The truth is that the house price crash is, overall, good news

Paul Gate

At last, somebody has described property 'investment' correctly; a socially destructive parasitism

David Owen

Rod Liddle - as always - writes a great deal of good sense in his piece on the downturn in the housing market. But don't forget that those of us who fully intend to stay in our homes till they carry us out for the last time may come to depend on their value as a cushion against the upper millstone of Caring Gordon's trashing of our painfully saved-for private pensions and the nether one of ever rising council tax demands. When the gap is too narrow for food, heating and the other essentials, what else can we hope to do except borrow on the notional value of our one solid asset which so far HMRC and the politicians haven't managed to get their hands on - not until we pass on, that is....

Michael towsey

As usual, Rod Liddle hits the nail on the head with his analysis of the British obsession with property as socially, culturally and economically harmful and grubby.

Rather than being seen as a sign of economic virility, high house prices are purely and simply a harmful manifestation (whatever the causes) of inflation in a particular class of economic good. Nobody would boast if the price of food were three times higher now than ten years ago. The recent housing boom is the most conspicuous give-away sign of the hollow reality behind a decade of fantasy economics.

House price inflation is caused by a variety of things, only some of which can be laid at the door of government. But there can be little doubt that government policy over many decades has provided an atmosphere of encouragement for this distortion of economic, social and cultural life. However two changes in government fiscal policy might make a contribution. First the phased abolition of exemption of owner-occupied property from capital gains tax. A windfall gain in this class of property is as much a windfall gain as in any other class of property. Not treating it as such just encourages the notion of something for nothing when owner-occupiers sell up. A change in tax policy of this nature might overall, dare one say it, go some way towards encouraging people to stay put in their homes and helping to form communities with longterm roots.
Such a policy could arguably be tweaked (though I don't know if it should be)in favour of those who need or want to sell their home to buy a more expensive property to live in. The difference in the price of the new property could be set off against any increase in value of the old property for tax purposes.

Secondly government needs to encourage investment in housing for longterm rental by pension funds and other holders of investment funds. Such diversification of investment away from a too narrow focus on equities could only benefit such funds. This requires a tax and property law regime which would benefit and safeguard both the providers and occupiers of such property in such a way as to balance up the longterm benefits between owner occupation and renting and provide an incentive to supply such accommodation on the necessary scale. I believe this is a common form of investment by pension funds in some other European countries.

The property market has become a Golden Calf of our day which badly needs to be overturned. Any modern day Moses out there?

Sara W

The fixation on property values is a direct consequence of tax and pension policies by successive governments, which have sadly turned us into a nation of spiv property developers.

The destruction of the value of pensions by Gordon Brown has greatly exacerbated the problem - how else are people to protect their savings from a rapacious State other than investing in property? But the whole thing has become unsustainable, and to break the cycle the tax exemptions on main dwellings must be limited to those in which people have lived for at least 10 years. Investment in business must be made more tax-efficient - and safer. And people's pensions must be protected in law: they belong to savers, not to the Chancellor of the Exchequer or to dodgy company directors

David Page

You've missed the most insidious aspect of this nasty business -- that the MIRAS tax break still exists for BTL. This more than anything has inflated house prices while robbing the exchequer of much needed revenue. In addition to having renter's pay off all of the capital of their mortgage loans, BTL investors get all of their mortgage interest paid by the taxpayer (because it's a 'business' expense), unlike the poor fools who (are able to) buy their homes to live in.

Bailing-out the banks with billions of pounds of taxpayer money puts the cost (or burden) of individual home ownership on the public purse. We heard no noise from these people when prices were going up and profits into pockets and re-mortgages, yet now the music is stopping everyone else has to cover their mistakes -- the privatisation of profit and the socialisation of loss. Astonishingly, it is only because so many people bought homes they couldn't afford with money they didn't have that the taxpayer is expected to respond.

Be clear about what this means -- the UK government is acting in concert with the banking industry and the private investor to maintain stratospheric house prices; to insulate them (with taxpayer's money) against every falling to normalcy. An entire generation of people are being permanently priced out of home ownership -- kept paying the mortgages of others in privately-rented accommodation -- a new breed of have's and have not's.

That this collosal inequity was ever allowed to happen is a disgrace; that it still persists is an outrage, and down to Gordon Brown alone.

Remove the tax breaks for the BTL leech feeding off the body of the British housing supply: a painless (politically, as well as morally) way to restore some balance to the UK housing market.

NickT, Aldershot

I never thought I would enjoy an article written by Rod Liddell so much. Brits appear to have forgotten the primary purpose of a home is to provide shelter and Rod Liddel exposes this well.

Perhaps Rod Liddle could next explore why Labour's best brains seem keen to keep property prices so high. I believe high property prices benefit only those who are already rich enough to afford one, or many homes, but at the expensive of those on low incomes or, like myself, those who have to rent. I can not see the political value in having such poor monetary policies that a credit-fuelled asset bubble occurs; such a bubble will never align itself with the political cycle and, under Murphy's Law, will burst at the most inopportune moment.

nmarks

Bravo, Mr Liddle.

You are duly awarded the housepricecrash.co.uk Gold Medal for Making Good Sense.

Kingwowns

Well done on the house price crash Rod, but on the issue of "Hearts" - Do these "stupid gullible women" include your wife who shamelessly plugged that particular scheme in the Spectator as "the rather glorious feeling of naughty financial independence"?

The house price fiasco comes directly from the same ignorance as asking your yoga teacher for financial advice!!

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