I say it all started in 1962 when Barry Bucknell had a long TV series called Bucknell's House where he renovated a house.
http://www.telegraph.co.uk/news/obituaries/1422765/Barry-Bucknell.html
Part of the initial boom in prices was a result of the first round of sex discrimination legislation. Before this the amount couples could borrow was based on a single income. After the legislation borrowing and consequently house prices are largely based on two incomes. Just one of those unforeseen consequences (unless your seriously into conspiracy theories) of otherwise worthy legislation(This doesn't let Mrs T & her cronies off their share of responsibility for the later booms)
In a similar vein, my Mum blames feminism - meant more women going to work which doubled the amount a family could afford to pay for a house, too much money chasing too few goods, and prices went up.
Then in the 90's BTL came in as a concept and people thought owning 2+ houses for themselves was ok, whilst blithly ignoring what it meant for other people who also would like to buy a house, but to live in.
The only reason I'm within a fighting chance of being able to buy a house (living in London, aged 41) is because a) help from my parents, in part from money from my gran, which itself came from selling her house when she died in 2001) and b) some level of inheritance that's left from them when they die(a chunk of which will also have come from the increase in value in their house)
So basically, no-one wins, not even the middle-classes, who are in a minority in the UK. Meanwhile anyone not in a high-earning job or help from family money is screwed... it's not a great outcome from anyone's perspective really.
There's a bigger picture here though of a country which seems to have seriously lost perspective on what's important - we're in masses of debt because people are convinced that status and happiness comes fro what they buy (house, clothes, car, holiday) etc, rather than who you are, how you treat people, and what contribution you make to the world...
But i'm not sure how you could change it now though without massively screwing people over.
Screwing 'other' people over. Just need to screw over the people who own houses rather than the ones who don't
Screwing 'other' people over. Just need to screw over the people who own houses rather than the ones who don't
Well that's alright then.
we're in masses of debt because people are convinced that status and happiness comes fro what they buy (house, clothes, car, holiday) etc, rather than who you are, how you treat people, and what contribution you make to the world...
Couldn't agree more
But if you you can get money for free, why would you not ?
we're in masses of debt because people are convinced that status and happiness comes fro what they buy (house, clothes, car, holiday) etc, rather than who you are, how you treat people, and what contribution you make to the world
Well that's overstating it rather a lot. I wonder why you are overstating it.. hmm.
You do realise that not everyone's in crippling debt to fund lavish lifestyles for the purposes of impressing others, don't you? Some people can afford their mortgages, and live normal lives just like renters.
About the time Henry VIII nobbled Cardinal Wolsey so he could pinch his house (Hampton Court)?
Leaving aside the hyperbole, I've got my STW Approved(tm) answers:
Q1: the 1970s
Q2: we're now forever obsessed (hence the hyperbole)
Molgrips - exaggerating to make a point, to a degree, yes.
However:
[url= http://www.bbc.co.uk/news/business-25152556 ]Individuals now owe a total of £1.43 trillion,[/url]
On average, that means each adult in the UK owes £28,489, including any home loans.
Which is higher than median annual income
Since the start of the economic downturn, median household income and GDP per person have both fallen. However, the fall in UK median household income has been smaller than the fall in GDP per person over the same period. Between 2007/08 and 2011/12, median income fell from £24,100 to £23,200, a percentage drop of 3.8%, while GDP per person fell by 6.5%.
[url= http://www.ons.gov.uk/ons/rel/household-income/middle-income-households/1977---2011-12/sty-middle-income-households.html ]Source[/url]
Part of the problem is that house building is massivelly lucrative for the government who get severval slices of the pie (Stamp duty, Infrastucture levy contibuitions, ongoing council tax etc.) so it's not in their interest to dispeel the myths of a housing crisis.
We're currently smack bang in the middle of the process of going from having 1 generation of retiress to having 2 (for the first time in history) but once this levels out who knows what will happen..
yourguitarhero - MemberScrewing 'other' people over. Just need to screw over the people who own houses rather than the ones who don't
The people who can't afford to buy are already being screwed, so it balances out.
