Posted by: John | January 2, 2009

Is it me or is it others?

The news today about house prices are damning.

I have no objections to affordable house prices – the real political point to be made is `what was the point of the high house prices when most of the gains will be wiped out by 2010?`

I’ve yet to hear from Vince Cable or anyone else in the Lib Dems what our long-term vision is of the economy.

Make no mistake it is the huge elephant in the room. Each Government or ideology (or has been seen the past ten years lack of ideology) creates a SYSTEM that you have to follow that ALLOWS behaviours or at least nudges them. Simply being negligent of the fact is no answer.

The system we’ve had for the past at least 6 or 7 years has been thus:

You only win if you

a) buy property and sit on the property and sell in 2006/7

b) buy buy to let and sell in 2006/7

c) borrow more than you earn and see if you can get bailed out by the taxpayer

The point I’m making is `what is OUR model` and how will we achieve this model?

In Sweden the following is true:

a) Don’t borrow more than you can pay back

b) Don’t rebel against the Social Democratic system

c) Pay back on time your loans or else

The thing is each model is a balance – either IN FAVOUR of spenders or borrowers or creating a balance for a cohesive society.

I can’t see how a system of over-borrowing and over-consumption CAN’T have sanctions against those that can’t pay back their money on time nor save for the future or have proper consumer credit controls with sanctions on the banks. I’m not saying now but as a long-term aim.

Is it too much to ask for an economy where there’s sufficient employment, affordable housing and enough for people to save? Isn’t that NORMAL! Or am I being completely thick?

The reason being is that having bought my little house in 2004 I now find I’m in negative equity. Yet was it my fault that my relationship broke down (with whom I’d been living elsewhere) at that time necessitating the need to buy my own home? Others must have been in the same position or became tired after years of waiting.

What I want to know is `how has the new Labour economic model (or lack of it which is just as damning) helped ordinary working people?`.

My answer that it hasn’t except for spivs and those without ethics who simply bought to let vast numbers of properties or just left them standing.

I say again that the Halifax figures out today are the most politically worrying thing for new labour since Iraq.


  1. > I’ve yet to hear from Vince Cable or anyone else in the Lib Dems what our long-term vision is of the economy.

    Many people suffering the effects of this housing downturn – you and me included. As you’ve said for many years we’ve had this crazy mindset that people spend as much as they can on their house thinking it’s a risk-free high-return asset that cannot possibly go wrong. People need to drop that mindset and politicians need to challenge it.

    As Vince said, for instance here , we need more focus on restraining asset price inflation so that it is sustainable rather than boom and bust.

  2. I bought a property in 1998, lived in it, and sold it in late 2005, because it was pretty clear to me prices would crash and I wasn’t going to risk another year. There seems to be a fairly predictable 18 year cycle in this, and the crash has arrived bang on time. Why is it that many people who were paid very large amounts of money to make business plans for the big banks couldn’t see what was obvious to me and many others?

    The whole situation is another “have to be cruel to be kind” one. We were told it was kind to be more generous in lending money to people for buying houses because this was “helping them get a foot on the ladder etc”. Actually, no, all it was doing was pumping up prices. Had the lenders been far more cruel in denying easy mortgages, prices wouldn’t have got pumped up and we wouldn’t be in this mess.

    It’s easy to say this NOW, but anyone who said it any time since, oh, the 1989-90 house price crash would be denounced as a cruel loony. There’s a whole load of other things we can say now about calming house price booms – tax on capital gains? – we can say now, we won’t be able to say them next time the boom comes.

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