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Call for pensioners to 'share the pain' of cuts

By: malterwitty

 

Pensioners should share the pain of austerity cuts and pay more tax to promote fairness between the generations in the housing market, a think-tank has warned.

The Fabian Society claims high levels of home ownership among older people threatens fairness, as the wages of middle-income workers stagnate and they cannot afford to buy a home.

 

It argues pensioners' taxes should increase, their benefits should be cut, and a tax on property wealth should be introduced.

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Call for pensioners to 'share the pain' of cuts

By: malterwitty

 

Pensioners should share the pain of austerity cuts and pay more tax to promote fairness between the generations in the housing market, a think-tank has warned.

The Fabian Society claims high levels of home ownership among older people threatens fairness, as the wages of middle-income workers stagnate and they cannot afford to buy a home.

 

It argues pensioners' taxes should increase, their benefits should be cut, and a tax on property wealth should be introduced.

Might actually happen, if pensioners ever stop voting :rolleyes:

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The state is going to lend money to buy to let landlords!

 

Shameful manipulation!

 

Will Hongkongers get it too? (he wonders)

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Daily Express excerpt;

 

 

"House prices to rise £10,000: Biggest increase for 3 years

CONFIDENCE in the housing market has soared to its highest level in three years with prices forecast to rise by £10,000 this summer.

By: O'GradySarah

Published: Fri, April 26, 2013

 

 

Property values are expected to rise by an average of £10,152

 

Almost three-quarters of homeowners expect values in their area to increase by an average of 4.5 per cent, according to a survey.

 

That would put an extra £10,152 on the average home worth £225,601, property experts say.

 

The good news comes as official figures showed higher than expected growth in the economy for the first three months of the year.

 

Mark Dyason, director at mortgage broker Edinburgh Mortgage Advice, said: “The results of this survey are yet more proof of the deep-seated appeal of bricks and mortar. There’s no doubt the property market is coming back to life. There’s a lot more confidence and urgency and news that the economy actually grew in the first three months of the year will put a further spring in people’s step.

 

“Instrumental to the recovery of the property market is the first-time buyer who has been buoyed by very competitive rates at ever higher loan-to-values.

 

“Properties that might have languished on the market for months and months last year are now being fought over.”

 

Both the numbers of people forecasting a house price increase by the end of the summer and the size of the anticipated rise are the highest since a quarterly survey of 4,000 owners began in 2009.

 

Lawrence Hall, of property search website Zoopla.co.uk which commissioned the research, said: “The housing market has seen a number of positive events in recent weeks including the Budget and growing confidence from homeowners is a significant step towards a recovery.

 

“With first-time buyer lending gradually increasing and mortgages becoming more readily available, there is real belief that the property market is starting to turn a corner and finally drag itself out of the hole since the financial crisis.” He said measures such as the Government’s £80billion Funding for Lending Scheme has helped fuel a surge in price."

 

The property market is fizzing with positivity, says Richard Sexton

 

There’s no doubt the property market is coming back to life

 

Mark Dyason, director at mortgage broker Edinburgh Mortgage Advice

 

The scheme has offered mortgage lenders access to cheap money to pass on to homebuyers. And from 2014 the Help to Buy Scheme will give Government guarantees to support up to £130billion of higher loan-to-value mortgages."

 

 

http://www.express.co.uk/news/property/394866/House-prices-to-rise-10-000-Biggest-increase-for-3-years

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A different opinion - Tom Winnifrith;

 

Excerpt

 

http://tomwinnifrith...ices-must-crash

 

 

"Why UK house prices must crash

 

 

 

This went out on onefreesharetip.com a few weeks ago but perhaps meriots a wider audience I stand by my view expressed here:

 

It is part of the British DNA that we believe that house prices must always go up. That is not the case. Be warned. Falls of 30% or more are inevitable within the next few years.

 

Of course inflation (the erosion of the purchasing power of the pound) has made house prices a one way bet since the early 1970s. I will not bother serving up a chart just imagine climbing a ski slope. But this is an inflation given gain. It simply reflects, to misquote Harold Wilson that the pound in your pocket is worth far less than it was. You might note that in 1971 you could buy an ounce of gold for £14. Today that will cost you more than £1000. The destruction in the purchasing power of Sterling during the past 42 years has meant that all physical assets look, in headline terms, like smart bets, housing included. You cannot live in a bar of gold but it has actually been a better bet than UK house prices. So as it happens has been am 1870 Wisden cricket annual, but again you cannot live in it.

 

House prices have not, as anyone who bought in 1987 will remember, moved in a straight line. There are periods when they fall sharply. That happens because a) they get overheated and because there is one of two external shocks: either a sharp rise in unemployment or a sharp rise in interest rates and either of those two triggers mean that large numbers of people with mortgages cannot pay, default and become forced sellers.

 

For the feature of housing as an investment as opposed to, say shares or gold, is that the market is very illiquid. If Kylie Minogue moves into your street and there is a sudden demand from dirty old men to buy housing there too, prices will rise very sharply as there will be far more demand than supply and each transaction will set a new benchmark price for the whole street. But Kylie can live in only one place at a time.

