Property Inflation.

[Atheist]

Why is property inflation, especially housing property, considered a good thing? It's terrible for young people hoping to buy their first home, especially when so-called social or affordable housing is under attack from a government wanting to oblige local auhorities to sell off property below the market price.

[jno]

it all depends who you are. If you own property its "value" increases without your having to do anything about it. If you don't and would like to, it's a nightmare.

It dates back, as you suggest, to Thatcher forcing councils to sell homes cheap to tenants, without making any provision for replacing them, disrupting what had been a comparatively stable housing market - it's never recovered.

Her "big bang" to ease City regulations and allow banks and building societies more freedom also didn't help: it led to the property crash of 2008 as mortgagors were selling financial instruments so complex that even their bosses had no idea of their implications.

[Ryzen]

jno....council house sales were a Labour idea..well before Thatcher.

[davebro]

who said it's a good thing? - link

[Atheist]

jno; "If you own property its "value" increases without your having to do anything about it."
Yes it does, and it gives the lucky house-owners something to give them a glow when they chat over the after eights. But it only really turns into money when they are old enough to downsize, and but something smaller and cheaper. Or when they decide to move to a cheaper area, or perhaps abroad so that they can retire in the sun (not so easy now, after Brexit).

[jno]

Ryzen, yes, though funnily enough I haven't heard anyone praise Thatcher for using socialist plans to give away other people's property. But Labour didn't introduce the "right to buy", Thatcher did.

[dave50]

Surely there must come a point when the first time buyers can no longer afford to buy, they can't rise indefinitely.

[youngmafbog]

//or perhaps abroad so that they can retire in the sun (not so easy now, after Brexit).//

Oh give it a rest. You can go if you really want to, just like you could prior to the emergence of the EU.

[youngmafbog]

To answer your OP.

I have never understood why normal home owners would want property inflation - apart from bragging rights.

In fact home owner inflation only ever suits the government, since they get increasing amounts of Stamp Duty on every move and the value of the property when you die pushes you over the threshold of IHT.

[jno]

dave50, the Bank of Mum and Dad is stepping in to help their children buy. Those whose parents can't afford it are out of luck, but the poor you will always have with you (Matthew 26:11).

[youngmafbog]

Oh, and I forgot. It gives the Government something to grab to pay for you care if you are unfortunate enough to require it in old age.

[New Judge]

As I said in another thread, there is no reason why the taxpayer should provide subsidised housing for people. They should either buy a property or rent one at the market rate. The idea of "right to buy" was to decrease, or preferably bring to an end, the state's involvement in providing housing. There was no point in selling council properties if the funds raised were used simply to build more to let at subsidised rates. Might just as well have left the original tenants in situ paying their subsidised rents.

The overarching problem in the UK is not that there are too few houses. It's that there is an over-abundance of people.

[davebro]

Loads of houses being built around here - dunno where they find the buyers though - cheapest is probably £200K+ and there aren't many of those.

[davebro]

Late 80s the bubble burst (a bit) and people who'd just bought were left in negative equity for a while.

[Peter Pedant]

// mortgagors were selling financial instruments so complex that even their bosses had no idea of their implications.//

yeah day did - it was just wrong. Bit like Boris - he didnt break the law when he did. CDS - credit default swaps they thought would insure against loss - - it didnt.

I said to my nephew - if I were like that on my capital base, I would have mortgages(s) of £50m. one default and it all crashes down.
and he said: you dont understand CDSs

[naomi24]

// it gives the lucky house-owners //

I don't know many who acquired their property through 'luck'. Getting on the property ladder has never been easy for young people. Most have what they have through damned hard work and a lot of scrimping and going without. No 'luck' involved.

[Peter Pedant]

You have never understand this ( YMF)
increasing amounts of Stamp Duty ....
no yo dont understand this.... but hey this is AB !

increasing amounts of Stamp Duty ----- is called Fiscal Drag and this is NOT a govt aim. IN the Good Old Days of high inflation, dystbin men were on £1000 a year ( wow!) and so were in the high tax bracket. Govt said correctly, that this was never their desired outcome

just saying
god there is a flood of crap on AB this morning, and shouter has nt started shouting yet

[Peter Pedant]

// damned hard work and a lot of scrimping and going without. No 'luck' involved.//
bollooo isnt it? Like Trump got there all by himself,
and not because of the £100m step up primer from daddy Trump

Read AB and yoyr eyes balls turn towards the ceiling

[Atheist]

Naomi; I'm asfraid that scrimping and working hard is often insufficient nowadays. We scrimped and worked hard, but we were also lucky to get a house for under 10k. After that we were lucky to get some parent assistance, and we were lucky that prices weren't rising quite so badly in those days. The whole idea of a 'property ladder' I find rather strange, but at least it doesn't reallly need high inflation to make it work.

[naomi24]

//I'm asfraid that scrimping and working hard is often insufficient nowadays. //

No - it isn't. Often an unattractive proposition - but not insufficient.

[Atheist]

Naomi; I think you're a bit out of touch. My son and daughter- in-law were both working but couldn't afford to buy even a small flat. Their work was definitely insufficient. We gave them money to help buy a flat. Prior to that we gave our daughter money to buy a house; she and her husband were both working but couldn't have bought without help from us and his mother.