Saturday, September 06, 2008

Repossession is a tragedy but also a zero sum game

Published: August 12 2008 03:00 | Last updated: August 12 2008 03:00

From Dr Peter Harvey.

Sir, Chris Giles's amusing suggestion of "government sponsored arson" to increase demand beautifully illustrates the perverse logic of all these hair-brained proposals to support the housing market ("One way to heat up house prices", August 8). Nevertheless, desperate scenes of families losing their homes will mean that the chancellor will have little option politically other than to spend more of our money on being seen to try to address the problem.

Nonsensical economics aside, however, forcing those who choose not to overstretch themselves to subsidise (through tax or inflation) those who do is an unedifying prospect. Making non-homeowners, in particular, poorer in order to keep prices too high for them to afford is simply cruel. They should not be made to pay off mortgages on other people's houses, to prop up the unearned equity of Middle England, to underwrite the profiteering of speculators or to lock in the "earnings" of buy-to-let landlords - or be encouraged with this or that scheme to enter a market yet to fall to sustainable levels.

Repossession, while a tragedy for those involved, is also a zero sum game: for every family forced to relinquish a property they cannot afford, another has the chance of buying at a price they can. No amount of market manipulation can increase the proportion of people who are comfortably housed; this can be done only by changing the number of houses or changing the number of people.

Peter Harvey
Mathon, Worcestershire WR13 5NZ, UK

Via HawkEye, my eagle-eyed helper!

1 comment:

Anonymous said...

I think I'm going to bring up this point at my next Council as we're always offering safety loans, etc. to people on the verge of repossession.