 

If you suddenly face a few forced sellers in your street and there is no rush of buyers each will compete to shift their property as quickly as possible and each time one sale goes through that sets a new benchmark – a lower one. And that is what will happen at some stage soon. At this point I bring to your attention a chart which shows average UK house price to average income ratios over time.

 

 

 

You will see that the long run average is c4. Of course the ratio is very rarely exactly 4 it tends to get ahead of itself and then correct below mean and then bounce above mean. Right now we are at a level ( above mean) seen only twice before in living memory. The first time was in 1987 when Chancellor Lawson engineered a housing bubble with the announcement that in 1988 he would abolish double MIRAS. Folks rushed to buy in 1987 and the ratio headed just above 5. Look what happened next? Er..oh – the value of your house just halved.

 

The second time was in 2007 when Gordon Brown pumped money into the UK system with his vast ( unsustainable deficits) and when credit was easy and base rates low. Then came the 2008 global crisis and the ratio crashed again. But not back to 4. And over the past couple of years that ratio has pushed higher and we are once again at 5+ and the amber warning lights are flashing.

 

You might ask why has the ratio climbed once again? It is not that average incomes are falling but the reason – as ever – is political. The Coalition reckons that rising house prices wins votes. It is probably correct. And so taxpayers cash is being blown in a myriad of ways to push prices up – we are being bribed with our own dosh. Banks have been given cheap money to lend which is passed on via cheap mortgages. There are numerous schemes to help first time buyers onto the property ladder. That they need assistance at all is down to a benefits system which underwrites sometimes exorbitant rent bills for those who have never worked ( see today's latest installment of the increasingly vomit inducing tale of Heather Frost here). Landlords know that housing benefit picks up the tab and can thus afford to charge more so pushing up both rental and purchase prices for those who do actually work.

 

The whole system is not sustainable and is pretty ludicrous to boot and at some stage the realities of the UK Government deficit will force an overhaul which will inevitably lead to a total de-rating of house prices. That is probably a good way off (at least until well after the next Election). But interest rate rises are not so far off. The UK lost its AAA credit rating last week. That should mean that the Government has to pay more to issue bonds to fund its gaping deficit which will push up interest rates generally. Moreover there are clear inflationary pressures in the system. At some stage base rates will have to increase and – assuming that the banks do not take a margin hit, a safe enough bet – that means sharply higher mortgage costs."

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Not looking for 'benefits' are you Dr Bubb? ;)

 

Haha.

Just wondering if we will now see London properties pushed even more aggressively here

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A different opinion - Tom Winnifrith;

There's an interesting response to that article on HPC.

 

this cannot continue...

But it can continue! Prices are well supported by rents, unlike what happened in Ireland, Spain, or the USA. There was no construction bubble, unlike Ireland, Spain, or the USA. It's just stupid to compare income-to-house-price multiples and assume they will revert to the mean. Interest rates have fallen, people are living longer, wealthy baby-boomer pensioners are investing in safe stable investments (property) for their retirements.

 

Reversion to the mean is not a fact of life, and certainly not a fundamental rule of investing. The world population is growing; it won't revert to the mean. The value of the pound sterling keeps falling; it will never revert to the mean (once upon a time, £1 = 1 lb of gold). House price to income ratios won't revert either: the world has changed, the economy has changed. "When the facts change, I change my mind." Well, I'm changing my mind on a HPC. I just regret that I was too slow to notice the facts changing.

 

Reply No.11 (Drewster)

 

http://www.housepricecrash.co.uk/newsblog/2013/04/blog-not-sustainable-39211.php

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Lot303_zps9585f7e7.jpg

 

carrick_zps472f721f.png

Property Features:

  • 7 Bed Detached 10,000 sq. ft. Approx. Rent £3,000pcm
     
  • Comparable: Mount Pleasant, Gilford on Market for £750,000
     
  • Drawing Room/Dining Room/Living Room/Library/Games
     
  • Room/Kitchen/4 En Suites/Bathrooms/Cellar/Swimming
     
  • Pool/Guest Annex/Grade B1 Listed Georgian Property
     
  • OFCH/Ideal family Home

Property Description:

Mature Gardens in Lawns c. 1 Acre/Parking Areas 'Glynn Park' is one of the most important houses in the Carrickfergus area, dating back to the 1600's. It is in need of modernisation throughout and will appeal to those who are prepared to spend the necessary time and money to effect the sympathetic improvements required. Set on an elevated site of c.1 acre, the house extends to over 10,000 sq. ft. of accommodation. The entrance hall boasts an ornate and elegant staircase and double period doors which lead to the principal reception room, formal drawing room, dining room, games room and living room. In addition the ground floor offers a large kitchen/living/dining room with hardwood French Oak units and Aga, utility room. bathroom and access to basement cellar. Elegant cornicing detail, ornate fireplaces and original windows are special features of this Grade B1 listed house, which however requires considerable updating.

