Britain cannot afford another house price bubble
03-30-2014
By Daily Mail Comment
Priced out: In London, where prices have increased by 20 per cent in some boroughs, it is near impossible for first-time buyers to make a purchase
Priced out: In London, where prices have increased by 20 per cent in some boroughs, it is near impossible for first-time buyers to make a purchase
Amid more positive economic news this week, one dark cloud hovers: the prospect of a dangerous new housing bubble.
On Wednesday, the Office for Budget Responsibility warned of ‘bubbly activity’ in some parts of Britain as soaring property prices are inflated by speculators banking on further gains.
A day later, the Bank of England revealed the number of borrowers being offered worryingly large mortgages was at an all-time high – with one in ten homebuyers borrowing more than four times their income.
In London, where prices have increased by 20 per cent in some boroughs and the average property costs almost £500,000, it is near impossible for first-time buyers to get on the property ladder and rents are rising to unsustainable levels.
Indeed, it is no exaggeration to say that hysteria is gripping parts of the South East, where gazumping has returned with a vengeance and many buyers are having to resort to blind bids to try to secure purchases.
Add to this the fact that the Chancellor’s relaxing of the rules on annuities means many people will be using their pension pots to invest in buy-to-let properties.
Throw in the fact that the Government’s help-to-buy scheme (which this paper believes the Tories will come to regret) is also driving up prices.
The problem, of course, is one of supply and demand. There is not enough housing to go around – something that is being exacerbated by mass immigration.
While the Chancellor may have convinced himself there is an electorally useful feelgood factor to rising house prices, a bursting housing bubble would spell disaster for the Tories – and Britain.
BBC’s bedroom bias
From Day One, the BBC was determined to undermine Iain Duncan Smith’s sensible policy of removing the spare room subsidy paid to some families in large houses who are in receipt of housing benefit.
The Corporation insisted on calling it a bedroom tax – a disgraceful misrepresentation of what is, in truth, a modest reduction in State handouts – and gave voice to apocalyptic warnings of the poor being ‘ethnically cleansed’ from some towns and cities.
Yesterday, on the first anniversary of the policy, the BBC declared it a failure because fewer than one in ten people living in properties with spare rooms had moved out.
Strip away the institutional Left-wing bias, however, and it becomes clear that not only have the new rules saved the taxpayer £1million every day, they have also freed up 30,000 larger homes for families in need of accommodation.
Skewed priorities
It has been another awful week for Britain’s biggest police force.
First Met Commissioner Sir Bernard Hogan-Howe admitted he has no idea how – or why – lorryloads of files containing claims that corrupt officers stole and trafficked in drugs, took bribes and sold confidential intelligence to criminals had been shredded.
Now the Met is involved in a scandal over fiddled crime figures after it emerged that, to boost detection rates, a single offender had 500 burglaries – spanning six boroughs – ‘taken into consideration’.
Questions to answer: Metropolitan Police Commissioner Sir Bernard Hogan-Howe speaking to MPs
Yesterday, the Met revealed it has 105 officers working on the hacking inquiry and a further 40 on the historic Jimmy Savile files – almost four times the number of staff dedicated to its own anti-corruption probe.
This is a crazy sense of priorities. The Met should be concentrating on restoring its battered integrity, which is so badly undermining public confidence in the police.