Sunday, 23 November 2008

A Solution for Gord and Ali

Second post today, just had a shower and shave and am firing on 2 ½ cylinders.

I have just had a thought that will solve our problems in one stroke.

What Gord and Ali have to do is: reset house prices,
yes, press the reset button, reduce all house prices to their current value-approx- 20% less than they are now, and reduce every ones mortgage to the same amount.
People wouldn't fall behind in their payments and repossessions wouldn't happen.

That would put hundreds of pounds in peoples pockets each month, would eliminate negative equity, and would not involve “tax cuts” now and “tax rises” in the future.

Stuff the Banks and Building Societies’; they have got enough of our money.

People would then have money, be able to spend and “kick start” the economy.

Well Gord and Ali wadya think eh?

Worth a try.



Colin Campbell said...

Can I wait until prices are reset and then buy into the market? Not sure that people who are looking to sell for genuine reasons would be too happy.

Colin Campbell said...

Great old cars. I marvel at how easy cars are to look after now. So reliable compared to that era of travel.

angus said...

That's the whole point, prices would be lower for buyers and sellers, and it would get the housing market moving as well, aint it a brill idea?

angus said...

They amy be easier to look after but they are not nearly as much fun as then, and the satisfaction of fixing your own car surpasses the comfort and reliability now.

It was a time of "proper" motoring.

James Higham said...

Two and a half cylinders is more than enough for a Sunday. :)

angus said...


Not if you're supposed to have ten to start with.

Good luck with the "other" thing.

Gallimaufry said...

Great blog Angus, welcome and hope you continue your high standard: I gave up on quality control yonks ago.
Just a teensie point about your mortgage reset idea - the banks and building societies got the money they lent out as mortgages either by borrowing it wholesale or attracting savers. They will still have to repay them £x + interest even though the mortgages would be worth £x - 20%. So the banks and building societies would go bust and savers would lose money and no one would lend money. My idea, that I've had since the last property crash is to make all houses subject to capital gains tax with relief for maintenance and improvements. Also, house prices would be incorporated into the definition of inflation that the BoE has to control. The idea is to turn houses back into things to live in rather than investment vehicles.
If mortgagees can't keep up payments, the term should be extended to reduce monthly amounts.

angus said...

I realise that savers would be hit but, isn't it better to have the housing market moving than savers to get what? 3 or 4 per cent,if we are heading towards 1% base rates it isn't going to make a lot of difference. The banks have caused this problem and have been "rewarded" by being given Billions of our money,because they went "bust", if the housing market was in flux then they would be able to lend money again. And to be honest I don't really care about the banks, the government has assured our savings, up to a limit, and I don't think it would cost the £100+ billion we are going to have to prepay because Gord and Ali can't keep it their trousers.

Good point though, and thanks for the welcome.