-
If property prices all go up, it doesn’t make it easier to buy a new property because the next step up is more expensive as well
It does if your affordability constraint was LTV not mortgage x income multiple. At 95% LTV, a 10% rise in property prices increases your deposit 3x. This is how the "property ladder" really got going in the 80s. It also requires real wage growth and an increase in mortgage lending multiples versus incomes... not something we are experiencing today.
NickCJ-
It also requires real wage growth and an increase in mortgage lending multiples versus incomes... not something we are experiencing today.
I hate to say it, but this is what makes me so gloomy about the UK. We've had politicians entirely focussed on their own careers and future elections for so long, national policy has basically been reduced to vote winning cock waving.
Its not just the property market that is broken as you say. Its wages, healthcare, taxation, childcare, eldercare, infrastructure, utilities, the environment. Everything is fucked. And the political climate doesn't allow long term solutions.
-
Yes I can see that - i thought i acknowledged this in mortgage availability / equity? I would just be surprised if that covers that many people, however. At recent prices income multiples must be a problem for most people (or the stats on incomes are wrong)
Stonehedge
andyfallsoff
This doesn’t make sense though. If property prices all go up, it doesn’t make it easier to buy a new property because the next step up is more expensive as well. It only benefits (1) mortgage availability, as you have more equity - that’s helpful but doesn’t help with prices going up; or (2) people who are trading down so the gains cover the new place.
I agree we need to attenuate price rises and have argued for CGT on houses myself, so not saying its an awful idea - but i think there are real issues which would need to be fixed, and it is hard to see if it really ends up in that different a place to where we are now given SDLT does a similar role economically.