Falling house prices

House for sale
Originally uploaded by DryIcons

“Rising fuel costs, utility bills, startling food price increases are represented as bad. But house price increases are considered good.“

This is bizarre. Rising prices are good for sellers and bad for buyers, while falling prices are bad for sellers and good news for buyers. This applies to food, fuel and, of course, houses. The only difference is that lots of people, including most journalists, are potential sellers of houses but buyers of food and fuel.

Because of this, David Cameron’s idea to “help those who want to get on the housing ladder by implementing our plans to take nine out of 10 first-time buyers out of stamp duty. At a time of falling house prices and lack of affordability, the Government should do what it can to support first-time buyers” is not just misguided, but it would actually harm first-time buyers and help those already on the housing ladder.

Not that Labour seem to be proposing anything different, mind you:

“Nothing could be more immoral, then, in the current climate, than using government efforts and taxpayers’ money to encourage first-time buyers to enter the housing market in order to stabilise the dodgy situation that banks and incautious borrowers have got themselves into through overlending and overstretching themselves: row, row harder, keep us all afloat! Yet that appears to be what the Government’s strategy is.“