tag:blogger.com,1999:blog-1141932539860553199.post4200721193488227435..comments2024-03-05T10:52:24.691+00:00Comments on Mark Wadsworth: John Redwood on House PricesMark Wadsworthhttp://www.blogger.com/profile/07733511175178098449noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-1141932539860553199.post-2447831358627658312013-10-01T20:59:29.876+01:002013-10-01T20:59:29.876+01:00TS?Kj, following the numbering
7) yes, if houses ...TS?Kj, following the numbering<br /><br />7) yes, if houses are wildly overpriced then people are scared of a 10% drop. If they are cheap, then nobody cares.<br /><br />Nequity is, in the grander scheme of things, not an issue.<br /><br />e.g. you bought a £200,000 house with a 25 year 4% mortgage and it falls in value to £100,000.<br /><br />The govt can tell the bank to replace it with a £100,000 25 year 8% mortgage, sorted.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-73502320446340533562013-10-01T20:00:37.697+01:002013-10-01T20:00:37.697+01:00Kj/Mark/Lola,
Exactly.
There is the neg eq probl...Kj/Mark/Lola,<br /><br />Exactly.<br /><br />There is the neg eq problem, but if you consider a cap and int mortgage, you'd have paid off some of the capital anyway. And on top of that, if your house falls 10%, so does the one above it. So, you've paid off maybe a couple of grand. You then have to find maybe £5K to cover the neg eq, BUT, you save £10K on the £110K house that is now worth around £100K.<br /><br />And if we went back to the sanity of 25yr 80% cap and int mortgages for FTBs as the norm, we wouldn't have this problem in the first place.Tim Almondhttps://www.blogger.com/profile/13369256383976094670noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-25089956279910830142013-10-01T18:57:05.561+01:002013-10-01T18:57:05.561+01:00Why would people want to buy a home if they though...<i>Why would people want to buy a home if they thought it could be 10% cheaper in a year or two?</i><br /><br />True socialist coming out there, that´s the Keynesian argument for inflation. Everyone would suddenly stop buying goods if it became apparent that they would be cheaper and better in a year. Kind of like how it should be and has been with consumer durables for the last century or so. Kjhttps://www.blogger.com/profile/13530243002915410700noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-41009932805711706062013-10-01T09:59:49.002+01:002013-10-01T09:59:49.002+01:00MW - Quite. But a lot of the comments on the thre...MW - Quite. But a lot of the comments on the thread folowing JR's post are critical - which must be a good sign. Mustn't it? Please?Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-66712261225855154822013-09-30T21:45:40.209+01:002013-09-30T21:45:40.209+01:00"Why would people want to buy a home if they ...<i>"Why would people want to buy a home if they thought it could be 10% cheaper in a year or two?(7)"</i><br /><br />That's fucking bollocks as well.<br /><br />Back in the early/mid 1990s, houses were cheap and expected - incorrectly as it turns out - to get cheaper.<br /><br />But the reasonably sane tenant/FTB calculated thusly:<br /><br />"My rent is £7,000 a year but I could buy a house for £70,000. <br /><br />Even if prices fall by ten per cent next year, I'm not actually much worse off because what I "lost" in selling price I saved in rent, and I can still easily trade up.<br /><br />Further, even if my house is worth £zero in ten years' time - which is highly bloody unlikely, to say the least - I'm still no worse off than I would have beeb renting and I can live rent free for the rest of my life."<br /><br />Otherwise why would anybody buy a car? You know they are going to fall in value, but it's still cheaper owning a car than hiring one every day.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-79195878600297418842013-09-30T19:47:15.963+01:002013-09-30T19:47:15.963+01:00And there is no such thing as an "empty home&...And there is no such thing as an "empty home", that's what we politely refer to as "a building".Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-91538643923866616772013-09-30T19:43:03.486+01:002013-09-30T19:43:03.486+01:00Good one.
I got as far as your bullet 3 and gave ...Good one.<br /><br />I got as far as your bullet 3 and gave in. There is a clear correlation between rising prices and falling levels of owner-occupation. You can't argue with people like that. Pure distilled Home-Owner-Ism.<br /><br />And 5 is even worse, coming from the über NIMBY, the Tories campaign flat out for less new construction, that's one of their core beliefs. Labour members/voters are probably just as NIMBY on a personal level but not as a matter of party policy.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-11552102896102725962013-09-30T19:33:37.011+01:002013-09-30T19:33:37.011+01:006. Well it does worry the banks, because people ca...6. Well it does worry the banks, because people can default and the banks will lose money, so for the Bankers' Party, negative equity is definitely a Bad Thing.Bayardhttps://www.blogger.com/profile/15211150959757982948noreply@blogger.com