Support for tenants pledge is welcomed in borough

Dorset Echo: PEOPLE ARE STRUGGLING: Simon Bowkett PEOPLE ARE STRUGGLING: Simon Bowkett

PLANS to help householders who rent their homes have been welcomed in Weymouth and Portland.

Labour has outlined plans to cap rent increases in the private sector and scrap letting agents’ fees if it came to power.

The party’s parliamentary candidate for South Dorset Simon Bowkett said he is backing the plans which he said would give a fairer deal for those renting their homes privately.

He said one of the biggest causes of the cost of living crisis is the price of renting or buying a home, and Labour has already pledged that it will make sure that Britain builds 200,000 more homes a year by the end of the next Parliament so that more families can fulfil their dream of home ownership.

Figures obtained from the 2011 census showed that the number of households buying their home in Weymouth and Portland has fallen by over 21 per cent since 2001, while the number renting privately has risen by 53 per cent. One in five homes in the borough is now privately rented.

Mr Bowkett said: “I have been talking to families and individuals renting locally, and people are struggling.

“They are telling us that they are worried about the prospect that their rent could jump up by a big amount from one year to the next, or that they will be asked to leave their home at short notice. Local people want to be able to settle down, to put down roots and have peace of mind."

He added: “If you buy your home, most estate agents will not charge you fees, but people in our town who rent are given no protection and they get charged £350 in fees on average. That’s a lot of money for a lot of people and that’s why Labour will legislate to ban these rip-off charges by letting agents.”

The local Labour group said it is exploring the idea of a ‘council-led not-for-profit letting agency’ that will give local residents an option without high fees.

Comments (12)

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3:47pm Sat 3 May 14

DanBrember says...

For more information on Labour's proposed Council-run lettings agency or on the wider priorities a Labour-led WPBC would have, see: www.visionforweyport
.co.uk
For more information on Labour's proposed Council-run lettings agency or on the wider priorities a Labour-led WPBC would have, see: www.visionforweyport .co.uk DanBrember
  • Score: 2

4:09pm Sat 3 May 14

shy talk says...

Legislation is already in place to protect tenants against high rent increase. They can appeal to the Residential Property Tribunal if you’re a private tenant in England and think your rent is too high. The tribunal can keep the rent at the same level or lower it. In most cases they also have the power to increase the rent.

As Gordon Brown maxed out labours credit card, where are they going to get the money to build 200,000 homes a year? Perhaps increased taxation on the population.

True estates agents do not charge fees when buying a property. However the government does charge VAT and on properties above £125,000, you pay Stamp Duty Land Tax ( SDLT ) of between 1% and 7% on the whole purchase price.

Council-led not-for-profit letting agency. With the council’s past track record that in my opinion would be the blind leading the blind.

Simon Bowkett I suggest you have a rethink, this is plain electioneering.
Legislation is already in place to protect tenants against high rent increase. They can appeal to the Residential Property Tribunal if you’re a private tenant in England and think your rent is too high. The tribunal can keep the rent at the same level or lower it. In most cases they also have the power to increase the rent. As Gordon Brown maxed out labours credit card, where are they going to get the money to build 200,000 homes a year? Perhaps increased taxation on the population. True estates agents do not charge fees when buying a property. However the government does charge VAT and on properties above £125,000, you pay Stamp Duty Land Tax ( SDLT ) of between 1% and 7% on the whole purchase price. Council-led not-for-profit letting agency. With the council’s past track record that in my opinion would be the blind leading the blind. Simon Bowkett I suggest you have a rethink, this is plain electioneering. shy talk
  • Score: 0

5:07pm Sat 3 May 14

JamesYoung says...

The biggest cause of the cost of living crisis is not high housing costs. The biggest cause of the cost of living crisis is bank deregulation leading to lax lending practices and easy credit.
Labour is making a step in the right direction with these measures, but it has said nothing about dealing with the underlying issue.
Mortgages should be restricted to 3 times income, as they once were.
Interest rates should be returned to normal.
Stamp duty on sales should be based on original purchase price + depreciated value of improvements + wage price inflation while owned, with the seller paying a much higher stamp duty if the sale price exceeds this figure.
Bring down the purchase cost of housing and rental costs will fall.....as will the housing benefit bill. More money will be free up to circulate in the productive economy, creating jobs, etc.
Sadly, this article convinces me that Labour have only got it half right.
The biggest cause of the cost of living crisis is not high housing costs. The biggest cause of the cost of living crisis is bank deregulation leading to lax lending practices and easy credit. Labour is making a step in the right direction with these measures, but it has said nothing about dealing with the underlying issue. Mortgages should be restricted to 3 times income, as they once were. Interest rates should be returned to normal. Stamp duty on sales should be based on original purchase price + depreciated value of improvements + wage price inflation while owned, with the seller paying a much higher stamp duty if the sale price exceeds this figure. Bring down the purchase cost of housing and rental costs will fall.....as will the housing benefit bill. More money will be free up to circulate in the productive economy, creating jobs, etc. Sadly, this article convinces me that Labour have only got it half right. JamesYoung
  • Score: 3

