Copy of Lib Dem coalition agreement with Tories

[Magpie]

I am well aware how the public finances work thank you. Even if you adjust for a recession the structural deficit still acounts around of half of government borrowing - given that government spending as a % of GDP is amongst the highest in Europe then priority should be on spending cuts rather than tax rises - although clearly a mixture of both will be required.

[Huguenot]

Excellent, I don't think the coalition talked about more spending in any area, just spending cuts and tax rises.

Can I ask you to clarify another one too: "people who already pay the majority of tax object to further tax increases when it is used to pay for, as an example, monitoring of people who are security risks to this country but can't be deported due to the human rights act."

I can't quite work out what you're saying here - are you suggesting that we stop monitoring security risks, or that we should throw out Human /Rights laws? Are you saying we save money by deporting possibly innocent people we suspect (perhaps through little more than paranoia) of being a security risk with no evidence, to countries where they might suffer torture or death?

That would seem like a kind of a De Menezes approach, where we save money by shooting electricians first and asking questions later.

[DJKillaQueen]

Well I hate to say it but I find myself agreeing with Huguenot. We can't have a society where the poor and low waged are left to rot while the affluent enjoy comparative tax breaks and other top ups they don't really need (child tax credits being one). It's immoral if nothing else imo.

And reading back I totally agree that the buy-to-let sector has been a disaster for the housing market. We really are going back to a time where only the few will own property. People on salaries that would very comfortably have been able to afford a house 30 years ago are now struggling. All political parties and the banks have been complicit in allowing the crazy over inflated market to get there in the first place. They've let it run out of control to the detriment of the economy and the millions of people that see more than half their salaries swallowed up on rents (going to pay someone else's mortgage). Worse still - if they can't pay it all from thier own salary, it is topped up by Housing Benefit, so that tax payers money is in effect paying the landlord's mortgage. At the same time, many have got burnt investing in 'get rich quick' buy-to-let schemes after investing life savings into private developments that were overpriced.

No politician will dare tackle the issue and say what many of us are thinking - it has to stop.

As for the coalition, I'm curious to see just how it will pan out. One would hope that the extremes of each party would be levelled out by the other and we'll get a more centre ground of policy, which will probably be no bad thing. But I sense the road ahead will have as many rocks as there are potholes in Rye Lane. Things are going to get very tough for a lot of people.

[Magpie]

Tinkering with Capital Gains tax will not in any way prevent further booms developing - the housing boom was a consequence of low interest rates leading to affordability of monthly interest payments being the benchmark for borrowing/lending rather than salary multiples.

Its clear that taxes will need rise, my point is that the 36% of people who voted tory reckon that the priority should be spending cuts, not tax increases - this does not make them evil as Brendan seems to think.

Huguenot, you know well what I'm referring to, and actually I would be quite happy for the EHR Act to be torn up, or at least rewritten to suit English Common Law. My understanding is that it was written to align with French Style law which focuses on loosely defined principles open for interpretation as opposed to English Common Law which gives clear guidence. Hence it should be re-written to ensure that common sense would prevail in cases such as this one. The other 8 or so students went home quite happily - but on the word of the two suspects that they may face tortue on their return home they can't be deported - lets forget the human rights of the remaining population not to a) be at risk of terrorism or b) pay for the indefinate monitoring.

[DJKillaQueen]

the housing boom was a consequence of low interest rates leading to affordability of monthly interest payments being the benchmark for borrowing/lending rather than salary multiples.

That's only part of the story. The rules chnaged too. It used to be that if you had a mortgage you couldn't rent out a room in your home for example. We've gone full circle from that to buy-to-let. Other rules were done away with gradually until we ended up with the ludicrous self certified mortgages. All of these gradual changes were designed to keep people buying houses as the supply of buyers began to tail off until untimately the only people left to sell houses to, were those who couldn't really afford them...enter the sub-prime market. Now we have the equally lunatic development of part buy part rent......

It's lunacy.

When my father bought a modest terraced house in the early 80's, he was able to get a mortagage and afford it on a humble bus drivers salary. Now two people working full time can't afford to buy first time without parental help. The average age for first time buyers without parental help is 42!

[Brendan]

And people actually think that it?s fine to buy a second house which would have been on the market accessible to first time buyers and then rent it out to one of those very families denying them a home of their own.

People who do this are either so entirely concerned with themselves that they are unaware of the social and moral implications of what they are doing (which is forgivable on some levels I suppose) or they are just wilfully self-serving sub-human filth.

[Marmora Man]

And people actually think that it?s fine to buy a second house which would have been on the market accessible to first time buyers and then rent it out to one of those very families denying them a home of their own.

