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Tristan
23-Jul-07, 20:00
I know it is the Bank of England and not the government that sets interest rates but if you are looking to find a way to make housing more affordable would it not make more sense to control interest rates, cut taxes etc rather than to pour in 8 billion pounds over the next three years on increasing the supply of affordable housing?

NickInTheNorth
23-Jul-07, 20:40
depends what you mean by affordable.

If you mean that someone that is stretching themselves a wee bit to pay their mortgage on the average priced house of 140k might find life a bit easier then yes you would.

If you mean someone just starting out in life that hasn't a hope in hell of getting a mortgage on a house or flat at 100k ever because their earnings are just never going to get near affording that, then no you would not.

I suspect they might be trying to help the poorer paid workers to have a chance of getting on the housing ladder.

Tristan
23-Jul-07, 22:36
I heard the report on the radio, then in the press so I thought I would open it up for discussion.

Do you think it is more earnings or savings? A couple going to buy a house should be able, if they are both working, to afford a 100,000 house if they have some savings, I would have thought.
140,000 is the average? I thought I heard it might be higher now, which is very scary.
We have been keeping a close eye on the market and the recent rises would put a dent into anyone's pocket.

Kenn
23-Jul-07, 22:45
Do local authorities north of the border have the same powers of those south?
I am talikng about the rights of local councils to compulsary purchase, derelict or properties that have stood empty and return them to the housing market.
There are also grants available for refurbishing inner city properties, especially where there is a commercial premise on the ground floor and the upper living accomodation has been left unoccupied. This has resulted not only in bringing more property to the market but also made some areas a lot more vibrant.
There is also a movement here to curb the purchase of second homes that stand empty, usually in the best rural areas for many months of the year.
However the most popular scheme so far has been lease/purchase which gives the incumbant the oppurtunity to buy or part buy social housing as and when their income will permit.
Whatever happens, with an increasing population on a small island , land prices will continue to rise purely through scarcety and there is very little that any one can do to combat that.

EDDIE
23-Jul-07, 23:13
Well i m living in rented accomadation i would buy a house but i cannot afford and i cant help but think that the interest rates are going to go up and there is going to be a housing slump 2 to 3 years down the road thats my opinion.
The one thing in life everyone needs is a decent home and its the most expensive thing you can ever buy what a crazy world we live in

j4bberw0ck
24-Jul-07, 20:26
There is also a movement here to curb the purchase of second homes that stand empty, usually in the best rural areas for many months of the year.


I would run, not walk, a long way away from a government that wanted to have rights to compulsorily purchase someone's private property, or which wanted to restrict the right of people to acquire property. That's the way the Soviet Union operated.

Eddie, if there's a property crash, then that would be the time to go buy yourself a house. Markets work. Compulsion / price controls don't.

Tristan; successive Labour governments in the 60's learned that you can't use tax as a means of controlling inflation. Only making money more expensive works. Tax avoidance was raised to an art-form in the UK in the sixties when for a time, the top rate of income tax was 83 pence in the pound, plus a 15 p in the pound surcharge on any unearned income (like savings interest). Total - 98 pence in the pound for the richest in society. Many left the country, many others paid accountants to find loopholes.

Result: the rich paid less tax than ever before and the poorest taxpayers paid tax at 34 p in the pound to make up for it. And this from Socialist governments, as economically illiterate as only socialists can be.

Bill Fernie
24-Jul-07, 22:35
An intersting item on housing was on the radio the other day. apparently many folk have been buying houses to "Leave Empty" andmany developments in town centres arebing bought up and not lived in or rented out. They arebankking on increasing values to make profit and later sell on. In Manchester they reckon over 6000 flats and houses have been purchased with tis in miind and now lie mepty but increasing invalue. The owners do not want the trouble of getting tenants out and othe rproblems of being a landlord.

Housing has become a savings vehicle for better off people insted of the stookc market andin the last few years has been a safer bet for many. Pressure from immigrations means there are less houses in many parts. Councils are disuaded from building houses in case they are forced to sell them under the Right to Buy and they can eb left with the outstadning mortgage on the proerties meaning the remaing tenants and the council tax payer have to shoulder that debt whilst the tenants who buy move on with a good start into the housing market.

There are no easy answers as we have seen many folk plough a lot of their life savings and effort over their owrking life to buy a house and pay off a mortgage.

But as they say almost all things go down as well as up so there will be a time coming when property prices will go down if not slump. Lots of folk are gambling with property that they are not left holding it when the slump comes if they have big loans on the properties.

