THE housing market is flashing warning signs. Is there an answer to saving the people who are ineffective in buying homes? You can find some interesting articles concerning property ownership at Lottoland. Their multi-million jackpot winners are always interested in buying homes. Lottoland is a global gaming company where you can find the latest lottery winning numbers. Click on the link for more information.
In this article, we hope to give you some ideas on what we can do to tame the housing market. There is not a single answer. It will take a lot of effort. Read on to find out more.
What is the current housing market fear?
While experts do not fear another 2008-collapse, there are other fears that can make things worse before they get better. We have had a decade of QE (quantitative easing), and we could be reaching the other side of the frothy housing market. On the other side, housing affordability is stretched to the maximum, and the debt-coverage ratios will rise sharply.
The result of this is a jammed bank lending process. The risk of failed loans will increase, and the flow of credit that the UK economy thrives on will stall. This scenario could cripple the banking system, add hardship to the government, and affect the citizens for several years.
As the worldwide tightening of money policies begins, the risk of a significant drop in prices is a concern. The Bank of England recently raised interest rates by 50 base points in an attempt to curb inflation. This is their 5th raise, and more are expected. This is a global situation. The United States raised its interest rate by 75 basis points last week. This is the most significant interest rate increase since 1994 in the United States.
Tips for taming the housing market
While it is not an easy choice, the UK needs to change the system. The consumer cannot address the system on their own. The changes must come from political-economic intervention at a systemic level.
Make Buying Property Less Inviting
This tip sounds counterproductive, but in reality, it will help long-term. Buying property is an excellent investment that comes with all kinds of perks. Buying property is profitable, from big tax benefits to adding massively to your asset portfolio. The problem is, when housing is prohibitively-expensive, the wiser investment it becomes. The better investment it becomes, the more prohibitively-expensive it becomes. Making buying property less inviting will break the cycle and help in the short term.
Build more homes
It is a pretty straightforward idea. By building more houses, you increase the availability. This will slow house price increases. Eventually, the consumer can catch up with the market, and everything will stabilize. The consumer demand for houses will always be there. It is part of human DNA to want the comfort and security of home ownership.
Though we just suggested building more houses, some people build lavish and unaffordable dwellings with the help of government benefits. There needs to be a tax on landlord groups who register as “limited companies” to pay less. These groups avoid income tax because, as a limited company, they can get away with paying corporation tax on their rental income. Some councils allow tax discounts on second homes and empty properties. This needs to be stopped.
Put people in empty houses
Builders continue to build homes that the average family cannot afford to live in. Yet, more than 100,000 people are stuck in temporary accommodations in the UK. Experts expect the numbers are expected to increase substantially in the near future. There must be some action taken to put long-term empty homes into use. Temporary housing is needed, but no one wants to live there long-term.
Young people find themselves in cities like London so they can find good jobs. However, rent in popular cities is extreme. The Affordable Housing Commission says that no one should have to pay more than 30% of their income for housing. In large cities, people often pay 40% or more. This doesn’t leave much to live on and save for houses they want to purchase someday. If the government cannot put rent control in place, it should buy homes and property to create better public housing in popular areas.
There are no easy answers to the housing market problems. We must look at unconventional and often tricky methods to solve the issues. It is going to require citizens, buyers, builders, and the government to work toward a common goal. Inaction is an action. It will allow the situation to continue to simmer until it boils over on its own. Perhaps making some hard choices today will lead to a brighter tomorrow.