5:57pm Sat 3 May 14

IDONTKNOWIFITISTRRUE says...

Council-led not-for-profit letting agency!
They can't even manage the finances that they deal with at present e.g the ferry terminal, what makes them think that they can run an estate agency (using our money to set it up and keep it running).
Council-led not-for-profit letting agency! They can't even manage the finances that they deal with at present e.g the ferry terminal, what makes them think that they can run an estate agency (using our money to set it up and keep it running). IDONTKNOWIFITISTRRUE
  • Score: -2

7:39pm Sat 3 May 14

cosmick says...

Shut the borders to E/U and other people who come to live off us , AND the house problem will at least slow down.
BUT we know LABOUR wants these people here hoping they will get there votes.
But the BIG NEWS is UKIP ARE COMMING!
Shut the borders to E/U and other people who come to live off us , AND the house problem will at least slow down. BUT we know LABOUR wants these people here hoping they will get there votes. But the BIG NEWS is UKIP ARE COMMING! cosmick
  • Score: 0

7:44pm Sat 3 May 14

ksmain says...

JamesYoung wrote:
The biggest cause of the cost of living crisis is not high housing costs. The biggest cause of the cost of living crisis is bank deregulation leading to lax lending practices and easy credit.
Labour is making a step in the right direction with these measures, but it has said nothing about dealing with the underlying issue.
Mortgages should be restricted to 3 times income, as they once were.
Interest rates should be returned to normal.
Stamp duty on sales should be based on original purchase price + depreciated value of improvements + wage price inflation while owned, with the seller paying a much higher stamp duty if the sale price exceeds this figure.
Bring down the purchase cost of housing and rental costs will fall.....as will the housing benefit bill. More money will be free up to circulate in the productive economy, creating jobs, etc.
Sadly, this article convinces me that Labour have only got it half right.
Restricted to 3 times income? Shouldn't it be restricted to 3 times the largest wage only? Then it protects against the one person in 2 income households (of which there are many - mine included) losing their job and leaves those with only one wage going into a house on a more level playing field with those with 2. And why do we need Stamp Duty - it is a nonsense tax and just another way of overtaxing those already being taxed on buying their home. I mean - what costs does Stamp Duty actually cover?

The only problem in all this is what will happen to those who have bought at the top of the housing price boom through no fault of their own other than those were the market conditions at the time? They will end up in negative equity for years - and the problem will be for them is that a house purchase is a tie. If they decide to move to get a better job or have to move to get a job they will likely not be able to finance a move to live elsewhere.

Trouble is - whatever you propose there will be losers on either side of the divide simply because the market conditions that exist now have become well established.
[quote][p][bold]JamesYoung[/bold] wrote: The biggest cause of the cost of living crisis is not high housing costs. The biggest cause of the cost of living crisis is bank deregulation leading to lax lending practices and easy credit. Labour is making a step in the right direction with these measures, but it has said nothing about dealing with the underlying issue. Mortgages should be restricted to 3 times income, as they once were. Interest rates should be returned to normal. Stamp duty on sales should be based on original purchase price + depreciated value of improvements + wage price inflation while owned, with the seller paying a much higher stamp duty if the sale price exceeds this figure. Bring down the purchase cost of housing and rental costs will fall.....as will the housing benefit bill. More money will be free up to circulate in the productive economy, creating jobs, etc. Sadly, this article convinces me that Labour have only got it half right.[/p][/quote]Restricted to 3 times income? Shouldn't it be restricted to 3 times the largest wage only? Then it protects against the one person in 2 income households (of which there are many - mine included) losing their job and leaves those with only one wage going into a house on a more level playing field with those with 2. And why do we need Stamp Duty - it is a nonsense tax and just another way of overtaxing those already being taxed on buying their home. I mean - what costs does Stamp Duty actually cover? The only problem in all this is what will happen to those who have bought at the top of the housing price boom through no fault of their own other than those were the market conditions at the time? They will end up in negative equity for years - and the problem will be for them is that a house purchase is a tie. If they decide to move to get a better job or have to move to get a job they will likely not be able to finance a move to live elsewhere. Trouble is - whatever you propose there will be losers on either side of the divide simply because the market conditions that exist now have become well established. ksmain
  • Score: -1

8:13pm Sat 3 May 14

trymybest says...

