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Agreed. 20 years of lower and lower interest rates, meaning higher and higher mortgage amounts have driven up prices into oblivion. Either these prices are infl

by zpeti 5y ago

Agreed. 20 years of lower and lower interest rates, meaning higher and higher mortgage amounts have driven up prices into oblivion. Either these prices are inflated away or there is a collapse. There's not much else you can, UK housing market is so far from market reality that it's a joke. And ironically the more you create policies like lower deposit amounts for younger people, or subsidised mortgage payments, the more you drive up house prices making these policies hurt the next generation of young people more. Perfect example of government intervention making things worse creating more government intervention etc etc

ZeroGravitas 5y ago
Depends on what you mean by "government intervention". The phrase is usually used to stop people fixing problems like this, which are the kind of collective action problem that only government action can solve. The government intervention you mention is actually just the voters with property using their vote to protect their wealth. And that worked exactly as intended.
imtringued 5y ago
>Agreed. 20 years of lower and lower interest rates, meaning higher and higher mortgage amounts have driven up prices into oblivion. The falling of interest is purely market driven. There is no government intervention there. Interest rates have been falling for a long time, far longer than 20 years and the reason is pretty simple. There are people out there who do not spend their money. The interest rate simply moderates between saving and investment. If saving is going up relative to investment then the interest rate must drop. https://news.ycombinator.com/item?id=28373304 https://news.ycombinator.com/item?id=28373304 You say higher and higher mortgage amounts have driven up prices but if you spend $360k what is wrong with getting a $360k house out of it in the end? What's so good about paying interest?
- nly 5y ago
  > The interest rate simply moderates between saving and investment. For businesses perhaps, but this doesn't happen much at the personal level. Most people will save in cash, rather than invest, even if interest rates are zero or negative. Most people are risk adverse. Source: https://www.ft.com/content/2bcd4367-ef4c-4d1d-a69d-df2126b0fb63 https://www.ft.com/content/2bcd4367-ef4c-4d1d-a69d-df2126b0f... > While the annual ISA tally showed high levels of saving, most of the money went into cash ISAs, which offer low rates of interest and could leave savers vulnerable to rising inflation. > Some 300,000 new subscriptions went to stocks and shares ISAs, compared with 1.2M new subscriptions for cash accounts. So that's only ~20% of savers investing in to stocks in the most tax efficient way possible in the UK, even when the Bank of England base rate is at 0.1%

by zpeti 5y ago

ZeroGravitas 5y ago

Depends on what you mean by "government intervention". The phrase is usually used to stop people fixing problems like this, which are the kind of collective action problem that only government action can solve. The government intervention you mention is actually just the voters with property using their vote to protect their wealth. And that worked exactly as intended.

imtringued 5y ago

>Agreed. 20 years of lower and lower interest rates, meaning higher and higher mortgage amounts have driven up prices into oblivion. The falling of interest is purely market driven. There is no government intervention there. Interest rates have been falling for a long time, far longer than 20 years and the reason is pretty simple. There are people out there who do not spend their money. The interest rate simply moderates between saving and investment. If saving is going up relative to investment then the interest rate must drop. https://news.ycombinator.com/item?id=28373304 https://news.ycombinator.com/item?id=28373304 You say higher and higher mortgage amounts have driven up prices but if you spend $360k what is wrong with getting a $360k house out of it in the end? What's so good about paying interest?

nly 5y ago
> The interest rate simply moderates between saving and investment. For businesses perhaps, but this doesn't happen much at the personal level. Most people will save in cash, rather than invest, even if interest rates are zero or negative. Most people are risk adverse. Source: https://www.ft.com/content/2bcd4367-ef4c-4d1d-a69d-df2126b0fb63 https://www.ft.com/content/2bcd4367-ef4c-4d1d-a69d-df2126b0f... > While the annual ISA tally showed high levels of saving, most of the money went into cash ISAs, which offer low rates of interest and could leave savers vulnerable to rising inflation. > Some 300,000 new subscriptions went to stocks and shares ISAs, compared with 1.2M new subscriptions for cash accounts. So that's only ~20% of savers investing in to stocks in the most tax efficient way possible in the UK, even when the Bank of England base rate is at 0.1%