Although
interest rates may have come down
from the levels a few years ago the
downside economically is that
cheaper money fuels demands which
pushes up prices and people can be
back to square one so perhaps we
need to look at the macro side of
things, how the market works as a
whole and what can be done to make
things better? We want to start a
debate rather than prescribe any
particular way of regulating the
market.
I am
writing to ask if you might consider
supporting the campaign. Might I
also ask if it would be possible to
copy this to people you know who
might wish to be involved.
News Release
date:25.1.05
Subject :As news reports
stream in of house prices climbing
beyond the reach of ordinary people
a new personal finance campaign is
launched today intended to influence
the House Price debate.
The
coordinator will be Bob Goodall who
ran Save Our Building Societies and
was national campaign worker and
press officer for the 1997 tactical
voting campaigns.
Storyline: The objective of
the group will be very modest and
attainable. It will be solely to put
on the national news and political
agenda that we need to regulate the
house price mechanism rather than
prescribe a particular way of doing
it. It is to start a debate on what
we might do to reduce house price
inflation rather than increasing
supply of housing to meet ever
increasing demand.
How the campaign will
develop
Bob
will write to supporters of the
Save Our Building Societies
campaign and other campaigns he
has coordinated. Bob says "It
will be like throwing a stone
into a pond and watching the
ripples spread outwards".
National and local media will be
key to the success of the
campaign.
He says
"I think it is an idea that will
appeal to people across the country.
I really do not think it carries
political risks for any MPs
supporting the campaign as it merely
suggests we need to look at it
rather than advocate any particular
way".
Bob continues " I feel very strongly
that I can sell the idea to people
who may feel they have something to
lose. No one benefits from house
price inflation. High house prices
is an illusion of wealth that means
higher costs such as insurance. A
person only realises the wealth if
they sell their home then the
'wealth' is gone when they buy
another one unless thet move away.
The house price bubble has spread
out so it is harder to capitalise in
this way.
Also a
home owners children or wider family
are affected by high house prices.
They may need to move away from
their parents to buy a home.
Additionally public services in
areas with high house prices (where
there may be the biggest vested
interest against the idea of
regulating the market) can be poorer
than elsewhere because the workers
may find it harder to live in the
area. The way round this is not to
raid other countries of their key
workers. Anyhow such workers will
also move to cheaper areas as soon
as they can.
Also House price inflation
undermines our economic performance
and the competiveness of business in
the global market place.
House price inflation
reduces the standard of living of
people because they have to find
more to pay for a home. They can
also afford to buy less goods that
dents demand for products.
He says
"I think this can all be turned
around. Regulation is a free tool
for the government that
costs nothing financially".
"The
price mechanism means that with
limited supply of land and
increasing demand through rising
population or because people wish to
live on their own the cost of houses
will continue to rise.
With one hand people work to raise
their standard of living but lose
with the other as the cost of
finding a home increases. Also if
people earn more and perhaps both
partners work demand push increases
and so do prices and people are back
where they started."
"Also if
we would like children to support
their parents more in later life
rather than rely totally on the
state it becomes harder if children
are forced to move away to be able
to afford a home.
The best
way of ratcheting up the standard of
living of people in this country is
to regulate the biggest cost in
their lives -housing."
"Our nations competiveness in
the global marketplace would be
improved if people could be as well
off or better than they are now but
need to receive lower increases in
salary to achieve this. ie to meet
their costs." (One
example The NHS I believe has
boosted our standard of living by
providing cheaper medical service
than one that people would otherwise
have to pay for privately)
"It
is not about taking anything away
from people merely regulating the
future market through any number of
ways. I do not wish to push for any
particular only for a national
consensus to be reached that we need
to do this in some way, the
alternative been to concrete over
larges areas of our country".
I am
absolutely convinced as I was with
the Save our building Societies
campaign that it is a campaign
waiting to be fought.
"We
protected cheaper mortgages through
the Save our Building Societies
campaign but to bring home the full
benefit of this to the consumer
perhaps we need to ensure that the
cheaper money does not serve only to
increase demand thus push prices up
and negate the saving."
A related issue for the future
We also
need to return to rent control. The
housing benefit bill has gone up 4
fold to over £11 billion a year and
a vast industry has grown up
exploiting those who cannot afford a
home of their own often at the
expense of the taxpayer.
Unfortunately housing assocations
have been involved in this. A huge
poverty trap has been created where
people are financially worse off not
working. The other nasty side to it
is that rents have been greatly
inflated by the housing benefit
available. This has meant that
people working have to pay far
higher rents because the state has
pushed up rent levels.
The
campaign can be contacted on
01727 847 370 or
bobgoodall@hotmail.com. Both
can be published and broadcast.
