5% limit on house price increases

Discussion in 'Motorhome Chat' started by estcres, Sep 15, 2013.

  1. estcres

    estcres Read Only Funster

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    The new boss at the Bank of England, Mark Carney, has come up with an idea that house price rises should be limited to 5% per year.

    Can anyone explain to me how this would work?.

    Goes against the principle of the Free Market and the law of supply and demand.
     
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  2. motorhomelover

    motorhomelover

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    That is yesterdays thinking.
    The new way forward is to cap any potential growth to the man in the street.
    We can not have the poor getting richer now can we :Doh:
     
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  3. Chris

    Chris Funster Life Member

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    A sure way to trigger a buying and selling frenzy until it is decided they won't actually implement it:Doh:
     
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  4. bigfoot

    bigfoot Funster

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    I wish he would concentrate his efforts on dubious practices within the banking sector especially bonuses whether they are successful or failure.
     
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  5. estcres

    estcres Read Only Funster

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    The trouble with the financial sector is it produces vast amounts of money for the Treasury in various forms of taxation.

    There is not a politician in the world who will shoot the "Goose that lays the Golden Egg"

    I was listening to a programme on the TV on Friday when it was stated that the financial sector produced the equivalent of 400% of Gross Domestic Product (GDP) in 2012

    Thats huge amounts of money

    This is down to Maggie who liberated the financial markets system and various governments, both Conservative and Labour, who have continued to encourage it by relaxing regulation.

    We stand more chance of winning the Lottery every week than someone in power really altering the financial market system.
     
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  6. JeanLuc

    JeanLuc Funster

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    For the record, Mark Carney has not come up with the idea of limiting house price inflation to 5% p.a. That was a suggestion, a couple of days ago, from RICS that the BoE should be required to act in order to prevent a housing bubble.
    Regardless of free market operation, the very last thing the UK needs now is another housing bubble. It will take several more years for the damaging effects of the 2000-2008 bubble to be washed out of the system. In fact, there is no free market in housing in the UK as the supply is artificially limited by planning constraints, thereby driving up prices, which leads to a false sense of security amongst mortgagors that they now have equity in their property that can be released as further debt. The subsequent injudicious lending of capital against an artificially inflated asset value, to people who are increasingly at the margins of what their income can support, simply leads to an upward spiral that must end at some point in a crash - MADNESS!

    So, if the BoE decides to take up the RICS idea and can act to break the circle - good on them I say.
     
  7. GJH

    GJH Funster Life Member

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    Yes, the last thing we need is another housing bubble but is there actually a risk of one? Somebody said on TV the other day that the RICS figures are skewed by large rises in London. The rest of the country is experiencing much smaller increases.

    The sooner we get away from the idea that everything has to revolve round London and people realise that it is actually possible to live and locate industry elsewhere the better.
     
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  8. estcres

    estcres Read Only Funster

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    You must be a supporter of HS2 then?:Rofl1::Rofl1:
     
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  9. GJH

    GJH Funster Life Member

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    Not at all. If anything revolves round some sort of spurious need to be in London then that does :Rofl1:
     
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  10. estcres

    estcres Read Only Funster

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    Whilst I agree with you my question was "how will this work?" in otherwords how will it be implemented.
     
  11. sedge

    sedge Funster

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    Well bring in mind most of us don't know what our house was worth last year, when the estate agent says today that it's worth whatever and we stick it on the market, how the hell would we know what inflation figure that correlates to over last year, when we didn't ask anyone to value it?

    And it's no good saying consider the price of a similar house in your area, cos there isn't a single one I've ever encountered or heard about anywhere in our area or elsewhere, that's similar to ours !
     
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  12. estcres

    estcres Read Only Funster

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    HS2 is going to be the saviour of the planet, so our politicians keep informing us.

    Personnaly I think that £40 - £50 billion can be better spent elsewhere, maybe on lots more subsidies for Wind Turbines.:Rofl1::Rofl1::thumb:
     
  13. GJH

    GJH Funster Life Member

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    Good points Jenny. There is a bungalow near where Jill's Dad lives that has been in the market for 2 or 3 years - unmarried couple split up, man moved out, woman is supposed to sell to pay him his share but doesn't really want to (too complicated to go into the whole story).

    The reason the bungalow hasn't sold is that the price if 25% above the going rate for that type of property in that area. Factor that sort of thing into any survey and it's bound to affect the results.
     
  14. GJH

    GJH Funster Life Member

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    And solar panels please :Rofl1:
     
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