The council could stop paying housing benefit, then there would be plenty of money to build low cost homes for the needy.
The council could stop paying housing benefit, then there would be plenty of money to build low cost homes for the needy. trymybest
  • Score: -2

1:26am Sun 4 May 14

common cence says...

Private landlords do charge to much rent if they go through a agent i am a private landlord and have been for 40yrs and all my tenants are happy with what they pay , and that is 6 tenants , and yes it needs controlling ,
Private landlords do charge to much rent if they go through a agent i am a private landlord and have been for 40yrs and all my tenants are happy with what they pay , and that is 6 tenants , and yes it needs controlling , common cence
  • Score: 7

10:57am Sun 4 May 14

shy talk says...

DanBrember wrote:
For more information on Labour's proposed Council-run lettings agency or on the wider priorities a Labour-led WPBC would have, see: www.visionforweyport

.co.uk
Went to the website for more information. “Aim to create a council-run lettings agency, ensuring quality and affordability.” One sentence is that it more information?
[quote][p][bold]DanBrember[/bold] wrote: For more information on Labour's proposed Council-run lettings agency or on the wider priorities a Labour-led WPBC would have, see: www.visionforweyport .co.uk[/p][/quote]Went to the website for more information. “Aim to create a council-run lettings agency, ensuring quality and affordability.” One sentence is that it more information? shy talk
  • Score: 0

11:43am Sun 4 May 14

JamesYoung says...

ksmain wrote:
JamesYoung wrote:
The biggest cause of the cost of living crisis is not high housing costs. The biggest cause of the cost of living crisis is bank deregulation leading to lax lending practices and easy credit.
Labour is making a step in the right direction with these measures, but it has said nothing about dealing with the underlying issue.
Mortgages should be restricted to 3 times income, as they once were.
Interest rates should be returned to normal.
Stamp duty on sales should be based on original purchase price + depreciated value of improvements + wage price inflation while owned, with the seller paying a much higher stamp duty if the sale price exceeds this figure.
Bring down the purchase cost of housing and rental costs will fall.....as will the housing benefit bill. More money will be free up to circulate in the productive economy, creating jobs, etc.
Sadly, this article convinces me that Labour have only got it half right.
Restricted to 3 times income? Shouldn't it be restricted to 3 times the largest wage only? Then it protects against the one person in 2 income households (of which there are many - mine included) losing their job and leaves those with only one wage going into a house on a more level playing field with those with 2. And why do we need Stamp Duty - it is a nonsense tax and just another way of overtaxing those already being taxed on buying their home. I mean - what costs does Stamp Duty actually cover?

The only problem in all this is what will happen to those who have bought at the top of the housing price boom through no fault of their own other than those were the market conditions at the time? They will end up in negative equity for years - and the problem will be for them is that a house purchase is a tie. If they decide to move to get a better job or have to move to get a job they will likely not be able to finance a move to live elsewhere.

