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Archive for the tag “mortgages”

Open Letter to Older Voters

As an ‘older voter’ myself I feel qualified to write this open letter to my contemporaries many of whom, it seems, tend to become more right wing and vote Tory in elections. Why this should be is somewhat puzzling and the purpose of this missive.

Older people it is generally recognised tend to be more set in their ways but political leanings fly in the face of this generalisation. Could it be that as life expectancy diminishes resistance to change increases along with a desire for security as represented by continuity, money and assets? If so and I can think of no other reason, this is illusory.

People of my generation, those born in the 40’s 50’s and early 60’s were indeed very fortunate in that during their early and middle years they had security of housing, they bought houses or were more or less assured of a Council house for life. They had good ongoing health care from the newly formed NHS, good and free education up to and beyond a university degree and perhaps most importantly, employment was all but guaranteed as soon as ceasing formal education. For those who trod the craft or trade route apprenticeships were long, meaningful, detailed and effective training with a long experienced time served craftsman leading to a worthwhile and life long well paid career.

In the early 1980s under Tory Prime Minister Thatcher, the big con trick of the Right to Buy Scheme was started, not because she thought it would be ‘nice’ but because of the ideology that people with a mortgage are de facto in debt, heavily in debt and that means over a 25 plus year period they will be handing over a huge amount of their earnings to Tory friends, the bankers. In addition people whose home may be at risk if they fail to make the repayments become servile and compliant and unless pushed to the limit will not go on strike for better pay or conditions; in fact will even accept a cut in income without much dissent. As more and more of the social housing was sold off, much of it incidentally ending up in the hands of Tory landlords, an obvious shortage of homes was created leading to ever increasing house prices that is unabated to this day.

Much has been written about housing, including some of my blogs here, so I wont go deeper into it except that the dash for home ownership resulted in and was encouraged by not only the Tories but also the Blair government, a slight feeling of superiority by owners over renters. It was interesting at the time to see some of my friends who had voted Labour all their life until getting a mortgage, almost overnight becoming Tories. Little did they know that they would be working harder, longer, for less and that it would eventually require two of them to work to pay the one debt. Mortgages today can now stretch beyond a lifetime into the next generation; the transfer of wealth from ordinary people to the rich elite gathers pace.

No one likes to be proved wrong or admit to being duped and so it is natural for most to close their minds to even that possibility, to cling to that superior feeling that brings comfort which by default means a resistance to change. This is how older voters come to be more right wing and how they come to vote for a Tory government and their ‘austerity’ that only applies to the working and middle classes but not them.

Wait a minute though my older voting friends! Most of you will have children and grandchildren perhaps even great grandchildren, what of them? ¬†Perhaps you are thinking you can leave them your house albeit split between however many offspring you have, less tax and fees etc. so they’ll still need a mortgage and a big one with prices increasing way above inflation. The same people that made you pay roughly twice the sale price for your home will happily do the same for your descendants. These same people also want the destruction of our NHS for their profit, do you want your descendants to have to pay for private health care or go without and do you want them to be denied the education they would like on the grounds of cost? Of course you don’t but to ensure their safety you have to admit to yourself, no one else, that you were duped and make the changes necessary in the polling booth.

 

 

 

 

 

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WARNING UK

WARNING! Never mind that over a million people are on zero hours contracts so don’t show up as unemployed or that thousands have their benefit suspended for spurious reasons and they too don’t show as unemployed. The official unemployment figures now show 6.8% so remember, the Governor of The Bank of England said ‘when unemployment falls below 7% he will consider raising interest rates.

You should know by now, I’ve told you often enough, that those who are really in control want you in debt, lots of debt, so watch out as your mortgages will soon rise and your credit charges go up.

Who’s To Blame

The system under which we live, Capitalism, may not be at all desirable for many of us but it is the system at present and so there is no alternative but to deal with the problems as they arise. The Government has, I believe, acted responsibly and decisively over the past few weeks in dealing with this financial crisis and was faced with little room for manouver.

The bankers and dealers and short term profit makers have rightly come in for huge critisism and public condemnation. However, we should not apportion all the blame to them. People taking out mortgages bigger than they could realistically pay are to blame, people who self certified over inflated salary’s to get a mortgage are to blame, people who took out multiple credit cards and ran up debts they couldn’t in the end pay, are to blame, people using the expected future equity in their homes to buy another home to rent out, are to blame. Spending bonus’s on luxury items and exotic holidays instead of putting it by for the rainy day that just had to come sometime, are to blame.

In short, you, me and most of us, are to blame and we should remember that, not just now but in the future when this crisis is finally over.

Credit Crunch & Housing

Due to the shortage of finance within the banking and building society sector and the rising interest rates, the building of new homes is slowing dramatically. The big building companies such as Barrett and Bovis are cutting back on developments and even leaving the interior completion of homes until sales are agreed.

Many people will soon have their mortgage rates raised dramatically when their fixed term agreements come to an end. Coupled with the down-turn in the economy and the general feeling of financial unease it is inevitable that a lot of distressed home buyers will find their houses repossessed, a fact confirmed by the Bank of England yesterday. The plan and hope of the Government to build 3million new homes by 2020 begins to fade.

However, if the Government could but see it, this can be a moment of opportunity. Land is the biggest cost for homes but the Government holds an enormous amount, particularly the Ministry of Defence, that just lies unused. If they gave (yes, gave) some of this land, where appropriate, via local authorities, to build homes for rent and not for buying then several things would result. Firstly and most obvious, there would be more homes for people to live in rather than a make money investment and with more home buyers becoming dispossessed there will be an even greater need for rentable homes. It will keep the building industry in a healthy condition providing employment and training ready for the inevitable but eventual upturn. A huge amount of employment depends on new housing, not just the suppliers of building materials but furniture, white goods, carpeting, decorating products and so on. Another benefit is that a vibrant public rented sector would put the brakes on rampant house prices in the future making for a more stable market.

Yes the Government would have to give financial assistance to the local authorities but this would be a lot cheaper in the long run than coping with the costs of unemployment, family break-ups, paying for people in hostels, B & B’s etc. and in addition keep on target for 2020.

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