The Daily Mail has its knickers in a twist about how young hard working couples cannot afford to get on the housing ladder without help from middle aged hard working parents ( er…Daily Mail readers). The Council for Mortgage Lenders says action is needed. And the Conservative Party panders to this anger saying the situation “is not right”. There is a hint ( to appease Daily Mail readers) from some shit for brains housing minister, Grant Prisk, that the Government will take steps to address the “problem”. They are all wrong – they promote a ponzi scheme because it is popular to do so.
That young folks cannot “get on the housing ladder” is undeniable. That is because a) the banks will not lend unless you have a hefty deposit and b) prices ( in terms of price to income ratios) are by historic standards and in absolute terms too high.
Given that prices are too high it is exceptionally prudent of the banks to require steep deposits and having done their conkers on more or less everything they touched it is in no one’s interest (least of all the taxpayer who actually owns most of the banks) to force or bully them into making reckless loans in this area too.
So the only way to address this problem is for house prices to fall. One easy way for this to happen would be for the Government to stop propping up prices at the lower end of the market by providing far too generous housing benefit packages to folks who do not work. This allows those who do not work to pay fat rent cheques to private landlords which keep prices at levels which deny those who do work the chance to buy the same sort of properties.
And, of course, where do those housing benefit cheques come from? From the taxes of those who are working including… those who are now priced out of the market to buy a starter home. You might regard this as madness and of course it is. But no politician will actually do anything about it. You and I would at once change the housing benefit system so that he who pays the rent chooses where the recipient lives. At once all the benefit claimants in Islington can be packed off to live in deserted terraces in shit-hole Northern hell towns where the local council steal your kids if you are a euro sceptic. That would see house prices fall for lower end homes across the land where folks actually wanted to live. Problem solved. And the Government would save money.
But hang on there is a catch. If lower end house prices fall that would inevitably see all houses and flats (bar those owned by the global criminal elite in Central London) fall back a bit. And those parents who had taken out equity on their own homes to provide equity for their kids to buy lower end homes would see that equity head off to money heaven. As such this would be an electoral disaster for whichever party was brave enough to address the issue. For the Tories they would suffer a double whammy of being accused of bashing the poor – i.e. those living in houses working folk cannot afford to live in, at no cost to themselves, thanks to the taxes of those who cannot afford to live in the same house.
The housing market in bankrupt Britain is a bit of a ponzi scheme with taxpayer subsidies for those who do not work propping the whole thing up at the bottom. It would be easy to reform but such reform would meet universal opposition. It is simpler for those who want to sell Newspapers or get re-elected in 2015 to just hand out more and more subsidies and just let the merry go-round carry on.comments powered by Disqus