Trouble is - whatever you propose there will be losers on either side of the divide simply because the market conditions that exist now have become well established.
Oh, believe me, i'd be happy if it were restricted to 50% of a single income, but the three times figure has been posited as a figure that will cause a fall in prices, but at a rate below the rate at which people are paying down their equity. So it will result in fewer losers.
As for stamp duty, currently it is paid by the buyer. Changing it to the seller, and increasing the percentage, while linking it as in the formula i detailed, would effectively ensure that house prices only rose in line with incomes - i.e., they would be perpetually affordable.
Finally, i completely understand that these measures would result in some people losing their homes - although fewer than you might expect, only around 3% if houses fell by the 50% that serious economists claim that they need to. However, if these measures are not taken, then entire generations will be forced to live in poverty.
As a final thought: if you bought a house 25 years ago and you have paid it off, then the increase in value has been such that you have effectively been paid to live in the house as the increase in value is far more than the interest you have paid. Something to bear in mind when you hear the baby boomers complaining :-).
[quote][p][bold]ksmain[/bold] wrote: [quote][p][bold]JamesYoung[/bold] wrote: The biggest cause of the cost of living crisis is not high housing costs. The biggest cause of the cost of living crisis is bank deregulation leading to lax lending practices and easy credit. Labour is making a step in the right direction with these measures, but it has said nothing about dealing with the underlying issue. Mortgages should be restricted to 3 times income, as they once were. Interest rates should be returned to normal. Stamp duty on sales should be based on original purchase price + depreciated value of improvements + wage price inflation while owned, with the seller paying a much higher stamp duty if the sale price exceeds this figure. Bring down the purchase cost of housing and rental costs will fall.....as will the housing benefit bill. More money will be free up to circulate in the productive economy, creating jobs, etc. Sadly, this article convinces me that Labour have only got it half right.[/p][/quote]Restricted to 3 times income? Shouldn't it be restricted to 3 times the largest wage only? Then it protects against the one person in 2 income households (of which there are many - mine included) losing their job and leaves those with only one wage going into a house on a more level playing field with those with 2. And why do we need Stamp Duty - it is a nonsense tax and just another way of overtaxing those already being taxed on buying their home. I mean - what costs does Stamp Duty actually cover? The only problem in all this is what will happen to those who have bought at the top of the housing price boom through no fault of their own other than those were the market conditions at the time? They will end up in negative equity for years - and the problem will be for them is that a house purchase is a tie. If they decide to move to get a better job or have to move to get a job they will likely not be able to finance a move to live elsewhere. Trouble is - whatever you propose there will be losers on either side of the divide simply because the market conditions that exist now have become well established.[/p][/quote]Oh, believe me, i'd be happy if it were restricted to 50% of a single income, but the three times figure has been posited as a figure that will cause a fall in prices, but at a rate below the rate at which people are paying down their equity. So it will result in fewer losers. As for stamp duty, currently it is paid by the buyer. Changing it to the seller, and increasing the percentage, while linking it as in the formula i detailed, would effectively ensure that house prices only rose in line with incomes - i.e., they would be perpetually affordable. Finally, i completely understand that these measures would result in some people losing their homes - although fewer than you might expect, only around 3% if houses fell by the 50% that serious economists claim that they need to. However, if these measures are not taken, then entire generations will be forced to live in poverty. As a final thought: if you bought a house 25 years ago and you have paid it off, then the increase in value has been such that you have effectively been paid to live in the house as the increase in value is far more than the interest you have paid. Something to bear in mind when you hear the baby boomers complaining :-). JamesYoung
  • Score: 0

1:26pm Sun 4 May 14

ksmain says...

JamesYoung wrote:
ksmain wrote:
JamesYoung wrote:
The biggest cause of the cost of living crisis is not high housing costs. The biggest cause of the cost of living crisis is bank deregulation leading to lax lending practices and easy credit.
Labour is making a step in the right direction with these measures, but it has said nothing about dealing with the underlying issue.
Mortgages should be restricted to 3 times income, as they once were.
Interest rates should be returned to normal.
Stamp duty on sales should be based on original purchase price + depreciated value of improvements + wage price inflation while owned, with the seller paying a much higher stamp duty if the sale price exceeds this figure.
Bring down the purchase cost of housing and rental costs will fall.....as will the housing benefit bill. More money will be free up to circulate in the productive economy, creating jobs, etc.
Sadly, this article convinces me that Labour have only got it half right.
Restricted to 3 times income? Shouldn't it be restricted to 3 times the largest wage only? Then it protects against the one person in 2 income households (of which there are many - mine included) losing their job and leaves those with only one wage going into a house on a more level playing field with those with 2. And why do we need Stamp Duty - it is a nonsense tax and just another way of overtaxing those already being taxed on buying their home. I mean - what costs does Stamp Duty actually cover?

The only problem in all this is what will happen to those who have bought at the top of the housing price boom through no fault of their own other than those were the market conditions at the time? They will end up in negative equity for years - and the problem will be for them is that a house purchase is a tie. If they decide to move to get a better job or have to move to get a job they will likely not be able to finance a move to live elsewhere.

Trouble is - whatever you propose there will be losers on either side of the divide simply because the market conditions that exist now have become well established.
Oh, believe me, i'd be happy if it were restricted to 50% of a single income, but the three times figure has been posited as a figure that will cause a fall in prices, but at a rate below the rate at which people are paying down their equity. So it will result in fewer losers.
As for stamp duty, currently it is paid by the buyer. Changing it to the seller, and increasing the percentage, while linking it as in the formula i detailed, would effectively ensure that house prices only rose in line with incomes - i.e., they would be perpetually affordable.
Finally, i completely understand that these measures would result in some people losing their homes - although fewer than you might expect, only around 3% if houses fell by the 50% that serious economists claim that they need to. However, if these measures are not taken, then entire generations will be forced to live in poverty.
As a final thought: if you bought a house 25 years ago and you have paid it off, then the increase in value has been such that you have effectively been paid to live in the house as the increase in value is far more than the interest you have paid. Something to bear in mind when you hear the baby boomers complaining :-).
I think more the point I was making is that why should the system be changed so you create another set of victims.

