House prices rose 7.3% this year, average now almost £250k

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stuman said:
Quick solution;

95% LTV 2.5% mortgages fixed for the lifetime of the mortgage for first time buyers.

everybody would have access to a roof over their heads that they own.

upgrades / moves / rental / etc would then call in higher rate mortgages / tax etc.
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Banks will not offer that, so it will have to be government-backed. Similar to the Netherlands (which offers 100% LTV or sometimes even 110% LTV).

I think that is going to happen here as well.
 
HACO said:
Banks will not offer that, so it will have to be government-backed. Similar to the Netherlands (which offers 100% LTV or sometimes even 110% LTV).

I think that is going to happen here as well.
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forgot to add that part :p but yes, sounds good. Not sure it’ll happen though.

I’ve got the feeling Boris will go that direction, bug in the end not have the balls and so dial it back.

it’ll have that intention, but not the potency.
 
House prices going up is mostly bad because it's mostly because of overpopulation in certain areas. Not enough houses have been built.

But also it shows that higher paying jobs are available in the area and also that it might be a bit nicer. Houses looked after etc.
 
HACO said:
Every time there's a slowdown in the market and growth returns to near zero (let alone a crash), government does something to make sure that prices continue to rise. Whether it's lowering interest rates (mortgage interest rates and BoE interest rates don't have to be the same, they're not in the US, but they are here), HTB loans (which caused massive inflation of new builds, also trickled onto older builds), or stamp duty holiday, shared ownership, or other plans.
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Sunak's decision to cut SDLT was in my view completely unjust against the backdrop of the pandemic - people dying, rising unemployment particularly among non-homeowners and young people, millions furloughed with many having potentially no job to go back to. As you point out it was just another Government policy to prevent a housing crash. In reality, if the prices of our homes had dropped this year, I doubt anyone would have been particularly angered given the global pandemic. All of this of course is echoed with the stock markets and unjustly large QE schemes implemented by central banks. Enormous disconnects between the economy, people's livelihoods, housing and other asset valuations... screw all the millions of dead people as long as valuations keep going higher.
 
I DON'T fancy boys said:
https://forums.moneysavingexpert.com/discussion/791835/northern-rock-100-mortgages

https://www.thisismoney.co.uk/money...thern-Rock-home-loans-crippling-rates-13.html

Quite a few people suffered when the market crashed and they were left with significant negative equity coupled with eye watering interest rates.
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ok, seems like it was the 100%+mortgages that caused the issue.

answer to that would be the fixed for life of the mortgage rate and max of 95%LTV *shurg*

I can only hope eh!

but a good word to warning. Thanks.
 
Barks said:
Sunak's decision to cut SDLT was in my view completely unjust against the backdrop of the pandemic - people dying, rising unemployment particularly among non-homeowners and young people, millions furloughed with many having potentially no job to go back to. As you point out it was just another Government policy to prevent a housing crash. In reality, if the prices of our homes had dropped this year, I doubt anyone would have been particularly angered given the global pandemic. All of this of course is echoed with the stock markets and unjustly large QE schemes implemented by central banks. Enormous disconnects between the economy, people's livelihoods, housing and other asset valuations... screw all the millions of dead people as long as valuations keep going higher.
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I can understand why people think it was an odd move and not on the list of national priorities, but on the whole I think it was a good idea.

There is a constant flux of people renewing their mortgages. The loans people get depend on the value of the property coupled with their wage. The pandemic already caused a lot of uncertainty with respect to people's wages, and to add the double wammy of a housing price crash into the mix would have put the banks in full-on panic mode (IMO, at least).

What this means for people is that all of a sudden their previously affordable mortgage could easily double (or more!) when they come to renew, meaning some people are forced to move out (further decline in prices) and those who remain in their home have left money to pump into the rest of the economy.

I don't think they expected to have a property boom, they just wanted to keep things stable so they were not forced to raise interest rates to dangerous levels.
 
I DON'T fancy boys said:
I can understand why people think it was an odd move and not on the list of national priorities, but on the whole I think it was a good idea.

There is a constant flux of people renewing their mortgages. The loans people get depend on the value of the property coupled with their wage. The pandemic already caused a lot of uncertainty with respect to people's wages, and to add the double wammy of a housing price crash into the mix would have put the banks in full-on panic mode (IMO, at least).

What this means for people is that all of a sudden their previously affordable mortgage could easily double (or more!) when they come to renew, meaning some people are forced to move out (further decline in prices) and those who remain in their home have left money to pump into the rest of the economy. I don't think they expected to have a property boom, they just wanted to keep things stable so they were not forced to raise interest rates to dangerous levels.
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They 100% expected it and it was by design.

To avoid renewal problems due to negative equity, they could have just extended the fixed rate by two years for everyone and the government could have funded the difference, would have costed much less than the stamp duty holiday and would not have caused a property boom. It's not like this is unheard of, other countries did it. US did it many times in the last few decades. But our government wanted prices to significantly increase.

