ChatterBank1 min ago
Property Inflation.
61 Answers
Why is property inflation, especially housing property, considered a good thing? It's terrible for young people hoping to buy their first home, especially when so-called social or affordable housing is under attack from a government wanting to oblige local auhorities to sell off property below the market price.
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For more on marking an answer as the "Best Answer", please visit our FAQ.it all depends who you are. If you own property its "value" increases without your having to do anything about it. If you don't and would like to, it's a nightmare.
It dates back, as you suggest, to Thatcher forcing councils to sell homes cheap to tenants, without making any provision for replacing them, disrupting what had been a comparatively stable housing market - it's never recovered.
Her "big bang" to ease City regulations and allow banks and building societies more freedom also didn't help: it led to the property crash of 2008 as mortgagors were selling financial instruments so complex that even their bosses had no idea of their implications.
It dates back, as you suggest, to Thatcher forcing councils to sell homes cheap to tenants, without making any provision for replacing them, disrupting what had been a comparatively stable housing market - it's never recovered.
Her "big bang" to ease City regulations and allow banks and building societies more freedom also didn't help: it led to the property crash of 2008 as mortgagors were selling financial instruments so complex that even their bosses had no idea of their implications.
jno; "If you own property its "value" increases without your having to do anything about it."
Yes it does, and it gives the lucky house-owners something to give them a glow when they chat over the after eights. But it only really turns into money when they are old enough to downsize, and but something smaller and cheaper. Or when they decide to move to a cheaper area, or perhaps abroad so that they can retire in the sun (not so easy now, after Brexit).
Yes it does, and it gives the lucky house-owners something to give them a glow when they chat over the after eights. But it only really turns into money when they are old enough to downsize, and but something smaller and cheaper. Or when they decide to move to a cheaper area, or perhaps abroad so that they can retire in the sun (not so easy now, after Brexit).
To answer your OP.
I have never understood why normal home owners would want property inflation - apart from bragging rights.
In fact home owner inflation only ever suits the government, since they get increasing amounts of Stamp Duty on every move and the value of the property when you die pushes you over the threshold of IHT.
I have never understood why normal home owners would want property inflation - apart from bragging rights.
In fact home owner inflation only ever suits the government, since they get increasing amounts of Stamp Duty on every move and the value of the property when you die pushes you over the threshold of IHT.
As I said in another thread, there is no reason why the taxpayer should provide subsidised housing for people. They should either buy a property or rent one at the market rate. The idea of "right to buy" was to decrease, or preferably bring to an end, the state's involvement in providing housing. There was no point in selling council properties if the funds raised were used simply to build more to let at subsidised rates. Might just as well have left the original tenants in situ paying their subsidised rents.
The overarching problem in the UK is not that there are too few houses. It's that there is an over-abundance of people.
The overarching problem in the UK is not that there are too few houses. It's that there is an over-abundance of people.
// mortgagors were selling financial instruments so complex that even their bosses had no idea of their implications.//
yeah day did - it was just wrong. Bit like Boris - he didnt break the law when he did. CDS - credit default swaps they thought would insure against loss - - it didnt.
I said to my nephew - if I were like that on my capital base, I would have mortgages(s) of £50m. one default and it all crashes down.
and he said: you dont understand CDSs
yeah day did - it was just wrong. Bit like Boris - he didnt break the law when he did. CDS - credit default swaps they thought would insure against loss - - it didnt.
I said to my nephew - if I were like that on my capital base, I would have mortgages(s) of £50m. one default and it all crashes down.
and he said: you dont understand CDSs
You have never understand this ( YMF)
increasing amounts of Stamp Duty ....
no yo dont understand this.... but hey this is AB !
increasing amounts of Stamp Duty ----- is called Fiscal Drag and this is NOT a govt aim. IN the Good Old Days of high inflation, dystbin men were on £1000 a year ( wow!) and so were in the high tax bracket. Govt said correctly, that this was never their desired outcome
just saying
god there is a flood of crap on AB this morning, and shouter has nt started shouting yet
increasing amounts of Stamp Duty ....
no yo dont understand this.... but hey this is AB !
increasing amounts of Stamp Duty ----- is called Fiscal Drag and this is NOT a govt aim. IN the Good Old Days of high inflation, dystbin men were on £1000 a year ( wow!) and so were in the high tax bracket. Govt said correctly, that this was never their desired outcome
just saying
god there is a flood of crap on AB this morning, and shouter has nt started shouting yet
Naomi; I'm asfraid that scrimping and working hard is often insufficient nowadays. We scrimped and worked hard, but we were also lucky to get a house for under 10k. After that we were lucky to get some parent assistance, and we were lucky that prices weren't rising quite so badly in those days. The whole idea of a 'property ladder' I find rather strange, but at least it doesn't reallly need high inflation to make it work.
Naomi; I think you're a bit out of touch. My son and daughter- in-law were both working but couldn't afford to buy even a small flat. Their work was definitely insufficient. We gave them money to help buy a flat. Prior to that we gave our daughter money to buy a house; she and her husband were both working but couldn't have bought without help from us and his mother.