I bought my first house in 1991 just after the last house boom in the late 80s for which I resided at home for the previous 3 years saving up to fund the deposit and pay any fees. I moved again in 2000 as by then I had a family just before the last boom as we sorely needed more space. I will still end up paying a mortgage value of £260K by the end of my mortgage term to own a property of current estimated value of £170-£175K. If house prices cheapen dramatically to make the whole system 'affordable to all' then if I have to sell and buy again the amount I have already paid to own my home will be buying me much less (ie it cheapens the asset I have spent a lot of money buying).

Now while I accept that I may be one of the lucky ones to be able to afford to buy my own home, I would be a bit upset if all the money I have paid out is buying me much less, if the system is made affordable for all. I mean it isn't as if I have been greedy in that the house is my home, it isn't being rented out and I am not making a quick buck out of it.

I really do sympathise with those trying to buy property in the current market, that has been made much more difficult in no small part IMO by under-regulated and over-zealous lending by financial institutions. You need to come up with a system that allows those trying to buy to have the choice to get on the market, while protecting those who have managed to get on it to protect the value of the asset they have already paid/are paying a lot for under the current system. And I don't believe there is an easy answer.
[quote][p][bold]JamesYoung[/bold] wrote: [quote][p][bold]ksmain[/bold] wrote: [quote][p][bold]JamesYoung[/bold] wrote: The biggest cause of the cost of living crisis is not high housing costs. The biggest cause of the cost of living crisis is bank deregulation leading to lax lending practices and easy credit. Labour is making a step in the right direction with these measures, but it has said nothing about dealing with the underlying issue. Mortgages should be restricted to 3 times income, as they once were. Interest rates should be returned to normal. Stamp duty on sales should be based on original purchase price + depreciated value of improvements + wage price inflation while owned, with the seller paying a much higher stamp duty if the sale price exceeds this figure. Bring down the purchase cost of housing and rental costs will fall.....as will the housing benefit bill. More money will be free up to circulate in the productive economy, creating jobs, etc. Sadly, this article convinces me that Labour have only got it half right.[/p][/quote]Restricted to 3 times income? Shouldn't it be restricted to 3 times the largest wage only? Then it protects against the one person in 2 income households (of which there are many - mine included) losing their job and leaves those with only one wage going into a house on a more level playing field with those with 2. And why do we need Stamp Duty - it is a nonsense tax and just another way of overtaxing those already being taxed on buying their home. I mean - what costs does Stamp Duty actually cover? The only problem in all this is what will happen to those who have bought at the top of the housing price boom through no fault of their own other than those were the market conditions at the time? They will end up in negative equity for years - and the problem will be for them is that a house purchase is a tie. If they decide to move to get a better job or have to move to get a job they will likely not be able to finance a move to live elsewhere. Trouble is - whatever you propose there will be losers on either side of the divide simply because the market conditions that exist now have become well established.[/p][/quote]Oh, believe me, i'd be happy if it were restricted to 50% of a single income, but the three times figure has been posited as a figure that will cause a fall in prices, but at a rate below the rate at which people are paying down their equity. So it will result in fewer losers. As for stamp duty, currently it is paid by the buyer. Changing it to the seller, and increasing the percentage, while linking it as in the formula i detailed, would effectively ensure that house prices only rose in line with incomes - i.e., they would be perpetually affordable. Finally, i completely understand that these measures would result in some people losing their homes - although fewer than you might expect, only around 3% if houses fell by the 50% that serious economists claim that they need to. However, if these measures are not taken, then entire generations will be forced to live in poverty. As a final thought: if you bought a house 25 years ago and you have paid it off, then the increase in value has been such that you have effectively been paid to live in the house as the increase in value is far more than the interest you have paid. Something to bear in mind when you hear the baby boomers complaining :-).[/p][/quote]I think more the point I was making is that why should the system be changed so you create another set of victims. I bought my first house in 1991 just after the last house boom in the late 80s for which I resided at home for the previous 3 years saving up to fund the deposit and pay any fees. I moved again in 2000 as by then I had a family just before the last boom as we sorely needed more space. I will still end up paying a mortgage value of £260K by the end of my mortgage term to own a property of current estimated value of £170-£175K. If house prices cheapen dramatically to make the whole system 'affordable to all' then if I have to sell and buy again the amount I have already paid to own my home will be buying me much less (ie it cheapens the asset I have spent a lot of money buying). Now while I accept that I may be one of the lucky ones to be able to afford to buy my own home, I would be a bit upset if all the money I have paid out is buying me much less, if the system is made affordable for all. I mean it isn't as if I have been greedy in that the house is my home, it isn't being rented out and I am not making a quick buck out of it. I really do sympathise with those trying to buy property in the current market, that has been made much more difficult in no small part IMO by under-regulated and over-zealous lending by financial institutions. You need to come up with a system that allows those trying to buy to have the choice to get on the market, while protecting those who have managed to get on it to protect the value of the asset they have already paid/are paying a lot for under the current system. And I don't believe there is an easy answer. ksmain
  • Score: 0