 

The bedroom accommodation is set over 2 floors and 7 bedrooms . A guest annex (including bedroom, bathroom and kitchen) complete this along with 4 Ensuites and a family bathroom, all with period style fittings.

 

An unexpected bonus is the recent addition of a swimming pool and changing area.

 

 

Capture-1_zpsa6fe688c.png

http://www.brggibson...ion=B&offset=60

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Looks like a (relative) Bargain.

 

There must be a reason

 

How easy is it to rent?

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Does Intelligent Design Exist?

 

intelligent-design.jpg

 

There's an interesting response to that article on HPC.

It's just stupid to compare income-to-house-price multiples and assume they will revert to the mean. Interest rates have fallen, people are living longer, wealthy baby-boomer pensioners are investing in safe stable investments (property) for their retirements.

 

Actually, the pensioners should be thanking their lucky stars for this latest insane policy.

 

What a wonderful opportunity for shifting assets it affords for London-based pensioners !

 

They can sell their overpriced property in London,

and buy something larger and newer for half price in Chichester (or whatever - outside London),

and retire there.

 

No doubt, many will be able to pay off all their debts if they do that, but why not take a fixed rate,

and the cheap government money, and move some cash out of a country stupid enough to offer

a crazy deal. They can eliminate the exposure to falling Sterling that way, and have a golden retirement.

 

This nutty policy was designed to give boomers a golden retirement, and leave a mess for the next generation.

 

If I was thirty-something and living in London, I would be as angry as a mad terrorist.

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Lot303_zps9585f7e7.jpg

 

One acre of ground suggest it has, bit by bit, lost all of it's land. No doubt sold off for development over many generations which is a great loss to the house and means the place will be no good for a hotel.

 

Maybe it could be used for offices but the cost of renovation / upkeep is beyond normal understanding.

 

As for a private house, the updating and upkeep would sink all but hedge fund managers and it is doubtful they would choose to live outside of Belfast - nice as it is. If you could teleport it to 20 acres of Surrey countryside, then it would be worth millions.

 

And to add to a buyer's woes, it is a Grade listed house.

 

Shame, as she looks a grand old girl but not even the National Trust will be interested.

 

My guess it will "fall down" and end up as a building plot.

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I am surprised there is no bullish talk about house prices on this thread. Where to invest and why. Maybe it is true with you English in that you only want to hear of failure.

 

There is an artificial propped up bull market in place and no one wants to discuss ways in how to profit from it. Maybe you are all waiting for the house to goldfinger buy and hold price to gold/house ratio to materialse and never sell to capitalise.

 

 

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Perhaps noone wants to invest in an "artificial" bull market-or sees the risk as too large for an illiquid asset whose props could easily fall away?

I see rising house prices as a desperate system failure, not success.

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Perhaps noone wants to invest in an "artificial" bull market-or sees the risk as too large for an illiquid asset whose props could easily fall away?

I see rising house prices as a desperate system failure, not success.

 

That's why I have suggested the DOWNSIZE maneuver to those who can afford to leave London.

I think outside London prices may benefit more (percentage wise) from the current prop-job than inside,

and the Ratio will narrow

 

ukhaliwratio.png

 

But perhaps it may take a while for this rally to get rolling

 

Remember THIS old chart ?

http://www.housepric...=600&height=500

 

82270907.gif

 

UK Hali-Wide is now "ready to run" - the chart and the Builders index suggests

 

12804904.jpg

 

72608737.gif

 

/source: http://www.greenenergyinvestors.com/index.php?showtopic=17737

 

BTW:

Are HPC-ers talking about a likely Rally outside London ?

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  • 3 weeks later...

DESPITE Price Rises : Regrets

 

(1)

Mail: House prices see sharpest rise in six years with some areas up 25%...

but experts say it's because not enough homes are for sale

 

House prices have seen their sharpest rise in six years - with some areas up 25 per cent in just 12 months, it emerged today. Overall prices rose by 0.4 per cent month-on-month in May - marking the strongest uplift since the same month in 2007 - as a shortage of homes for sale boosted buyer competition, a report said. And Paul Markey, an estate agent for Haart in the gentrifying neighbourhood of Brixton, south London, said it was ‘boom time’ and he had seen prices rise by 25 per cent there in one year.

 

(2)

Daily Mail: One in five homebuyers are plagued by regrets

 

Nearly one in five Britons say they made a mistake buying their house and aren’t happy with the deal they have ended up with, a report shows. From buying next to a noisy airfield to paying too much or getting the wrong mortgage, almost 20 per cent of us have a significant regret about our homes, according to consumer watchdog Which? Money. on Facebook

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Recovery cannot be built on rising house prices, OECD warns in call for Britain to invest in construction

article-0-1A0C3496000005DC-220_87x84.jpg

NEW Global think tank urges Chancellor George Osborne to invest in big-money infrastructure projects as it cut its growth forecast for the UK to just 0.8 per cent this year.

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