.

It's a madness that will end up in a train-wreck- the buffers are just down the line.

 

[spacecat]

If that idiot Scot hadn't removed the cap on mortgages linked to income we wouldn't need to. House prices would still be at 2.5 times salary. If house prices come down now half the population would be in negative equity.

Not true there has never been a law limiting a mortgage to 2.5 salary

Banks CHOSE to do it when everyone thought the boom would last forever

Greedy people Took out huge loans to buy houses they could not afford..thats THEIR problem

 

[joe-90]

It was Brown that 'let them do what they like'.

No Oz bank went bust. Or Canadian. Or New Zealand..... they didn't have thicko in charge.

 

[Susiejb]

Greedy people Took out huge loans to buy houses they could not afford..thats THEIR problem

Can't agree there spacecat......people just had no choice but to take huge mortgages because of rising house prices.
In the southwest.....known for its low wages.....youngsters now stand no chance to buy and renting is extortionate.

 

[joe-90]

If the parity had been maintained with salary - there would never have been the housing bubble. Brown is a fool.

 

[Susiejb]

Absolutely agree Joe ..... utterly ridiculous and everyone could see it, Brown was fool, and our youngsters are suffering because of it.

 

[joe-90]

Prices will fall just as they did in the USA - leaving millions in negative equity.

 

[Susiejb]

I'm not so sure about that Joe in the immediate future......I think if interest rates rise it will be an absolute disaster, and yes it will happen then as people fail to afford mortgage repayments, the market will be flooded with re-possessions.

 

[joe-90]

And the banks will be left with properties that are worth way less than the mortgage on them - and they will go into free-fall wanting another bail out.

 

[spacecat]

Greedy people Took out huge loans to buy houses they could not afford..thats THEIR problem

Can't agree there spacecat......people just had no choice but to take huge mortgages because of rising house prices.
In the southwest.....known for its low wages.....youngsters now stand no chance to buy and renting is extortionate.

Don't buy what you can't afford....Buyer Beware

Free market

Its only in this country that we are so obsessed with owning property.thank Maggie for that
people in europe don't care about it and renting is not a stigma

 

[Susiejb]

absolutely not .....I agree.....but the owners of the properties struggling to pay high mortgages then put up the rent even higher. Tenants then end up paying even more than a mortgage would cost.
Add to that the fact that developers are insisting on building £500000 ++ apartments and it still leaves youngsters in a mess and without a hope.

 

[geraint]

I'm not so sure about that Joe in the immediate future......I think if interest rates rise it will be an absolute disaster, and yes it will happen then as people fail to afford mortgage repayments, the market will be flooded with re-possessions.

well as the interest rate has not moved for the past two years,

how would it be a disaster....

I think they should raise it... That is whats making this country stagnant....

 

[spacecat]

so your saying control the market?
Very dodgy ground

No one has a right to own a property you have to earn it

 

[joe-90]

The other problem is that anyone on a low wage won't be able to pay rent - so they go on benefits forever and get their rent paid for them.

 

[geraint]

so your saying control the market?
Very dodgy ground

No one has a right to own a property you have to earn it

how is my comment anything to do with owning a property...