10:39pm Wed 7 May 14

JamesYoung says...

ksmain wrote:
JamesYoung wrote:
ksmain wrote:
JamesYoung wrote: The biggest cause of the cost of living crisis is not high housing costs. The biggest cause of the cost of living crisis is bank deregulation leading to lax lending practices and easy credit. Labour is making a step in the right direction with these measures, but it has said nothing about dealing with the underlying issue. Mortgages should be restricted to 3 times income, as they once were. Interest rates should be returned to normal. Stamp duty on sales should be based on original purchase price + depreciated value of improvements + wage price inflation while owned, with the seller paying a much higher stamp duty if the sale price exceeds this figure. Bring down the purchase cost of housing and rental costs will fall.....as will the housing benefit bill. More money will be free up to circulate in the productive economy, creating jobs, etc. Sadly, this article convinces me that Labour have only got it half right.
Restricted to 3 times income? Shouldn't it be restricted to 3 times the largest wage only? Then it protects against the one person in 2 income households (of which there are many - mine included) losing their job and leaves those with only one wage going into a house on a more level playing field with those with 2. And why do we need Stamp Duty - it is a nonsense tax and just another way of overtaxing those already being taxed on buying their home. I mean - what costs does Stamp Duty actually cover? The only problem in all this is what will happen to those who have bought at the top of the housing price boom through no fault of their own other than those were the market conditions at the time? They will end up in negative equity for years - and the problem will be for them is that a house purchase is a tie. If they decide to move to get a better job or have to move to get a job they will likely not be able to finance a move to live elsewhere. Trouble is - whatever you propose there will be losers on either side of the divide simply because the market conditions that exist now have become well established.
Oh, believe me, i'd be happy if it were restricted to 50% of a single income, but the three times figure has been posited as a figure that will cause a fall in prices, but at a rate below the rate at which people are paying down their equity. So it will result in fewer losers. As for stamp duty, currently it is paid by the buyer. Changing it to the seller, and increasing the percentage, while linking it as in the formula i detailed, would effectively ensure that house prices only rose in line with incomes - i.e., they would be perpetually affordable. Finally, i completely understand that these measures would result in some people losing their homes - although fewer than you might expect, only around 3% if houses fell by the 50% that serious economists claim that they need to. However, if these measures are not taken, then entire generations will be forced to live in poverty. As a final thought: if you bought a house 25 years ago and you have paid it off, then the increase in value has been such that you have effectively been paid to live in the house as the increase in value is far more than the interest you have paid. Something to bear in mind when you hear the baby boomers complaining :-).
I think more the point I was making is that why should the system be changed so you create another set of victims. I bought my first house in 1991 just after the last house boom in the late 80s for which I resided at home for the previous 3 years saving up to fund the deposit and pay any fees. I moved again in 2000 as by then I had a family just before the last boom as we sorely needed more space. I will still end up paying a mortgage value of £260K by the end of my mortgage term to own a property of current estimated value of £170-£175K. If house prices cheapen dramatically to make the whole system 'affordable to all' then if I have to sell and buy again the amount I have already paid to own my home will be buying me much less (ie it cheapens the asset I have spent a lot of money buying). Now while I accept that I may be one of the lucky ones to be able to afford to buy my own home, I would be a bit upset if all the money I have paid out is buying me much less, if the system is made affordable for all. I mean it isn't as if I have been greedy in that the house is my home, it isn't being rented out and I am not making a quick buck out of it. I really do sympathise with those trying to buy property in the current market, that has been made much more difficult in no small part IMO by under-regulated and over-zealous lending by financial institutions. You need to come up with a system that allows those trying to buy to have the choice to get on the market, while protecting those who have managed to get on it to protect the value of the asset they have already paid/are paying a lot for under the current system. And I don't believe there is an easy answer.
I completely agree, but the irony is that i don't need to come up with any system. The value of your house should be determined by free market forces. In your response, you have effectively admitted that the only reason your home is "worth" what it is is because of lax lending practices. By extension, a reversal of these practices, which i advocate, would not rob you of anything but would simply return the value of your house to it's proper level. When you buy a home, you accept it may go up or down. When i bought my first house with my then wife, we were in negative equity for a while.
