Today in the news it came out that Rachel Reeves is loosening lending criteria for first time buyers allowing them to borrow up to 6x salary. She seems to be selling this as a way to get them on the housing ladder BUT people are struggling to afford their mortgages as it is. Housing defaults have risen for the last 8 quarters, interest rates are high, house prices are high and this meddling is only going to inflate the cost of housing at the bottom end of the market and mean that first time buyers work harder and for longer to pay off their debts.
I am just fed up of these inflationary policies (stamp duty holidays/increased lending multiples) falsely sold to people as a way to help them.
The only people who profit from these policies are the banks and the government.
The bank profits as high lending means increased profit for them.
The government then profits as bank profits make the economy look like it's doing better, when we can all see that the country is failing.
Increased lending and its effect on house prices is a lever to get us to work harder as we won't be able to retire until we're nearly on death's door.
Anyway. This is mostly a cynical rant but I wonder what the next nonsense sold to us as helping us out will be..... Multigenerational mortgages/50 year mortgages/125% mortgages (again!)? The banks will lick the arse of any politician who agrees to that.
People on an average salary should be able to afford to live a comfortable life but housing stock is being monopolised by REITS (real estate investment trusts) and 'property investment' by landlords. Without control of REITS and continued restriction of lending, house prices will inflate and birth rates will collapse further as people can't afford to have families due to high rent/mortgage payments.
The social contract is broken. Welcome to 2008 round 2.