People who do this are either so entirely concerned with themselves that they are unaware of the social and moral implications of what they are doing (which is forgivable on some levels I suppose) or they are just wilfully self-serving sub-human filth.

What a strange stance. Renting and buying are very different life choices. Not everyone wants to buy a house / flat, many wish to rent:

a. While they decide if they like the area

b. To see if they can find a job

c. While they look for a house

d. While they save up for a house

e. Because they cannot afford to commit themselves to the long term financial implications

f. Because they just like to be flexible

If everyone owned a house options to move around the country freely would be restricted. If the state provided all rented property it would be bureaucratic, costly, normally poorly maintained, take twice as long to move in / out.

A privately provided rental sector is an essential element of our mobile society - it's not immoral, illegal or socially unwelcome, quite the reverse in fact.

[DJKillaQueen]

It's a culture of it's own though isn't it Brendan. Housing is no longer a 'home' but a whole industry of investment, like the stock market - in fact houses have become just like stocks and shares. No other market has seen the level of profit the housing market has seen in the last 30 years. The imorality of it being as you rightly say the profiteering from something that is an essential need for all people - a roof over your head.

We've gone back to a time where too many familes are crammed into tiny flats, while the few enjoy more space and property than they can ever need. Also our cities are full to the seams as local people growing up in rural areas have been forced into cities because they can't afford rural prices. It's a social displacement that is detrimental to this country.

The irony is that in Thatchers aim to make everyone home owners, all that has happened is that a few have made massive profits while over one million people sit on council waiting lists, thousands of families live in cramped unsuitable accomodation, the low waged need tax payers money to top up their rent payments to their buy-to-let landlords. Yes indeed tax payers money is paying the mortgage of some investors.

I have no problem with anyone making money, but in no other essential area have the rules been changed so much to keep prices rising (and way above salaries). We already have the smallest new build rooms in Europe, a desperate shortage of affordable family homes - what next? Buy a room, rent out the rest?

It is a political hot potato because so many people are part of the home ownership wheel but if governments or the market don't sensibly rectify things then there will be no-one left who can afford to rent or buy in the private sector and in this country the consequences of that will be far worse than the sub prime banking collapse.

My suggestion would be to find a way of slowing the market down without risking the livelihoods and homes of those invested in it. It can be done but it means going back to some form of regulation (we already have fair rent committees anyway). We need to develop other investments instead of using something as essential as housing. The gravy train has to stop.

[Brendan]

Marmora Man Wrote:

-------------------------------------------------------

> And people actually think that it?s fine to buy a

> second house which would have been on the market

> accessible to first time buyers and then rent it

> out to one of those very families denying them a

> home of their own.

>

> People who do this are either so entirely

> concerned with themselves that they are unaware of

> the social and moral implications of what they are

> doing (which is forgivable on some levels I

> suppose) or they are just wilfully self-serving

> sub-human filth.

>

> What a strange stance. Renting and buying are very

> different life choices. Not everyone wants to buy

> a house / flat, many wish to rent:

There is always the need for some private rental in the market for those reasons but not as a primary provision for people?s homes which is exactly what has been happening in the uk for the last few years. Perhaps you are unaware or unaffected by this. Buy to let landlords can almost always outbid first time buyers on the type of properties in the market that should be going to young families. So we have a situation where a young family has to either earn over ?100K a year and/or have parents who can just give them ?50K + just in order to have their own house.

Otherwise they are forced to rent have no control over their tenure and spend most of their income lining someone else?s pocket.

Like I said people who choose to become buy to let landlords either don?t fully realise the implications of what they are doing or they do and they choose to do it anyway, in which case my last hypothesis applies.

[Brendan]

And believe me it is not welcome.

-It is not welcome when your wife is 6 months pregnant and your landlord decides to kick you out of your house with 2 months notice (which is his god given legal right) because the market is right for him to sell.

-Or I?m sure the couple who lived 2 houses down from me weren?t very happy when they were forced to move out with a 1 year old baby for the same reasons.

-It is not welcome when you work all the hours god sends and half of what you earn goes into some bastards pocket instead of into your own investment.

-It is not welcome to the millions of people in these and similar situation.

-It is not welcome when you walk down a road and all the houses look like shit because the residents have no incentive to maintain them because they are all rented.

And there are many many more reason.

Yes there will always be a need for some rental properties but people buying second homes for profit should never get first dibs over people who need a first home for their family.

[DJKillaQueen]

I agree with you both.

Buy-to-let 'Investors' or otherwise naturally don't consider anything beyond their own profit. They don't see a 'home' when they look at a house, they see an income, a way to make money/ a pension etc. And as far as 'investment' goes there's nothing wrong with that. However there is something very wrong with something as necessary as housing being a source of secondary investment and the profiteers gravy train that it is. Housing should never have been allowed to become the get rich quick scheme that it was in the 80's and 90's.