Also if people are going to benefit from price rises, it's only natural that they should also suffer for price downturns. You can't socialise the losses and privatise the gains. If housing is an investment, it has to be allowed to fall. If it's not an investment, it shouldn't go up in value. Nobody is entitled to risk-free growth using leveraged money, at everyone else's expense.
 
what is the median percentage rise ?

As a b-mol new properties which allow use of the government help to buy seems to be a trap, where the house values are artificially inflated versus the market,
r4 expose programme found 1 in 7 of these properties made a loss when sold in first couple of years.
 
HACO said:
They 100% expected it and it was by design.

To avoid renewal problems due to negative equity, they could have just extended the fixed rate by two years for everyone and the government could have funded the difference, would have costed much less than the stamp duty holiday and would not have caused a property boom. It's not like this is unheard of, other countries did it. US did it many times in the last few decades. But our government wanted prices to significantly increase.

Also if people are going to benefit from price rises, it's only natural that they should also suffer for price downturns. You can't socialise the losses and privatise the gains. If housing is an investment, it has to be allowed to fall. If it's not an investment, it shouldn't go up in value. Nobody is entitled to risk-free growth using leveraged money, at everyone else's expense.
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Yea that's a good point. But my opinion is that the UK government approach was better in this instance.

I would argue that offering to pay the difference between the fixed rate and new variable rate would have kept people in their homes but stopped people buying/selling (who would otherwise be forced onto the new BoE rate) and this would have still caused a price crash and subsequent crunch when the government finally decided to end support.

I must admit I wasn't aware this was something that had been enacted in the US before, will have to do some reading.

I agree that we should suffer the downturns as well as the rises, but IMO the reason housing is so attractive in this country is very much because the government seems hell-bent on protecting it. I do not think it's fair at all, but at the same time cannot begrudge anyone for pouring money into at as an investment because historically it's been shown to be a very sound choice.

edit: My understanding is that US policy throughout the pandemic essentially bolstered the stock market to a level that surprised many. Is this so different to what the UK government did with house prices?
 
I DON'T fancy boys said:
I agree that we should suffer the downturns as well as the rises, but IMO the reason housing is so attractive in this country is very much because the government seems hell-bent on protecting it. I do not think it's fair at all, but at the same time cannot begrudge anyone for pouring money into at as an investment because historically it's been shown to be a very sound choice.
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I also don't blame individuals from taking advantage, it's not the fault of the home owners, but failure of government policies. However, I also don't shed tears for individuals who have benefited from it tremendously who oppose sensible policies "because it's unfairrrrrrr" to them. Unfair meaning, they're may get less advantage now, i.e. their £200k house is now £600k, but they think a £100 extra mortgage payment or a 0.5% LTV tax is unfair and they're being targeted. Or those who feel like they're entitled to risk-free indefinite growth.


I DON'T fancy boys said:
edit: My understanding is that US policy throughout the pandemic essentially bolstered the stock market to a level that surprised many. Is this so different to what the UK government did with house prices?
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They're doing the same thing when it comes to stock markets. But the US did not give a holiday to real estate taxes or real estate transfer tax. And the people survived. US real-estate market only grew about 1% this year which is roughly inflation.

Our housing policies are so insane that the US seems like the sane ones, despite them being the insane ones when it comes to healthcare, education, and many other things. That shows how off the chart crazy everything is here.
 
We should definitely be copying the US.

Last time I was there. I will likely have seen more homeless people in 2 weeks than I did in 2 years in the UK.

Last time I checked housing in America isn't cheaper especially if you were to compare New York or Los Angeles with London. It will be if you look at Detroit but then there are similar places in the UK too.
 
Psycho Sonny said:
We should definitely be copying the US.

Last time I was there. I will likely have seen more homeless people in 2 weeks than I did in 2 years in the UK.

Last time I checked housing in America isn't cheaper especially if you were to compare New York or Los Angeles with London. It will be if you look at Detroit but then there are similar places in the UK too.
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US median property price to median household income is 4.5x. UK is now over 8x.

Remember that thing called statistics. You can measure these stuff instead of just going by your feelings.

UK has 280,000 homeless people (66 million population). So 4.2 people out of 1000.
US has 550,000 homeless people (320 million population). So 1.7 people out of 1000.

What you've seen or haven't seen is not relevant. Statistics has been invented for several centuries.
 
Eurofighter said:
Also we shouldn't be like a lot of europe where everyone rents.
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I agree, however with the ever-increasing prices, there's no choice anymore. Home ownership in the UK has been declining significantly and will continue to do so given the current government policies.

Our home ownership rate is about 65% now. Similar to France, lower than the Netherlands and higher than Germany. So we're become middle of the park in that aspect.
 
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