Why Are High House Prices A Good Thing?

chucky

lostinrates wrote: »

Thank you:)

That's interesting. Do you know how rental income is treated fiscally, are swathes of property held by ''old money'' or pension companies, or is more a BTL model?

(again, no leading from me.)

i've no idea but they do have stricter housing laws - it would probably be more complex with Germany as you have a large amount of housing that would have been part of East Germany.

SandC

If 4 beds were £65k then everyone would rather get that and have more. It would work if people weren't given loans for other expenditure - interest free credit for a new 3 piece every couple of years etc.

The reason we got to the state we did is because people just wanted more and more and lenders allowed them to have it. It's resulted in a lot of greedy people.

I'll give an example - my friend and her partner bought their 3 bed 8 year old detached house from her dad (who previously rented it to her for peanuts). They had a child last year and her first thoughts were that they therefore needed a bigger house!!!!

Really2

SandC wrote: »

I'll give an example - my friend and her partner bought their 3 bed 8 year old detached house from her dad (who previously rented it to her for peanuts). They had a child last year and her first thoughts were that they therefore needed a bigger house!!!!

won't tell you what I did then

IveSeenTheLight

greggymagic wrote: »

ISTL Normally I think what you write makes good sense but please spare the anecdotal rubbish!

Why is it that the people nearer the top of the food chain always insist on telling people nearer the bottom of the food chain how lucky they are and that they should be grateful for what they've got!! Total champagne socialist rubbish.

I walk past a private school every morning and everyday I can here all the mummies chatting to each other about how "everyone is feeling the pinch" and how "people should just get on with it and tighten there belts if they don't have enough money, I mean we're all going through it" -

They then get into their 09 reg Landrovers and BMW X5s and toddle off for another hard day!

I apologise if you thought it was anecdotal, it was purely and sincerely a humbling moment in my life and gave me a huge perspective on my life and how fortunate I am.

I doubt that I would have such an appreciation as I do for what I have wihtout that experience.
It's possible that others do not understand because they have not witnessed how poorly other people throughout the world live and do so quite happily

I meant it in no way to come across as a top of the chain type post.

hundredk

PasturesNew wrote: »

If all studio flats were £20k, 1-bed flats were £30k, 2-bed flats £40k, 2-bed houses £45k, 3-bed houses £55k, 4-bed houses £65k, then most people would be able to own a home, to feel settled .... to be able to see a way forward to getting a larger house if they wanted/needed ... to be free to spend the rest of their money on doing stuff/having holidays/buying nice things - and above all they could see an end to having to pay back the mortgage.

Without the mortgage to pay back, more people would be less stressed at work, wouldn't have to let the boss break their b4lls each month by piling on more work that the worker felt obliged to do for free because they need to keep the job.

People would have the spare cash to have hobbies and interests and a better quality of life.

Less people would be 'trapped' into benefits because they'd be able to find jobs that covered their overheads. Less relationships would break up because of the high cost of borrowing and high rents.

People would be spending as much/more on goods/services (thus creating employment) because they'd have disposable income to spend on stuff.

People could afford to go on courses to change career/direction; they could afford the time out. They wouldn't feel left behind, left out.

Low house prices are a good thing all round.

Just skimmed this thread so sorry if I am repeating points already made but the first highlighted para caught my attention.

That's a big if and all very idealistic.

What about the economics of building, marketing and making a profit on houses for that cost. Lets say your figures are 1/3 of current prices. Do you cut the cost of a brick and all the other materials by 2/3? And the raw materials to make bricks and the maufacturing and distribution costs? If your earnings were £1000pm working in the brick factory, how do you think you could still be paid that when the cost of a brick is 66% less - maybe redundancy or a 66%cut in wages?

Many would get the best they can reasonably afford (or as pre credit crunch demonstrates, more that they can realistically afford). Either way, what happens when all the FTB have snapped up the £65k 4 beds cos its that easy? I'd probably be in the queue with many others looking for mansions available for a snip at £150.

All very idealistic, but at the end of the day the market determines the price by supply and demand - when more ppl want something they bid more for it, limited by either what they wish to pay or by what they can afford.

PasturesNew

Really2 wrote: »

Honest i am not picking or disagreeing.

But does death not redistribute it?
Could part of the problem not stem that the redistribution from death is going to a rising population (so less per head)

eg £100K going to 2 people (£50K)

£100K going to 4 people (£25K)

just a thought, as obviously this wealth as to come back or go somewhere, it does not just stick at the top.

Nobody's ever left me a bean ... so where is this death redistribution coming from?

PasturesNew

Dan: wrote: »

It's up to the individual to make this happen, not general society.

The individual can't always do that. All sorts of reasons:
- age
- geography
- resources/access to them
- financing
- even knowing

Really2

PasturesNew wrote: »

Nobody's ever left me a bean ... so where is this death redistribution coming from?

i have had £400 (thanks Nan it helped me pass my driving test:))

But it is for sure we will all die and our wealth will go some where and that can only be down to the next generations. (it cant just disappear)

I will leave all my estate to my son, or his grand children.

hundredk

Really2 wrote: »

Honest i am not picking or disagreeing.

But does death not redistribute it?
Could part of the problem not stem that the redistribution from death is going to a rising population (so less per head)

eg £100K going to 2 people (£50K)

£100K going to 4 people (£25K)

just a thought, as obviously this wealth as to come back or go somewhere, it does not just stick at the top.

Death does redistribute but if that the inheritance is a smaller sum, say the 25k, there may be more of an inclination to spend it on things that do not subsequently get redistributed, eg cars, hols etc (or pay off the cc). As the figure gets larger, say 50k or 100k there may be much more consideration in investing in an asset such as property.

greggymagic

ISTL

No worries.

There is always someone in the world who is worse off/or better off than you. The question is how can we, the people, narrow the gap between the best off and the worst off.