Housing market collapse.

Mr Brown said: "I will not allow house prices to get out of control and put at risk the sustainability of the future." He said he was determined that the UK should not return to the "instability, speculation and negative equity" of the 1980s and 1990s.

Do you really believe that the current insane house prices are a good thing Lord Turkey?

If so please elaborate.

Isn't obvious? Current insane house prices maintain our properties as insanely appreciating assets.

Bertie

The PM's statement is almost as stupid as the OP's question!

Peter Crosland

snipped-for-privacy@yahoo.co.uk

Insane assets?

In message , Mogga wrote

It's an easy problem to solve - Mr Brown will increase stamp duty so that the buyer pays the same as before.

On Tue, 8 Apr 2008 22:31:20 +0100, Peter Crosland wrote the following to uk.misc:

Even more so given that he said it in 1997.

mh.

The OP started it with "insane house prices".

Bertie

What do you mean by insane? Appreciating or depreciating or high? Thus your question could be three possibly different questions depending upon your opinion.

Which of those three questions did you wish to ask?

The question is not, it could mean anything.

I dont really want to waste my time guessing what your question was

and then waste even more time eloboration on it. Might be better is you elaborate on your 'question'.

If the current values dropped by about 70% then we'll be in a good situation!

In message , Mark Hewitt writes

Who is the "we" you refer to? Certainly not those who would find themselves owing a fortune on a next-to-worthless property.

Myself and my girlfriend.

Yet people are quite happy to buy new cars that do exactly the same.

My house is worth about 100 times what my car is worth. That may be slightly unusual, but I can't imagine that many people own a car worth more than 10% of the value of their house. Unless they're idiots.

Nope. However EVERYONE else would. Which is the insanity of attempting to build ones finances on the idea of endless property inflation.

There isn't a law of nature that ensures that property prices endlessly rise faster than inflation. Anyone who has based their financial wellbeing on the idea that there is has no God given right to demand of everyone else that they be bailed out when property prices cease to rise. It's not as if there hasn't been a housing price crash before.

Which doesn't mean that a lot of people aren't suffering simply because they bought into a myth spread by banks and loan companies, which is a crying shame. However it's also a crying shame that so many people have had problems finding housing because of irrational levels of house price inflation. It all evens out in the end.

It's not as if there haven't been warnings from the government that property inflation wasn't going to lead to an endless supply of free money. They've been constantly saying for well over a decade that they intended to rein in housing prices at least a little. They've been pointing out that too many people have been living with unsustainable levels of debt.

So whilst I have sympathy for anyone who suffers from negative equity as a result of the housing market regaining some sanity, I'm afraid I don't see that it's something that anyone can reasonably say is unexpected.

A house has two values. It has a financial value, its current market value, and it has a worth to the owner that equates to how much they value it as a possession. If you have bought a house on the basis that only the former matters then that's the basic problem right there. If you've bought a house based on the latter then whatever the buying and selling price then you have paid what you were prepared to for something that retains its innate value regardless of the state of the housing market.

And there the argument falls down...

In my case I think the ratio is nearer 1000 times! :-)

Well they couldn't physically keep rising above inflation forever. There

*must* come a point where the pool of people prepared to pay the prices is exhausted, and I think we've reached that point now.

Even though I'd personally quite like to see house prices cut in half, I think the best situation for everyone would be for prices to remain static for a good few years.

He's a couple of decades late to the party then...

Well, I expect we won't return to speculation for a while. I don't expect he'd get good odds on the others.

To be honest, the credit bubble was global, at least in its later stages, and Brown couldn't have stopped that. However it's fairly clear that Britain has run up more debt in relation to GDP and higher house prices (in relation to incomes) than other countries. Brown could have killed some of that dead by a two or three percentage point interest rate cut on Day Zero. He could also as Chancellor have put money aside in the bubble for helping clear up afterwards.

Darling though has been an utter disaster.

FoFP