Housing, it’s not all bad news.
House prices continue to fall in the UK with London showing it’s first fall in over eight years. Bad news if you’ve bought a house expecting it to increase in value, above the rate of inflation, indefinitely. If though, you bought a house to be your home to live in, which is what they are really for, what difference does it make? If you need to move then the cost of the house you wish to buy will also have gone down by approximately the same percentage rate as yours. If the current financial crisis continues and it looks set to do so for a year or two at least, then house prices may stabilise at a sensible and sustainable level. It’s not likely, unfortunately, that the current government will accept my suggestion and nationalise all land (see).
Perhaps and I won’t hold my breath, regulations will be brought in requiring a hefty deposit to be put down when buying a home and a limit on lending of say, three times annual income. In the case of a couple buying, based on the highest single earner only, thus removing the financial block on having babies. These regulations would have the added benefit of keeping prices on a more even keel.
The talks currently still under way in the USA, as to how to prop up the banks with how many $billions are going to do little for mortgaged to the hilt buyers in the US and in the wider world. ‘Trickle down’ has never worked as we all know too well after the Thatcher years. How about at least some of these now almost countless billions going to the mortgage payers who are in trouble, by way of installment interest relief. It would help them and help the wider economy and if the greedy bankers could possibly learn the lesson it would help to stabilise the banks as well.
Oh well, dream on.