UK property prices are at an all-time high compared to salaries.
By any comparison.
About twelve years ago, after changes which allowed a spouses salary to contribute to the mortgage assessment, the average mortgage was about 3.5 times the combined salaries.
Today its about 9 times the average salaries which means repayments are excessive and any increase in interest rates which pushes those repayments higher, or inflation which erodes disposable income and spending power, may cause many to default and incur hard debt.
Even with a property price correction we must address negative equity to reduce mortgages and stabilise the global economy because this is the fundamental illness which threatens long-term health of banks.
Otherwise, mortgagees will never be Owners but life-long tenants; for as long as they do not default. If they do, the lose everything and incur negative equity debt. They are effectively bankrupt and as defaulters they are unlikely to be given an opportunity to start again.
We must consider whether domestic property is an investment in homes for citizens to raise the children of a nation, or a speculative entity which can buffet a population causing great social unrest and instability?
If governments are serious about nation building, they do not have to restrict buying to nationals, but they should penalise buy-to-let and second homes with higher taxes and create an environment in which more citizens can own rather than let; effectively guests in their own country.
