As house prices tumble


Here is a comment on a Daily Telegraph blog by commentator ‘dissavowed’ which makes interesting reading.

By Dissavowed

We have been priced out of housing for over a decade.

In 1997, according to the Office of National Statistics, the national average wage was £16,666.According to the Nationwide Building Society the Average House price in 1997 was £55k. £16,666/£55,000 = 3.3x salary.

* The Average FTB mortgage in 1997 was just £41.5k [CML]

By 2007, at the peak of the boom [according to the Office of National Statistics] the national average wage had risen to £23.5k
The Average House Price in 2007 was £185k.
£185,000/£23.5k = 7.8x salary

The national average salary in the UK has risen by around £6K from 1997 to 2007 as house prices have more than trebled.

The Average house price would need to fall by around 60% in value, from its peak 2007 valuation, to fall back in line with historically acceptable inflationary affordability of 3 – 3.5x salary

[Over two thirds of the UK earn less than average wage. In 2008 an ONS survey showed that over 6 million people earn £10k per annum or less. These included Hairdressers and Cleaners.]

Year after year we have seen house prices rise further and further out of our reach.

Forced to waste tens of thousands of pounds in rent. To a liar loan landlord. Because of Labours sheer, evil incompetence, and the banks greed and theft.

Everyone I know earns between £12k-£24k per annum.
From 1987 to 1997 the Average House Price rose from £40k to £55k.

A 33.3% rise over ten years.

From 1997 to 2007, the Average House Price rose from £55k to £190k [Nationwide Building Society figures]
A staggering 245.5% increase over the same period. [Ten years.]
Why did this happen?

1. “In America, the Glass-Steagall Act had protected deposit-taking commercial banks from the risky activities of the investment banks. Congress was effectively obliged to repeal the Act in 1999 because New York was losing its business to London, which had no such restrictions and the “light touch” regulation encouraged by Gordon Brown. Had Britain [Brown] enacted similar legislation to Glass-Steagall, the US Act would not have been repealed, the City would have made less money but the banking collapse in both America and Britain would have been avoided”

2. Complete failure to build social housing. Labour built , an average of 26,000 fewer homes each year between 1997 and 2009. Under Tony Blair and Gordon Brown, the country witnessed the lowest level of house building in peacetime since 1924

3. The tripartite system put in place by New Labour to regulate the economy was a direct cause for the financial crisis.
Lord Vallance, chairman of the House of Lords economics affairs committee. [Tasked to look into the causes of the Crisis]
* “It is clear that in the UK the tripartite authorities of the Bank of England, FSA, and the Treasury failed to maintain financial stability, in part because it was not clear who was in charge in a crisis and because not enough attention was paid to macro-prudential supervision – oversight of the aggregate effect of the actions of individual banks – in the period when ‘boom and bust’ occured.

4.In his 1997 budget, Brown abolished dividend tax credits on pension funds. Companies saw the writing on the wall and immediately ended their final salary pension schemes to new employees shortly after the ‘Brown raid’.* The value of pension funds have since lost around £5bn per year since the 1997 tax relief cuts. Pension funds holding the cash that almost everyone in the country had planned to use for our retirement have lost around £100 billion over 12 years. [1997-2007]
The advice Brown was given by this Treasury Paper, in 1997 was as follows:
‘The changes in incentives are likely to lead to substantial changes in portfolios. Pension funds will find equity relatively less attractive, and will prefer other assets – particularly interest bearing securities and foreign equity – and may also be prompted to consider more direct property investment.’
This was ignored by Brown. Those funds were then channelled into fuelling an unsustainable property bubble, {BTL portfolios,} which developed because of Labours complete lack of regulation of the Banks.This was followed by rising house prices, ever increasing toxic mortgage debt, and this was followed by the bank bailouts.
Roughly 60% of houses historically acquired by First Time Buyers, were then acquired by the Buy To Let brigade. This figure rose year on year, from 1998-2003.
FTBers were priced out completely.

This is just one example of Gordon Browns incompetent decision making which helped to create the cornerstone of the debt bubble.

5.Brown had every opportunity to face the problem. Instead in 2003 Brown switched the housing inflation figures from RPI to CPI, hiding the debt. [Much the Same thing he did with PFI.]

THESE are the reasons house prices rose to astronomical unsustainable levels.