How should we screw them?
Earlier post nails root cause I reckon - money/credit supply!
It was all started by Mrs T & Nigel Lawson with bank deregulation in the 80s. Prior to this the BoE constrained money supply and lending e.g. it could demand bands deposit capital with the BoE at no notice, to stop them over-strectching themselves. Post deregulation, banks could borrow on the open market and lend to their hearts content. The endless supply of money, combined with a constrained supply of housing, made for massive house price inflation.....
dual income mortgages, boom/bust cycle etc. are just responses to it (the running up of asset costs). It's a bubble of sorts..
OK Lets assume for a moment that it's fine to screw the people that already own or are in the process of owning their own house.
How do you redress the balance without causing major social unrest and making the political party that did it unelectable for the next 50 years?
Part of the problem is that house building is massivelly lucrative for the government
At a time when the national debt is massive and the government needs to get hold of every last penny of income it possibly can so our future economic output doesn't just get eaten up in interest payments, leaving the country in long term penury.
As upset as I am by the extra-ordinarily high house prices, we're in such a tight spot, you can see why Gideon is playing the games he is playing.
The worry of course, is that if he's this desperate for income, just how bad is our debt and our ability to pay it off?
mudshark - MemberHow should we screw them?
[i]Gently.[/i] But ultimately, we need houses to be things to live in, not things to invest in. That means moving to prevent prices increasing above inflation, at the very least, and it probably means working to deflate them significantly. Which you can do in a ton of ways, all of which will screw the owner. The goal isn't to penalise, of course, that's just a side effect.
Can you mention a few of the ways you are thinking of? Will everyone be gently screwed as soon as they buy a place?
probably means working to deflate them significantly.
I don't disagree, but that will be a bit of a vote loser:
'We want to reduce the value of your house'
Zero house price growth over 10 years? Or v slow, slight price drop?
Wages will catch up + gives first time buyers time to save up a deposit
Or just let the usual boom/bust pattern which is a feature of capitalism run its course...
1970s mum and dad hey bought a 3 bed semi in london for £12,000 on the central line
when you were allowed joint mortgages - Mum had to go back out to work as now competing against people with no kids to buy family home. demand created drives prices higher, people willing to use more of salary to live where they want to etc...
Break down of family life as I knew it...
We moved long ago so didn't make huge sums, but its probably worth £650k now
Trying to buy something similar as the house i grew up in is ridiculous, will never probably earn enough to buy something similar.
It would be better if again you could only have 1 person on a mortgage
[url= http://www.ft.com/cms/s/2/e1f343ca-e281-11e3-89fd-00144feabdc0.html#axzz34XOXBP5t ]Thomas Piketty got his sums wrong[/url]
And the FT article about Piketty is itself wrong, & cherry-picks its figures.
probably more accurately, the collective greed of people to buy a house for peanuts and make a near instant profit, has contributed to the housing issues we have today.
Reminds me of the thread a few weeks ago where molgrips was castigated for buying a house rather than giving a landlord all his money...
Some people can afford their mortgages, and live normal lives just like renters.
And some people* have paid their mortgages off early and don't owe anyone anything...
* about 30% of home owners in the UK: http://www.theguardian.com/news/datablog/2013/may/13/mortgages-property-debt-uk-trends
31 September 1953
On the how did this happen theme above: I understood that prior to the deregulation mentioned. It was broadly necessary to apply and wait in a queue for a mortgage to be available (quota's).
Hence being a 'member' of a regional mutual society i.e. you were a genuine equitable member - as opposed to a punter being sold a product.
That changed things as well I think - in the old model of credit supply - far fewer people were getting tickets clipped/snouts wet.
You could look at CDO's as the ultimate progression and sharp end of this practice.
Out of interest what would happen if all mortgages other than straight repayment were stopped & you could only get BTL properties if you could buy them outright rather than taking the imaginary money from your "portfolio" (equity) ?
Also what about people taking equity from their house to give them a "lifestyle", surely it can't be sustainable?
