Monday, 21 April 2008

Blame house prices on second home owners

Britain is apparently one of the richest countries in the world and has enjoyed a decade of economic boom.
So why is it that, particularly in the south-east of England, most people I know are struggling to make ends meet?
The principal reason is that our homes cost way too much and for most of us paying off the rent or mortgage takes up the lion's share of our wages.
It's virtually impossible for first-time buyers to get onto the property ladder at the moment unless they are able to conjure up a whopping deposit from somewhere.
The cost of homes - which average more than £200,000 - is unrealistic bearing in mind that the average wage is about £22,000 per annum.
How has it managed to escalate to this level?
The English are obsessed with owning their own homes, preferably so they can do them up and add value to them at the same time.
Secondly, mortgage providers which have been prepared to offer us loans of up to six times our salary have led to many us being mortgaged up to the eyeballs.
But there's another factor which has pushed prices up way further - people who own second homes.
I'm not just talking about the filthy rich who have holiday abodes in places like Cornwall or Wales.
There has been a money trend of people, some of whom would not be considered wealthy, purchasing buy-to-let properties.
They have been encouraged by the Government which has provided investors with tax breaks and mortgage companies which have offered them special deals.
This has helped property prices to rise beyond the grasp of the average man or woman.
Perhaps it's about time that the Government penalised those who are rich enough to buy a second home by giving them a higher rate of tax instead of encouraging them to treat homes as investment opportunities.
Sadly it looks as if we are now in for a crash in house prices. But at least a 'correction' in the market might make homes affordable once again for ordinary people.

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