Morning Line: Property bubbles are just stealing from the next generation

I feel more cheated by all the single mothers who take from the system without ever paying in or paying back. My taxes are used to pay for council houses - what a cheat!

The best outcome would be for the housing market to sustain a sharp correction with prices falling by at least 30% and more in some cases. This would make housing more affordable and enable people to buy and stimulate the market generally. It would create some short term pain but it would be better to do this quickly rather than see the matter prolonged.

Governments can interfere with the market and attempt to sustain prices but they cannot in the end buck the market and when the correction finally arrives it will all the more painful.

Unfortunately, goverments think only in the short term and act in their best interests rather than in those of the country and we are unlikely to see any change in sentiment at the present time. It should also be remembered that governments can only do so much and the price of housing depends on the amount of capital in circulation and the state of the economy.

There is unlikely to be excess cash in the UK for some time and with spending cuts and rising unemployment just around the corner we can expect to house prices coming down despite what the government attempts to do.

Consider the analogy:

The addict is the consumer - looking to get on the "housing ladder"

The drug dealer are the banks

One view is that you must have willing addicts in order for drug dealers to be able to exist.

The public are addicted to home ownership and will take as much debt (drugs) to finance the great british/american/australian dream as the banks will lend them.

Even if you don't believe this, there is no hiding from the fact that house prices are not set by the market, but by banks and their lending policies. They are cheered and incentivised by governments who have a clear and vested interest in seeing housing prices rising and property market activity flourishing. (For them, house price deflation would be a fate worse than death!).

It's not allowed to happen, so let's not kid ourselves that it ever will.

Consider the analogy:

The addict is the consumer - looking to get on the "housing ladder"

The drug dealer are the banks

One view is that you must have willing addicts in order for drug dealers to be able to exist.

The public are addicted to home ownership and will take as much debt (drugs) to finance the great british/american/australian dream as the banks will lend them.

Even if you don't believe this, there is no hiding from the fact that house prices are not set by the market, but by banks and their lending policies. They are cheered on and further incentivised by governments who have a clear and vested interest in seeing housing prices rising and property market activity flourishing. (For them, house price deflation would be a fate worse than death!).

It's not allowed to happen, so let's not kid ourselves that it ever will.

Considering there is no way that the 3 million homes new homes required by 2020 will happen unless planning is relaxed and investment made, house prices won't be coming down to affordable levels any time soon.

"I feel more cheated by all the single mothers"

That comment falls into the same trap as politicians and some of the media does.

The term should be 'single parents' - what about the fathers?

The fathers never receive adverse commentry in the media

If selling prices fall by 30% then in most parts of the country there will simply be no building. Buildings costs have risen considerably in recent years and apart from that no one is going to give away land for building. It is not the high prices that caused the crash but the ludicrous misuse of the various derivatives leading to the collapse of the banks and the subsequent unavailability of mortgages. My own experience of selling a house eighteen months ago was that there were no shortage of potential buyers but only an absence of funds to allow them to proceed.

House prices are already coming down in many area, check out Right Move with Property Bee, many reductions showing now, that is a fact, not an opinion by a vested interest. The next three months will be interesting I think.

The reason why the Land Registry figures show a small increase can be put down to London figures, many properties in London are being bought up by foreign buyers, the weak pound has made them a good buy for foreign investors. All housing bubbles deflate in the end, this one will be no different.

What all articles on this matter seem to ignoreis that these surveys proudly announcing house prices are rising are based on sales volumes that remain less than half what they were pre-2008.

This is not down to lack of finance or product, this reflects that a large proportion of the population are sitting the market out.

And why are they doing this? Because if they don't have to move they would rather not take the risk.

Ive looked at cashing my housing equity several times, but renting in the UK is fraught with difficulties.; not least the 6 mnoth lease (amazing idea when you consider the costs of moving and settling in any house). Other countries provide at least some continuity of tenure with sensible 3 year renewable leases. This problem is now compounded in Uk by amateur landlords after a fast buck on mostly borrowed money, moving in and out of the market with unrealistic expectations of rent and capital gain. No wonder young people are keen to buy.