However, when you bought your house, you bought it knowing that you would pay back more than what it was worth at the point you bought it. No different,in fact, to buying a car or a washing machine on credit.
In 2007, prices should have fallen dramatically as they did in Ireland and other places. They didn't, because the government launched the Funding for Lending scheme, which was supposed to channel money into business lending. It didn't - 95% of it went into mortgage lending. Then the government introduced stamp duty holidays, then Help to Buy, then Help to Buy 2. All of these schemes are using money that the government has effectively printed. Through the BoE, interest rates have been held down, too.
What has this meant?
The banks' preference for safe investments has meant that lending went to homeowners not businesses. Result: higher unemployment, particularly amongst the young.
The money printed created an oversupply of money. Result: inflation, which particularly affects those who have to rent a home, because rents are increased based on inflation.
Interest rates reduced the value of money in the bank. Investors piled into buy to let property, where they could enjoy tax breaks not available to private buyers. Result: young people become even more priced out of buying housing and forced to pay increasing market rents.
I could go on and on, but the point is that your house is actually worth several tens of percents less than you think it is, because without intervention, that is what it would be worth.
The system i would have designed would have been "do nothing". No subsidised lending to homeowners. No stamp duty holidays. Increased regulation of the mortgage market. In short, a return to financial prudence. Sure, some people would have lost their homes and would have gone bankrupt. In six years, their records would have been expunged and they could have bought again, this time at a lower price.
It will happen, inevitably. The deputy governor of the BoE warned today of a "severe correction" in house prices. The problem is that the more the bubble inflates before that happens, the more people will be crippled by it.
Sadly, though, the government relies on people like you: people who will vote for whatever party will guarantee that their house remains "worth" what they think it is. They will bankrupt us all trying to push this snowball up hill.
For the record, i sold my house during a divorce in 2011. I have a deposit and an income that is more than enough to buy, but I fear that bad things are coming and i'll sit back and wait for the right moment.
[quote][p][bold]ksmain[/bold] wrote: [quote][p][bold]JamesYoung[/bold] wrote: [quote][p][bold]ksmain[/bold] wrote: [quote][p][bold]JamesYoung[/bold] wrote: The biggest cause of the cost of living crisis is not high housing costs. The biggest cause of the cost of living crisis is bank deregulation leading to lax lending practices and easy credit. Labour is making a step in the right direction with these measures, but it has said nothing about dealing with the underlying issue. Mortgages should be restricted to 3 times income, as they once were. Interest rates should be returned to normal. Stamp duty on sales should be based on original purchase price + depreciated value of improvements + wage price inflation while owned, with the seller paying a much higher stamp duty if the sale price exceeds this figure. Bring down the purchase cost of housing and rental costs will fall.....as will the housing benefit bill. More money will be free up to circulate in the productive economy, creating jobs, etc. Sadly, this article convinces me that Labour have only got it half right.[/p][/quote]Restricted to 3 times income? Shouldn't it be restricted to 3 times the largest wage only? Then it protects against the one person in 2 income households (of which there are many - mine included) losing their job and leaves those with only one wage going into a house on a more level playing field with those with 2. And why do we need Stamp Duty - it is a nonsense tax and just another way of overtaxing those already being taxed on buying their home. I mean - what costs does Stamp Duty actually cover? The only problem in all this is what will happen to those who have bought at the top of the housing price boom through no fault of their own other than those were the market conditions at the time? They will end up in negative equity for years - and the problem will be for them is that a house purchase is a tie. If they decide to move to get a better job or have to move to get a job they will likely not be able to finance a move to live elsewhere. Trouble is - whatever you propose there will be losers on either side of the divide simply because the market conditions that exist now have become well established.[/p][/quote]Oh, believe me, i'd be happy if it were restricted to 50% of a single income, but the three times figure has been posited as a figure that will cause a fall in prices, but at a rate below the rate at which people are paying down their equity. So it will result in fewer losers. As for stamp duty, currently it is paid by the buyer. Changing it to the seller, and increasing the percentage, while linking it as in the formula i detailed, would effectively ensure that house prices only rose in line with incomes - i.e., they would be perpetually affordable. Finally, i completely understand that these measures would result in some people losing their homes - although fewer than you might expect, only around 3% if houses fell by the 50% that serious economists claim that they need to. However, if these measures are not taken, then entire generations will be forced to live in poverty. As a final thought: if you bought a house 25 years ago and you have paid it off, then the increase in value has been such that you have effectively been paid to live in the house as the increase in value is far more than the interest you have paid. Something to bear in mind when you hear the baby boomers complaining :-).