The UK's so-called "strong economy" relies entirely on credit, underpinned by high property prices: Discuss.
On the one hand encouraging the "buy or die" mentality of Britain, and on the other ensuring high population pressure by immigration, is essential to prevent total financial collapse. It is necessary that it becomes ever harder for people to own property, and paramount that they want to. Note also that nearly all top political decision makers will own two or more properties.
Answers:
The income method of calculating GDP adds together the total value of all incomes that have been earned in a given time period. Since money borrowed is being used as if it were income, bank and building society profits are included, and borrowing is at record levels, the economy appears to be strong. But, like the boom before the slump in the 1920s, the economy today is like a house of cards and collapse in any market (housing, agriculture, manufacturing) could bring it down.
Stock market investors moved into property 5 years ago owing to erratic stock market returns and the building societies and banks promoted "Buy to rent" mortgages for older people whose incomes were high and mortgages maturing. The combination of investors and buy to rent have now doubled house prices.
Immigrants have probably not added much to the spiral as they tend to get low paid jobs and often live in low rent accommodation. Consequently, they do not significantly contribute to rising property prices. By contrast, some time ago, a BBC website report claimed that there were 720,000 empty houses in the UK which were being kept empty by landlords to raise rents and to inflate property prices.
The biggest worry must be the huge amount of debt because inflation may cause redundancies and when enough people lose their jobs, there will be repossessions and finance houses suffer large amounts of bad debt. Like I said, the economy is built like a house of cards and could collapse.
I hope this controbutes to your discussion.
Political decision makers owning property is a read herring.
High property prices are caused by the lack of houses, Gordon Browns investment in 170,000 new houses will overturn this in the next decade.
The 'Buy or die' fever is well discussed in the literature, as the stock market becomes ever more unstable, investment else where is a natural consequence. Future trends will be to buy cheaper houses abroad, immigration in reverse will become a feature of the economy in the next 15 years
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Answers:
The income method of calculating GDP adds together the total value of all incomes that have been earned in a given time period. Since money borrowed is being used as if it were income, bank and building society profits are included, and borrowing is at record levels, the economy appears to be strong. But, like the boom before the slump in the 1920s, the economy today is like a house of cards and collapse in any market (housing, agriculture, manufacturing) could bring it down.
Stock market investors moved into property 5 years ago owing to erratic stock market returns and the building societies and banks promoted "Buy to rent" mortgages for older people whose incomes were high and mortgages maturing. The combination of investors and buy to rent have now doubled house prices.
Immigrants have probably not added much to the spiral as they tend to get low paid jobs and often live in low rent accommodation. Consequently, they do not significantly contribute to rising property prices. By contrast, some time ago, a BBC website report claimed that there were 720,000 empty houses in the UK which were being kept empty by landlords to raise rents and to inflate property prices.
The biggest worry must be the huge amount of debt because inflation may cause redundancies and when enough people lose their jobs, there will be repossessions and finance houses suffer large amounts of bad debt. Like I said, the economy is built like a house of cards and could collapse.
I hope this controbutes to your discussion.
Political decision makers owning property is a read herring.
High property prices are caused by the lack of houses, Gordon Browns investment in 170,000 new houses will overturn this in the next decade.
The 'Buy or die' fever is well discussed in the literature, as the stock market becomes ever more unstable, investment else where is a natural consequence. Future trends will be to buy cheaper houses abroad, immigration in reverse will become a feature of the economy in the next 15 years
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