Should the government "cap" house values?
Poll: Should the government "cap" house values?
Total Members Polled: 333
Discussion
lol oh dear. I didnt mean this current goverment, or indeed anyone specific. And im not talking a total blanket value for all houses of a certain size /location as obviously all property is different. Lets just imagine that a professional independent body was responsible for valuing property prior to sale? And that affordability was a key criteria?
Mike400 said:
lol oh dear. I didnt mean this current goverment, or indeed anyone specific. And im not talking a total blanket value for all houses of a certain size /location as obviously all property is different. Lets just imagine that a professional independent body was responsible for valuing property prior to sale? And that affordability was a key criteria?
pleaseturn the PC off
Westy Pre-Lit said:
I'm guessing the OP lives in a s
t hole and wants a large house for nothing.
I nominate this thread for the most stupidest thread ever posted.
not quite, i live in a reasonable house, with a tiny mortgage and would have much to gain from selling, even now. Plus i never actually said I agreed with the idea, just a thought!t hole and wants a large house for nothing. I nominate this thread for the most stupidest thread ever posted.
And now, for Mike400's next ideas:-
1) how about some local bureaucrat telling you how much you should earn?
2) how about some local bureaucrat telling you how much you should spend on a car?
3) how about some local bureaucrat telling you how much you should buy your kids for Xmas?
4) how about some local bureaucrat telling you anything at all?
With all due respect (and I mean that) it's utter c0ck!
HTH
1) how about some local bureaucrat telling you how much you should earn?
2) how about some local bureaucrat telling you how much you should spend on a car?
3) how about some local bureaucrat telling you how much you should buy your kids for Xmas?
4) how about some local bureaucrat telling you anything at all?
With all due respect (and I mean that) it's utter c0ck!
HTH
you lot seem a touch tetchy this evening! I just think there must be some system that would better prevent massive over inflation re house prices and suggested its the role of our elected (or unelected as is the case!) leaders to perhaps intervene when things get a bit silly. Im all for making my own choices in life but just think someone should help us keep a check on certain things.
Mike400 said:
you lot seem a touch tetchy this evening! I just think there must be some system that would better prevent massive over inflation re house prices and suggested its the role of our elected (or unelected as is the case!) leaders to perhaps intervene when things get a bit silly. Im all for making my own choices in life but just think someone should help us keep a check on certain things.
Its called communism and it definately has it flaws. 
Mike400 said:
you lot seem a touch tetchy this evening! I just think there must be some system that would better prevent massive over inflation re house prices and suggested its the role of our elected (or unelected as is the case!) leaders to perhaps intervene when things get a bit silly. Im all for making my own choices in life but just think someone should help us keep a check on certain things.
House prices are the effect not the cause of other "certain things" that might have been better managed - in particular: credit.I believe in free markets and minimum regulation. Prices should be determined by supply and demand with competition as its "regulator" - competition as regulator tends to hold prices closer to a "cost plus basis" rather than a cartel-like "what the market will stand basis". All good in my book.
The packaging of finance as products is where this went tits up. Money isn't a product. Talk about "creative accounting" and we know what that's innuendo for.. "Creative financial products" fall into this arena too as far as I am concerned and Gordon Brown praising the UK finance sector for its creativity is one of many soundbites that sum up his blithering incompetence, ignorance and lack of foresight.
When people can't afford something, the price is too high. it won't sell. A price adjustment is forced there and then. With the housing market, the most desirable areas naturally attract a premium - and could be afforded by a select few. The financial services industry then empowered a lot more people than "a select few" to borrow vast sums of money with new "mortgage products", some based on the assumption that house prices would forever rise (>100% mortgages) and some taking the pragmatic view that most people would always have a mortgage (4x, 5x, 6x ...10x and "lifetime"). Virtually anybody could borrow virtually any amount of money. House prices soared. The runaway train could have been arrested at the point that more conventional 75%/3x income mortgages were insufficient - that would have forced a market correction, maybe a bit of a recession even.
The banks caused house prices to soar to levels beyond supply-and-demand and there are at least a couple of things wrong with the market dynamic relating to banks.
Firstly, the banks behave like a cartel, and there are too few of them. (The cartel behaviour is one area in which a government might have interfered on behalf of the electorate, although I remain ambivalent about even this intervention). Cartel actions wouldn't be such a problem if banks confined their activities to providing genuine working capital and clearing services. The scope for competition would probably be limited to choosing a favourite cleavage to study over the counter or the branch nearest to the pub. Historically "risk capital" or "investment capital" was not what High Street banks did. It started to go really wrong when banks acquired "investment arms", stirred it all up with their retail business and got "creative" (not to mention careless) on a grand scale.
Secondly, the banks took the risk and - as happens with any other overstretched business/individual - should have been punished by the market and gone bust. Shoring them up with tax bucks should not have happened, that's an abuse of government. Bust banks is a scary prospect but it's just dessert for an industry that took ridiculous risks for that industry to go broke. Look past the rhetoric of what a nightmare a bust bank would be... it wouldn't. But an alternative to going bust - other than bail-out - is a revaluation. The banks' assets haven't turned to zero, they've merely turned out to be worth considerably less than presented in their accounts. If all deposits and loans were written down by that factor, that factor is how much every depositor's account would go down and every borrower's loan should go down too. That would be equitable and in the public interest - it would also stimulate the economy because reducing the debt overhead of the population would have more impact on consumer spending that 2.5% off VAT. What did we get instead? A load of scaremongering about the end of the world being nigh if banks collapsed, in order to legitimise bankrupting the country with a bailout. The consequence of the bailout (and its "pitch") is that people aren't spending, banks aren't lending, we are all worse off and looking forward to a tax bombshell some day.
The market is democracy at its best - a product is up for you to vote for with your hard-earned 24/7. When politicians interfere with markets because they like/dislike one aspect of it, the natural order of things always goes awry. Markets kind of "float" on mass consumer behaviour. When a politician - metaphorically speaking - sits his fat arse on part of a market, it no longer floats or hovers properly, it's skewed. it doesn't matter what the intervention is, the effect is always a balls-up. This applies to governments attempting to fix a balls-up with further intervention of some kind - two wrongs don't make a right. Governments are useless at predicting consumer behaviour, hopeless at identifying consequences of their actions. They cannot distinguish between the meaning of "govern" and "control".
For that reason I voted "No" - the hell government should have anything to do with house prices.
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