[/p][/quote]I think more the point I was making is that why should the system be changed so you create another set of victims. I bought my first house in 1991 just after the last house boom in the late 80s for which I resided at home for the previous 3 years saving up to fund the deposit and pay any fees. I moved again in 2000 as by then I had a family just before the last boom as we sorely needed more space. I will still end up paying a mortgage value of £260K by the end of my mortgage term to own a property of current estimated value of £170-£175K. If house prices cheapen dramatically to make the whole system 'affordable to all' then if I have to sell and buy again the amount I have already paid to own my home will be buying me much less (ie it cheapens the asset I have spent a lot of money buying). Now while I accept that I may be one of the lucky ones to be able to afford to buy my own home, I would be a bit upset if all the money I have paid out is buying me much less, if the system is made affordable for all. I mean it isn't as if I have been greedy in that the house is my home, it isn't being rented out and I am not making a quick buck out of it. I really do sympathise with those trying to buy property in the current market, that has been made much more difficult in no small part IMO by under-regulated and over-zealous lending by financial institutions. You need to come up with a system that allows those trying to buy to have the choice to get on the market, while protecting those who have managed to get on it to protect the value of the asset they have already paid/are paying a lot for under the current system. And I don't believe there is an easy answer.[/p][/quote]I completely agree, but the irony is that i don't need to come up with any system. The value of your house should be determined by free market forces. In your response, you have effectively admitted that the only reason your home is "worth" what it is is because of lax lending practices. By extension, a reversal of these practices, which i advocate, would not rob you of anything but would simply return the value of your house to it's proper level. When you buy a home, you accept it may go up or down. When i bought my first house with my then wife, we were in negative equity for a while. However, when you bought your house, you bought it knowing that you would pay back more than what it was worth at the point you bought it. No different,in fact, to buying a car or a washing machine on credit. In 2007, prices should have fallen dramatically as they did in Ireland and other places. They didn't, because the government launched the Funding for Lending scheme, which was supposed to channel money into business lending. It didn't - 95% of it went into mortgage lending. Then the government introduced stamp duty holidays, then Help to Buy, then Help to Buy 2. All of these schemes are using money that the government has effectively printed. Through the BoE, interest rates have been held down, too. What has this meant? The banks' preference for safe investments has meant that lending went to homeowners not businesses. Result: higher unemployment, particularly amongst the young. The money printed created an oversupply of money. Result: inflation, which particularly affects those who have to rent a home, because rents are increased based on inflation. Interest rates reduced the value of money in the bank. Investors piled into buy to let property, where they could enjoy tax breaks not available to private buyers. Result: young people become even more priced out of buying housing and forced to pay increasing market rents. I could go on and on, but the point is that your house is actually worth several tens of percents less than you think it is, because without intervention, that is what it would be worth. The system i would have designed would have been "do nothing". No subsidised lending to homeowners. No stamp duty holidays. Increased regulation of the mortgage market. In short, a return to financial prudence. Sure, some people would have lost their homes and would have gone bankrupt. In six years, their records would have been expunged and they could have bought again, this time at a lower price. It will happen, inevitably. The deputy governor of the BoE warned today of a "severe correction" in house prices. The problem is that the more the bubble inflates before that happens, the more people will be crippled by it. Sadly, though, the government relies on people like you: people who will vote for whatever party will guarantee that their house remains "worth" what they think it is. They will bankrupt us all trying to push this snowball up hill. For the record, i sold my house during a divorce in 2011. I have a deposit and an income that is more than enough to buy, but I fear that bad things are coming and i'll sit back and wait for the right moment. JamesYoung
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