Once folk had to save for years to get down payment to begin into home ownership but for long time 100% mortgages have meant folk could take on higher levels of debt and low inerst rates have spurred this on. Anyone thinking about taking on a high mortgage should at present be thinking about saving a bit more to reduce the long-term debt especially if interest rates are rising as they are. Everyone has different circumstances but you can do some sums and look at the mortgage costs adding on one, two and three percent and see if you can still afford the payments if they do go up.

It may be receding into the past but younger folk might ponder that we once had rates of up to 15% and who is to say that time will not come again. No one would want a house with a big mortgage if that happens. Times are different now but it might still be sensible to leave some leeway and not borrow to the hilt for a property in present circumstances.

It will take years to catch up with house building for rent by Housing Associations to make the supply meet the demand and still offer choice. There are no easy answers as whoever builds the houses - Associations or Councils they still have to raise the funds.

j4bberw0ck
24-Jul-07, 22:44
An intersting item on housing was on the radio the other day

Ah! A fellow Radio 4 listener! When governments set the tax agenda, you can't blame people for finding ways round it. 70% of Germans rent their home all their lives; ditto Italians and (decreasingly) the French.

It's only really the UK that has this "property is wealth" illness; property will crash again as it did in the seventies, eighties and nineties. Then you'll hear some howling.............:lol:

Bill Fernie
24-Jul-07, 23:21
Yes j4bberw0ck I have to unfortunately agree that something will happen one day. Predicting when is not possible.

Also I do listen to a lot of Radio 4 for four and a half hours of travel up and down to Inverness on frequent ocassions mean I have plenty of time to listen to prgrammes and i tend to favour, News, Debates, Current Affairs and the magazine type programmes that are offered in the early part of the day. Also Radio Scotland features in my listening on the way down in the morning. changin back to Radio Four if travelling in the late afternoon and for items after four o'clock for news and the days events. For light relief in the morning Fred Macaulay show or whatever it is called now whiles away half an hour. I must have listened to more "Woman's Hour" in the past few years than in the rest of my life put together and have learnt a great deal from it with it many insights into what women think on many topics. Tend to avoid ongoing serials like the Archers as I never will keep up with them any more than soaps on TV.

Sometimes hit Moray Firth Radio when nearer to Inverness as the car radio seems to get better signal than when in Caithness. When heading for Edinburgh through there is that large gap when radio signals disappear and you need to resort to the CD player or think in silence and often that is the best thing and gives time to think in peace and quite apart from the road noise.

Nothing like going off topic...and there ae often items on housing on the radio.

oldmarine
25-Jul-07, 00:55
Well i m living in rented accomadation i would buy a house but i cannot afford and i cant help but think that the interest rates are going to go up and there is going to be a housing slump 2 to 3 years down the road thats my opinion.
The one thing in life everyone needs is a decent home and its the most expensive thing you can ever buy what a crazy world we live in

Eddie, you are living in a realistic world. There are many who are living in rental properties because they cannot afford the down payment. That definitely was the way it was back during the depression years of the 1920s and 1930s. Perhaps a housing slump may help you find an affordable dream house. Best wishes to you in your future years.

Rheghead
25-Jul-07, 01:08
I know it is the Bank of England and not the government that sets interest rates but if you are looking to find a way to make housing more affordable would it not make more sense to control interest rates, cut taxes etc rather than to pour in 8 billion pounds over the next three years on increasing the supply of affordable housing?

I thought the problem was a lack of housing rather than a lack of affordable housing:confused

Tristan
25-Jul-07, 08:07
I thought the problem was a lack of housing rather than a lack of affordable housing:confused

I did see an report on housing but that seemed to have more to do with not being able to get planning permision etc. I would think if the problem was just housing that was needed the open market would more than fill the void given the chance. I went to homes.co.uk which claims to link to "758,606 homes for sale across England, Wales & Scotland" add in other estate agencies not part of homes.co.uk and I think it is safe to say there are over 1 million homes for sale. I don't know if that counts as a shortage or not.

If you google news under affordable housing it appears to be the new buzz word see

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=allBreakingNews&storyID=2007-07-23T180705Z_01_L23898781_RTRIDST_0_BRITAIN-HOUSING-UPDATE-2.XML

amongst others.

Victoria
25-Jul-07, 09:38
I heard the report on the radio, then in the press so I thought I would open it up for discussion.

Do you think it is more earnings or savings? A couple going to buy a house should be able, if they are both working, to afford a 100,000 house if they have some savings, I would have thought.
140,000 is the average? I thought I heard it might be higher now, which is very scary.
We have been keeping a close eye on the market and the recent rises would put a dent into anyone's pocket.


Before I bought my flat I rented a flat for 650 per month - then with bills on top - it took up the rest of my wages per month. I could hardly afford to eat let alone save any money per month!