40 years ago houses were affordable to those who were prepared to save for a year or two for a deposit .. Tax relief was even given on mortgage payments each month .. Often 25 years at a fixed rate.. We now have a shortage of houses which creates price increases .. And the UK government now offering help to buy a house they cannot really afford ..
How times have changed
People will always buy the latest gadgets even 8 year olds have mobile phones .. Some spend a £1000 on Tattoos as they seem in fashion .. Maybe we had less things and temptation and advertising to buy things 40 years ago and to encourage spending our money on.. Few computers 40 years ago or mobile phones .. And less access to credit card debt..
We are certainly in a wild and wacky times .. The global financial systems getting hammered suddenly it seems one reason they are not able in making enough profit .. 7 years ago banks needing government and whatever help .. Then 7 years of fines and now their values sliding 40 to 60 percent .. How negative interest rates will affect things if introduced is more unknown territory .. With China market closed this week .. China on Mondays open could bring another downturn in the global financial system as China plays catchup..
12 months of falling bank share prices is a long time..
It seems to me that the opportunity to own one's house is a means to helping develop self worth, hopefully also an understanding of commitment that will relate to such a level of prudence as may be appropriate. Every week we see stories of people with all kinds of electronic devices, some on contract, if not on credit, yet they do not have food, etc., to feed their families. For me that is where we have to start.
The whole system of house building and prices the past 20 years has been mainly for financial gain and not so much for the basic needs of those needing accommadation .. The attitude of if you do not earn enough to buy a house .. Then that is tough luck.. ..
To me any government help to buy for those that cannot afford it in the normal process of buying .. Is just debt induction to some into financial trouble if things go wrong in their circumstances ..
In a better UK, average house prices and house building should have been been in tandem with average earnings .. And not a creation of building below demand to inflate prices and wealth ... But sadly this not DisneyLand where everyone is happy all day..
The thing is if stockmarket valuations are dropping at the moment wiping Billions off of share valuations ... I wonder what the outcome would be if house prices followed in the same vain.. .. Not likely but .. What a global financial disaster that would be.. .. Debt would probably out strip the amount of money available to pay..
All talk now but probably the amount of debt there is could well be an issue in the future.. Credit card and mortgage debt..
Are there the skill banks available? Also, funding the costs of such a large additional 'demand' might not be so easy for the builders, especially when the houses required are for lower priced houses. It must be better/easier business for a builder to build and sell half a dozen houses at £500,000 each than thirty at £100,000 each. After all, they are in business to make profit. On a different note, which we have discussed in the past, this word 'affordable' and the associated elements have to be questioned. It may be controversial but the fact is that a lot of 'council' houses are occupied by people who could afford to buy. Of course they stay where they are because they like it, but there are questions. Should the taxpayer be subsidising them is probably the main question? If all those houses could be released to people who need supported accommodation that would make a huge difference. It may be that little can be done about existing council houses but if the Government were to introduce a programme of building 'nice' new houses that a) could be rent supported initially but b) with income related increases on annual review, and c) a help to buy scheme, so that the whole system was financially viable, I think much more could be achieved. Indeed, it may even be possible to set up a 'help to buy' system right from entry, ie: with the first few years subsidised on a reducing scale according to household income and an ongoing mortgage, perhaps with preferential interest charges, This would have the advantage of the occupier gaining equity in the property while the council reduces its equity, thus freeing money to continue building new houses. Ultimately it is about ensuring the right money in the right places. It just seems to me that there needs to be a 'fairness' introduced to the system that relates those who are receiving excess support to those who are not receiving sufficient support while allowing the best use and control of taxpayers money.
There appears a bigger global financial problem getting worse each week.. No bottom in sight and how will one know if it is getting near..
Billions must have been lost in pensions and annuities .. The global financial sector has been hammered by 30 to 50 percent... Is this the start of a recession or a global change happening and with the prospect of totally new lower future valuations ... Or is a reversal on the way...when or if buyers start to return... Problem is buyer do not pile in coming up to the end of the financial year in April .. Sell in May and buy in October is another problem which may not help markets rise during the year.. . To many ifs and buts and global uncertainty .. Could be a year to forget and regret..
40 Billion wiped of the FTSE in the first hour this morning.. Even after the last month of pain..
Is there light at the end of the tunnel.. Problem is where is the tunnel..
One main thing that the UK faces is affodable housing as we go into the future ... Not helped by the increasing population.. It would probably surprise us all if we really knew how many houses in some of our cities are over crowded now.. And how many sons and daughters are still living with their parents that are over 25 years old.. And renting another growing problem of high cost ...
I wonder why the house building companies knowing that they could have built another 1 million houses the past 15 years to meet demand and made more profits .. Or is there another reason of greed to just build enough to follow house price inflation .. How much land has been bought and sat on till the price has increased enough ..
As I said a few days ago the development of techno skills will gradually bring the big industries back. At the same time the other large developing nations, like China and India, South America, etc., are increasing their GDPs and standard of living with the inevitable narrowing of price differences. The UK will take advantage of these changes and should be capable of great advances resulting in a swing in the balance of payments equation. It will take some years but we are already on the road and have much to look forward to.
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