France for example regulates it's housing market, it sets rents locally and protects tenants rights. We need to do that here and fast otherwise like I said before, within 30 years there'll be no-one left who can afford to buy or rent.

[MitchK]

DJKillaQueen Wrote:

-------------------------------------------------------

> We need to do that here and fast otherwise like I

> said before, within 30 years there'll be no-one

> left who can afford to buy or rent.

Er, if that were the case, property prices would come down. The law of supply and demand.

[DJKillaQueen]

They would be forced to yes but in a way that will put too many home owners and investors into negative equity - that's why new products emerge and rules keep changing to prevent the market from falling - my point is that eventually we will get to the place where new products and rules won't help anymore and a lot of investors are going to be in serious trouble.

To pretend there's nothing wrong is asking for the innevitable. The free market isn't always the best option.

[Jeremy]

It is quite amazing that people would object to capital gains tax on property, when speculation has driven up prices to the point when the average house costs 10 times the average salary.

However, private landlords are not quite the scum-bags we're making them out to be, they do provide a necessary service and it seems fair that they get a modest month-by-month profit in return.

[Brendan]

Balls. Someone who willfully uses the market situation and their superior bargaining power to take a property off the market which should have gone to a young family and then profits from renting it back to one of those families further denying them control of their own lives either doesn?t quite realise the implications of what they are doing or they do and don?t have an issue with it. If the latter is true they are the type of scumbag I make out to be and then some.

[MitchK]

If someone wants control over their life, they shouldn't rent. And if they can't afford to buy where they live, they should move.

[Brendan]

Oh it?s that easy is it. Cheers for clearing that up for me. It?s good to get input from people who are so amazing in touch with what is really going on out there.

[Loz]

Sorry Brendon, I don't see this. The maths don't add up.

A landlord would want to see a return of at least 7% on their investment. A standard buyer ('young family; in your rather loaded language) does not. So a landlord must charge a rent of mortgage + costs (repairs, insurance + other required checks and works) + cover any unrented months + 7%. Or take a punt on rising prices giving a similar paper profit (which does attract CGT).

The buyer ('young family') need to cover their mortgage.

Where is this superior bargaining position? If I can't outbid a buy-to-let buyer on a house, then I can't afford their rent either.

[Jeremy]

Brendan, I think you're making a fundemental error by assuming that everybody wants to own their property. Renting actually suits some people's lifestyles much better.

Yes it's a big problem that housing is so expensive, but even 10-15 years ago when property was much more affordable, there was still a strong rental market. It wasn't created by property investors.

[Brendan]

Some people Jeremy, there is always a need for some rental properties but there are over 3 million properties let in this country and most of those to people who would rather own but have been priced out of the market. It is a significant issue that people have been going on a bout for years. And there are plenty of figures to back it up other than just the blatant evidence you get if you open you eyes and look around you.

[Jeremy]

Loz - I think Brendan's "superior bargaining position" comes from the assumption that the investor is likely to be cash rich. Buy-to-let doesn't really add up unless you have a large deposit.

[Loz]

Jeremy - It still does not add up, even if you take mortgage costs out as you still need to make a return, else you may as well just stick the cash in the bank and get 3%/4% interest. If I can't afford the mortgage, I definitely can't afford the rent.

Besides, is it really the case that BTL investors are driving the market up and/or snapping up every home on the market? What percentage of buyers are BTL?

[Brendan]

A 30K deposit and almost 80K a year in income is not enough to get you a 2 bedroom home in this market and we?re lucky to earn and have what we do. Most people have much less, how they can ever be expected to afford their own homes is beyond me.

My wife?s business partner (who has less actual income) was able in the same market to buy a second house backed up by the 20 years worth of equity in her house and that there will be rental income to cover the mortgage.

I remember reading somewhere last year that more buy-to-let mortgages were being approved than first time buyer ones. Will try to dig it out.

[MitchK]

Well you could ban foreign ownership of properties if you want. That would probably wipe off 30% on London prices at a stroke. If you have an uncontrolled immigration policy, and Labour did, then there will be excess demand for property.

You lefties didn't want to discuss or control immigration, you don't want to build on green sites because of the damage to the environment and then complain that property prices go up. So you blame the rich and say is their fault.

Houses in East Dulwich are not expensive in my view. Far from it, if you compare to other parts of London.

[Loz]

A 30K deposit and almost 80K a year in income is not enough to get you a 2 bedroom home in this market

You what? 80K a year in income will get you a ?280K mortgage plus your ?30K gives you ?310K to spend. Had a quick look on Rightmove and there are 150 properties within your price band in SE22 alone. And that includes some three bed ones. Go further out of London and you will find even more in your price bracket.