Tuesday, April 22, 2008

Not with my taxes

Just been reading an article about some vague governments plans to assist homeowners facing repossession and prop up the housing market.

Sorry but - eh? Housing in the UK is overvalued - it has grown substantially faster than wages in value over the last 10 years or so - it needs to cool off. The last thing the government should do is intervene in this case.

As for assisting people stave off repossessions? I have no issues with the government offering financial advice to people at risk through existing channels - maybe suggesting things like cancelling their Sky subscription and getting a bus to work instead of driving - but I absolutely object to bailing people out of responsibility for their own investment decisions with public funds. Contrary to the advice seemingly given out by these banal property programmes that plague our TV these days, you shouldn't take out a mortgage at the absolute limit of what you can afford. Add 4% to the rate and check whether (in a pinch) you could still make the repayments. If you can't - then don't take it out in the first place.

Sorry government but if you can't use our taxes more sensibly than this - then reduce tax rates and give them back! In the meantime let house prices fall a bit - then they'll become more affordable anyway - duh!

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