UK house price rises accelerate, says ONS
The England’s house price has been dramatically inflated since 2007 due to tax. It is increasing four times faster than population’s wages. This may result in housing bubble in accordance with those struggling low income people try to make the mortgage.
Firstly,
I think the future of this trend is not good for UK because the price of accommodation
is too much higher than cost of living. So, people will not afford their
housing price. If UK government allow the price of accommodation follow the
market price that it sharply rose, it will be a problem soon.
Since
the price is too high as aforementioned, low income people will not be affordable.
This cause them to make a large deposit which is not sustainable and reliable
for the bank. Thus, it could turn into Non Performance Loans.
Last
but not least, UK government must have some rule to manipulate the housing
price. For instance, controlling the housing inflation in a proper rate and
reducing land tax to low rate.
Reference
Arm seems to favour communist control by the government over free markets and free decisions by citizens. Is this the best solution to the problems he discusses?
ReplyDeleteAre high prices in houses a good reason to support and insist on communist like control of people by government?
I just read a thread about Thailand house price; it quite similar to UK situation. Some people forecast that the bubble economy might happen soon if the price continuously increases. I think that in the soon future the trend of buying estate might be in the low circuit, and people will be interested in rented house instead due to its lower price.
ReplyDeleteI prefer renting to buying. Buying is a massive tie up of finances for an extended period.
DeleteI think a better solution than state limits on house prices is the prevention of monopolies, thus allowing more businesses to more easily build more houses. As supply increases, the demand and therefore cost of houses, should decline.
I think the same for most things now controlled by governments:education and health care are expensive because governments act to force unnatural limits on health care and education providers. This benefits only those already in the business - officially licensed doctors and teachers, who are often not good, but merely legal.
What is ONS?
ReplyDeleteI came here to find an answer to what is ONS too, and still i couldn't find it here. So, I googled it and here is what ONS is http://www.ons.gov.uk/ons/index.html.
DeleteONS stand for Office for National Statistics.
DeleteJust because everybody wants a house, doesn't mean everybody will get a house, everything comes with price and I think that is what our world is now.
ReplyDeleteYou need to always remember that business is not charity.
Fortunately for me, my parent buy our house in 20 years ago, and in that time, the price is very cheap for us to afford because the area around the house in not prosperous. But, now there are many developments here and that cause the area is more expensive than the past.
ReplyDeleteI'm sure that UK government will do something to solve this problem. As you said, if it let the price continue rising, there will be many consequences, especially in economics.
ReplyDelete