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House price rises 'must stop' - Vince Cable
http://www.x404.co.uk/forum/viewtopic.php?f=19&t=20953		 Page 1 of 1
Author:  pcernie [ Sat Jan 04, 2014 4:11 pm ]
Post subject:  House price rises 'must stop' - Vince Cable
http://www.telegraph.co.uk/finance/pers ... -stop.html
Author:  MrStevenRogers [ Sat Jan 04, 2014 4:29 pm ]
Post subject:  Re: House price rises 'must stop' - Vince Cable
has Vince cable every read the story of King Canut ...
Author:  Amnesia10 [ Sat Jan 04, 2014 5:41 pm ]
Post subject:  Re: House price rises 'must stop' - Vince Cable
There are plenty of ways to deflate such bubbles. Limit the maximum multiple of loan to income. Limit the maximum loan to value, to say 80% and less for buy to let landlords. That way they cannot price out first time buyers. It would also reduce risks of repossession considerably. Ban interest only mortgages and make all mortgages repayment type. You could also ban banks from making mortgage loans and leave it solely to building societies who can only finance mortgages from savings. Banks had access to the wholesale interbank market and could flood the mortgage market with money which would inevitably lead to a bubble. By divorcing building societies from the money markets it would mean interest rates would never get too low and as they rose they would choke off speculative demand.

Finally make all homes subject to capital gains tax. Though until a government has the balls to make stable house prices a policy we will get loads of people who think that they are great property investors who simply rode a tidal wave of liquidity.
Author:  l3v1ck [ Sat Jan 04, 2014 7:20 pm ]
Post subject:  Re: House price rises 'must stop' - Vince Cable
Amnesia10 wrote:
Ban interest only mortgages and make all mortgages repayment type.
I've never understood why people were allowed to take those out. Obviously banks like it as people could pay them interest for decades longer than normal.
If you limited the maximum multiple of loan to income now, that could cripple first time buyers who've just taken out a mortgage. They'd be screwed when trying to search for a better deal in a couple of years as they may not get a new one approved. Okay, they could carry on with the existing one, but that usually means poorer rates.
Personally I think there should be a minimum deposit required by law to guard against equity loss. Whether that be 5 or 10% or something else? I'll let the philosophers out there decide.
Author:  belchingmatt [ Sat Jan 04, 2014 7:31 pm ]
Post subject:  Re: House price rises 'must stop' - Vince Cable
Amnesia10 wrote:
Finally make all homes subject to capital gains tax.


I would be more in favour of massively penalising second home and buy to let owners than the majority who only have one residence.
Author:  MrStevenRogers [ Sat Jan 04, 2014 7:35 pm ]
Post subject:  Re: House price rises 'must stop' - Vince Cable
belchingmatt wrote:
Amnesia10 wrote:
Finally make all homes subject to capital gains tax.


I would be more in favour of massively penalising second home and buy to let owners than the majority who only have one residence.


+1 to that ...
Author:  l3v1ck [ Sat Jan 04, 2014 8:12 pm ]
Post subject:  Re: House price rises 'must stop' - Vince Cable
Amnesia10 wrote:
Finally make all homes subject to capital gains tax.

A terrible idea. People would never move as they'd lose massively each time they did.
Author:  l3v1ck [ Sat Jan 04, 2014 8:13 pm ]
Post subject:  Re: House price rises 'must stop' - Vince Cable
MrStevenRogers wrote:
belchingmatt wrote:
I would be more in favour of massively penalising second home ...

+1 to that ...

+2
Author:  Amnesia10 [ Sat Jan 04, 2014 8:18 pm ]
Post subject:  Re: House price rises 'must stop' - Vince Cable
l3v1ck wrote:
Amnesia10 wrote:
Finally make all homes subject to capital gains tax.

A terrible idea. People would never move as they'd lose massively each time they did.

Not really. It is a tax on the capital gain. If you made no gain you pay nothing! It would highlight all the real costs of home selling such as the legal fees and the estate agent fees.
Author:  Amnesia10 [ Sat Jan 04, 2014 8:20 pm ]
Post subject:  Re: House price rises 'must stop' - Vince Cable
belchingmatt wrote:
Amnesia10 wrote:
Finally make all homes subject to capital gains tax.


I would be more in favour of massively penalising second home and buy to let owners than the majority who only have one residence.

There are loads of cheats to get around that. Look how many MP's re-designated their second home as their main residence when they sold it. Pocketing a massive tax free gain all at the tax payers expense. Hitting all properties will catch those with multiple homes.
Author:  l3v1ck [ Sat Jan 04, 2014 10:34 pm ]
Post subject:  Re: House price rises 'must stop' - Vince Cable
Amnesia10 wrote:
l3v1ck wrote:
Amnesia10 wrote:
Finally make all homes subject to capital gains tax.

A terrible idea. People would never move as they'd lose massively each time they did.

Not really. It is a tax on the capital gain. If you made no gain you pay nothing!

You buy a house for £100,000. Five years later you sell at £150,000 as you need to move for work. You buy another similar house for £150,000. Everything is equal. However if you paid capital gains on all house sales, you'd have to pay tax on that £50,000 increase. That's at least 18%, so at least £9,000 you have to save up just to pay the tax. Or go for a smaller £142,000 house. That hardly seems fair.
Author:  Amnesia10 [ Sun Jan 05, 2014 9:17 am ]
Post subject:  Re: House price rises 'must stop' - Vince Cable
l3v1ck wrote:
You buy a house for £100,000. Five years later you sell at £150,000 as you need to move for work. You buy another similar house for £150,000. Everything is equal. However if you paid capital gains on all house sales, you'd have to pay tax on that £50,000 increase. That's at least 18%, so at least £9,000 you have to save up just to pay the tax. Or go for a smaller £142,000 house. That hardly seems fair.

The point you are missing is that a gain like that would be much harder to achieve in a world with restrictions on mortgages. So assume that you sell for exactly the same price and can buy a house for the same price. You will have no gains at all but will still need to pay estate agents fees, stamp duty, legal fees, removal costs and VAT on each element regardless. Those could easily add up to another £9 000, costs which you have also failed to account for in your original calculation.

Housing is actually a depreciating asset that needs a constant inflow of new credit to actually make its price rise faster than wages. Prior to the housing credit bubble from the seventies on housing only really rose in line with wages for centuries.
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