Buzzin Disgrace

Theo Paphitis, self-made millionaire, best known as a panellist on the Dragon’s Den TV show, is the first person I have heard speaking out against the possibility of further interest rates being a good thing, stating that it is propping up the artificially high cost of houses.

Interest rate cuts are currently solely geared towards those with mortgages, doing nothing to help taxpayers who are renting property.  It is also to the detriment of savers.  Some savers, including pensioners who have been prudent with their money and not over-stretched themselves by taking on debt, have seen up to 75% cut in their savings.

Surely a more sensible approach to lending and more level house prices will kick start the housing market and be a better long term strategy than the populist short term, short sighted politics that is being currently implemented.

I was outraged to hear that last month (January 2009) house prices increased!

I heard someone interviewed this morning who was in favour of further interest rate cuts as it would help pay the mortgage on his own house and help with a new mortgage he was looking to undertake with his partner for a second home.

It is this kind of greed that has created this recession and has over inflated the price of houses in the UK in the past decade.  Many people see owning more than one house as a way of increasing their income through schemes such as ‘Buy to Let’ while others are struggling to pay rent or a mortgage for a family home, not for profit.

I am opposed to further interest rate cuts as this doesn’t help all taxpayers.  I believe a cut in the basic rate of tax would be a better solution as it would give individuals the choice to save or spend.

If interest rates are to be cut, wouldn’t it be a good lead for the government and the Bank of England to persuade people to be less greedy by offering a cut in interest rates only to the first property of anyone who has more than one, and maybe include payment to those who are renting too.