I rented in another city for a year for work and within three months of moving in, was told the house was being put up for sale and would I like to buy it? Lucky for me I managed to hang on till a buyer was found which took a few months; but it was not a pleasant expereince and I had my own home to return to.

So until the letting market is properly sorted out and policed the only security of tenure is provided by a large mortgage.

1. The amount of money people can borrow from banks.

2. The monthly repayment amount.

Houses are massively overpriced and the government can't let prices fall because as soon as they fall and people get in negative equity they will post their keys though the building societies door and declare themselves bankrupt. Then the banks and in turn the country will be in big financial trouble again. So expect to see low interest rates and government intervention in repossessions for some time yet.

Buy to let landlords have a big bullet to bite in this issue. Young people could not compete with their easily arranged loans and compliant estate agents and solicitors. CGT should be adjusted to allow for only one extra home, for those lucky enough to afford it, and to let youngsters get themselves a two bedroom flat at last.

The escalation in housing costs commenced some 40 years ago wiht the selling of Council houses.

They were sold at way below the real value. A large proportion of buyers when they were able,then sold their bargin at much closer th the true market value,which enabled them to move from the Council estate to a private area,and buy a property at the now increased price and the spiral was on the move.

To make matters worse, Councils were unable to housing aveilable to rent, owing to the small amount they received from the sales they were forced to make.

Now those of us with memories know who to thank for that.

New properties in the midlands are being sold for less than the build costs. As Colin said material costs have risen, in some instances doubled. Anyone waiting for further reductions are going to be disappointed.

Once the current stock of new build as gone no one in their right mind will start new build until they can see a reasonable return.

Cheap and easy credit has also been responsible for keeping wages low in the UK as people have lived way beyond their means on credit rather than demanding real world pay rises.

This combined with the Govt using CPI instead of RPI not factoring in real living costs like housing has been a recipe for disaster.

Nevermind, lets prolong the agony for the young and those that missed the boat and lets keep those hard working 'entrepreneurs' in riches by lowering the Capital Gains Taxes on their second, third and fourth properties and target the poor and all of the poorly paid Public Sector instead!

There is council financed rental and housing benefit schmes which is also responsible for such upward spirale

Social housing costs taxpayer 2oobn p.a.

The real thieves are the buy-to-let parasites who are denying an entire generation the prospect of home ownership. These urchins should be ashamed of their actions.

A 95% tax on CGT and rental income on buy-to-let and second home ownership should be brought in by the government.

The powers that be are desperate to reflate the housing market as that is where a large chunk of the money supply comes from - people taking out debt as mortgages; exponential growth of money supply must be assured. People need to realise that the entire financial system is a Ponzi scheme. A Ponzi scheme relies on exponential growth in the number of individuals willing to invest, as the returns to previous investors are paid with the subscriptions from new investors.

Ponzi schemes always collapse as exponential growth in any real physical system can't be sustained for long - do the maths.

In the same way, a financial system where virtually all money comes into existence as debt suffers the same problem. All loans (i.e. debt) incur a percentage interest charge, thus more money must come into existence (as debt) in order to service the loan. Thus the money supply has to grow at a percentage rate in order for loans not to go sour. Such growth is exponential. Have you ever wondered why politicians always bang on about % growth of the economy? At some point there aren't enough borrowers to keep the money supply growing and the whole thing starts to collapse. The only way to perpetuate such a system and prevent collapse is by continually destroying the value of money through inflation. Have you every wondered why the BoE deliberately targets inflation, i.e. the destruction of the value of money?

Back to the main point, individuals are saturated with debt but still the money supply must be kept growing to avoid a deflationary collapse, so let's nail interest rates to the floor to try and get more borrowers sucked in. Not enough borrowers? - let's have some QE to make up the shortfall. When this lot of stimulus fails to keep the money supply growing we'll have more printing of money until we are in an inflationary holocaust - which is exactly what the powers that be are aiming for - a lot of inflation to destroy the nominal size of debts.

The Government should make them sell to their tenants as a knock down price, the same way that they made Councils.