Cursed greed of gold, what crimes thy tyrant power has caused.
Imagine if you will, the following conversation in, say, a hospital: “Doctor, doctor. The patient is recovering too quickly. We must do something about it. We should change his medication or give him fewer pills. We don’t want to nearly kill him (again) we just don’t want him to get too healthy, too quickly. What can we do? The Senior Consultant is getting very worried how quickly we’ve made him better. He’s afraid that the patient might infect all the other patients with his, er , over-healthiness…..”
OK, so that’s where the analogy rather runs out of steam. But the news of the past couple of days has felt a little like that. Senior Consultant (AKA Mark Carney, Governor of the Bank Of England) is getting twitchy at how well the medicine has worked and he’d like to change the dose.
It’s not surprising that he feels like that if you look at the papers . According to property website Rightmove, £10,000 has been added to average asking prices in the last five weeks. Now asking prices aren’t the same as selling prices as in a most cases, the selling price is lower (in the hot spots in London it’s the other way around but that’s the exception that proves the rule) as most of us would aim to get a chunk off that asking price.
However, what that shows is that there has been a huge influx of confidence amongst those putting their homes on the market and that confidence is getting the powers that be concerned about a bubble. The problem with bubbles, you seem is that they burst.
There are as many different opinions about what has caused this and how to deal with it as there are commentators.
For some, it’s the planning system, or the fact that mortgage companies are offering borrowers four and fives times their salaries, for others the problem is the Help to Buy scheme or the buy-to-let mortgages allowing first-timer properties to be taken out of the market. There’s even one commentator on the Telegraph website who blames “the constant pressure for over-breeding” but I reckon we can put him in the green ink brigade and ignore that one.
The one thing that most seem to agree on is that Help to Buy has done what it set out to do and then some. It has enabled people to get onto the property ladder with less of a deposit than they might have required a few years ago.
H+H’s Mark Oliver called for a scheme like this some years ago, arguing that it was required to get the new build market working again. He was right and that is precisely what Help to Buy Phase 1 did so well.
Help to Buy Phase 2 was for second-hand properties and many people feel that the price limit put on this phase was just too high.
I’ve just had a trawl through Rightmove to see what the top whack of £600,000 could get you round the country (nosing at other people’s properties in the name of work. yes, I admit it).
You could lived in gated splendour in Didsbury, Greater Manchester
Get up to groom the ponies at a five-bedroomed equestrian facility in Somerset , or, down in my neck of the woods, settle into this two-bedroomed flat (it’s a nice location, but still only a flat!) or live life to the manor born in a former Gentleman’s Residence in Holmfirth
My view is that, if you have aspirations to live in any of these properties then you probably shouldn’t be getting Government help to do so.