Without the bank bailouts, house prices would have crashed by 60% plus.
So the only reason they have not crashed is because of Government theft of our taxes and QE.
So the theft of our taxes, and the devaluation of the pound in our pockets, via QE, to pay for this toxic mortgage debt, Is In effect, forcing us to pay for others houses, whilst keeping house prices massively overinflated, ensuring we can never afford our own house.

Working for nothing. No capital.

Its soul destroying. [How many who own houses, could afford their houses if they had to buy them right now?]

The Labour Party are incompetent economic Fascists.
The Labour party have implemented policies which support one section of a society, to the extreme detriment of another section of that society [via blatant theft and cronyism]
Obviously not a ‘socialist’ or ‘democratic’ act.
You think the cuts and the pain are just arriving now. Try working for nothing, for over a decade, and being utterly ignored. [Every Email sent to Labour was ignored, over 8 years, until it transpired that my local Labour MP, had made over £200k flipping houses in a secret expenses system.]

In 2009 When the Telegraph first broke the expenses scandal.
Gordon Brown and LABOUR forced a three line whip, to try to exempt MP’s second home expenses from the Freedom Of Information act.
From being made public. [Both the Tories and Lib dems voted in favour of MP’s expenses for second homes being made public.]
Sir Ian Kennedy, chairman of the new Independent Parliamentary Standards Authority (Ipsa) ruled that Ministers should repay profits on their second homes.
However, that only applies to gains from November 2009!
So profits from massive House Price Increases UP TO November 2009, were locked in.

HPI was all cream for our elected officials.
[Profits from second homes needed to be backdated to 1997, or the beginning of an MP’s tenure.]
The truth is that there was never any political will to enable the average person earning average wage to be able to afford an average house in a rising unregulated market, under a secret expenses system, where MP’s were all flipping houses, making hundreds of thousands in personal profits.
Not one MP represented the average wage earner.
It is not just that they used our money to profit, and paid no tax on the gains, it is also that it created a dangerous conflict of interest that meant that voting for policies which fed the house price bubble, for so many years, such as keeping IR too low for too long, CGT etc, also generated personal profits for them, in secret.
In any other profession this would be a criminal offence. It is market manipulation. Far worse than insider trading.
And now we see nothing has changed. [Whilst MP’s are allowed to profit in this fashion, we will never see a tax on BTL. We will never see affordable housing]
Words Fail me. I honestly believe if MPs had not been making personal profits on first, second, even third homes for all those years, in secret, then rising house prices, the tripartite system, would have been examined a lot more closely. Probably ten years ago.
Proudhon criticized big capitalist property from the petty-bourgeois position and dreamed of perpetuating small private ownership…….
[Everything New Labour DIDNT do]
“We do not hesitate to assert that there is no more terrible mockery of the whole culture of our lauded century than the fact that in the big cities more and more of the population have no place that they can call their own. The real key point of moral and family existence, hearth and home, is being swept away”
The most notable characteristic of a FASCIST ideology is the separation and persecution or denial of equality to a specific segment of the population.
The preferred class lives in relative comfort, while the oppressed class lives in a Fascist state.
Labour’s Fascist State.
Millions of us have already worked for over a decade for nothing. No capital. Unable to get ahead in life. Forced to waste tens upon tesn of thousands of pounds in rent. And we are so beyond sick of this, it beggars belief.
Its theft. Plain and simple.
You know what? We are past caring.
I want to know whether to take to the streets ‘Greek style’ for the next few years, or continue to try to be a productive hardworking taxpaying member of society?
Its your decision. We voted for fairness, after 13 years of having those evil b****** in government.

All we ever wanted was a decent job and a small house. Which we could work for and pay for.
Stop this blatant theft. Bring house prices back down.
What good has it done?
The gap between rich and poor has never been greater. And it has been created by Labour and the banks, who have gotten away with the biggest fraud in history.
If you have kids they will rent forever. Until you die and pass them your house. If you trade up or down, it will cost you more in exchange taxes, stamp duty. High house prices are good for no-one except the parasites in our society.

I am not working for nothing. No capital, for another decade. I’m just not doing it.

We want fairness. A chance to work for something we can call our own.

If Labour had not purposefully manipulated house prices to rise, placing millions of us in debt slavery, we would have likely got onto the ladder over a decade ago, and paid off most of our mortgage.

Stop this Blatant Theft.
Tax on BTL?
Introduce a Land Levy Tax?
Increase CGT on second properties?
Build more social housing?
etc etc


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