House Prices - Stability Is Needed

Posted on: 17/12/2012

It seems that "experts" (aka Estate Agents) are predicting a boom in house building and house prices.

Living in Croydon, I can see the results of the last boom. Unfinished buildings, vacant
over-priced flats and 2000 families in temporary accommodation because they have been evicted.
We need to learn from other countries. In most, buying a house is not seen as an investment for capital appreciation; it is about putting a roof over your head.

House and Commercial Property price increases should not be viewed as wealth creation. They are fueled by excessive bank lending. As we have seen in recent years, this inevitably leads to defaults and bank failures. 

The British Public - you and me - had to bale out the banks largely because they lent too much money to fund property purchases.

For once, we MUST learn from recent history. 

For example, no mortgage should be for more than 50% of the professionally assessed value of a property. Forcing buyers to invest from their own resources at least half of the cost of a property will curb price inflation. 

We also need rentals to become more acceptable in the UK. You don't need to own a castle to live in it!
In many countries, rental is the norm. House prices tend to remain stable in such markets, especially when rents are also partially controlled by Government intervention.

A house is a home, not a good investment for capital growth!


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