House Price Increases-what for?

kabayiri

Also, the idea that skilled Knowledge-based people from India or China are cheap is laughable too.

The last set of Indian contractors I had to budget for were over £400 a day. You can forget this dollar a day business.

julieq

It's a bit of myth that there is no manufacturing here, the fact that we were hit very hard by the recession demonstrates that it's an important sector, many companies feeding the automotive business were crippled, and this includes odd sectors like the chemical processing industry which feeds car making to a surprising extent. But it's a fact that labour costs out East are far lower like for like than here, and however wonderful our traditions of manufacturing were, we can't meet global price expectations. Knowledge-based contractors are one thing, general labour in a manufacturing plant is quite another.

Incidentally I have been to Nissan. It doesn't use many of our traditional manufacturing methods, it uses methodology and management systems imported from Japan lock stock and barrel. Mini is heavily inflected with German methods, Germany despite having expensive labour has traditionally had high levels of productivity and engineering excellence. We may have had something to offer 80 or 100 years ago, but we can't sell those products any more.

It's not all bleak, but you can't live in the past. Harking back to glorious days stops you learning the harsh lessons of the modern world, where capital can flow into one region from another in ways that weren't possible in the past.

Ultimately this should boost the value of the economies where the capital ends up so that the value of what we have falls in relative terms, and you can see this happening with the housing market already where from an external viewpoint our prices have dropped much more than we see here. I've mentioned this a few times, it's one of the reasons for the paradoxical behaviour of the London market in particular I suspect.

misskool

Sapphire wrote: »

Mass manufacturing in a diverse number of areas gave employment to masses of people – and meant that communities formed around such employment.

Not being offensve but I don't understand why it has to be mass manufacturing. Surely any industry capable of employing a critical mass to keep a place going is enough, that can be knowledge based rather than manufacturing?

julieq

misskool wrote: »

Not being offensve but I don't understand why it has to be mass manufacturing. Surely any industry capable of employing a critical mass to keep a place going is enough, that can be knowledge based rather than manufacturing?

Given the dubious quality of our state education, a knowledge based economy may be asking a lot. You have to contrast the levels of skill and motivation of graduates in the UK and (for example) Shanghai, it's something we should be very worried about.

We'll always have some level of local manufacturing industry, and we do have some marketable skills on a global basis, but these are increasingly niche based.

bumpoowee

HAMISH_MCTAVISH wrote: »

Because HPI is good for the vast majority of people.

..blah blah..

No contest really as to which is better for the vast majority of people in society.

I can hear the van with the men in white coats coming for you...

bumpoowee

Quizzical_Squirrel wrote: »

Ok but to turn that around ...

People who wish for hpc is [sic] most of them do not have the skills or brains to get what they want any other way ...simple really,
so they wish house prices to crash to bail out their inadequate financial position in society..

To paraphrase: the only way you'll succeed is by the failure of others not through your own merit.

Do you see? It's just as horrible and unfair that way round isn't it?

It's not really horrible and unfair because that's a load of crap. For example both myself and my partner earn well over the national average wage we used to live (rented, couldn't afford to buy the place) in a 3 bed detached house next door to a family where neither of the parents earned anything comparable to us but owned the house and had a low mortgage.

So the youth of today can earn far more than their parents yet not afford anything like the same quality of housing. Hence what you said is garbage.

CLAPTON

HAMISH_MCTAVISH wrote: »

Because HPI is good for the vast majority of people.

HPI benefits.....

1) The millions of people who are approaching retirement and may wish to, or need to, downsize and release equity to support themselves.

2) The millions of people who have mortgages and who are reliant on achieving a certain LTV to get the best rates.

3) The owners of the two million or so investment properties in the UK.

4) The millions of people who have purchased in the last few years, and who would be in, or close to, negative equity.

So the vast majority of people.....

HPC on the other hand, only benefits.....

1) A few hundred thousand potential FTB's, and as soon as they buy they will benefit more from HPI for all the reasons above.

2) Another few hundred thousand potential upsizers, in theory.... But the reality is that most upsizers in this crash have hardly benefitted at all, because the prices of FTB properties have fallen further than the prices of more expensive properties. So they have seen their flat fall in price by 15% or 20%, but the house they want to buy has only fallen by 10%, as an example. So instead of the rungs narrowing, they have actually become wider apart.

3) A few hundred STR's who may have got it right on the timing. Most will not though.

So HPI benefits tens of millions of people..... HPC benefits a few hundred thousand people.

No contest really as to which is better for the vast majority of people in society.

so since for every buyer there is a seller

then lets say that 10,000,000 gain say £10,000 per annmum

that means that the the 100,000 must lose
10,000 x 10,000,000 / 100,000 = £100,000 per annum
you can of course change the actual numbers

methinks your maths and logic is a little wrong

julieq

It's always been tough being young, and buying in the 1980s was hardly easy, yet you'd jump at those prices now if they were offered.

A lot of what's broken about this society is that people expect to be handed everything on a gilded plate - 3 bedroom detached as a first time buyer? - instead of working towards it and making sacrifices to get there. Probably that that was how your neighbours had fought their way onto the property ladder.

Inventing demons and scapegoats, whether they're BTL landlords, bank of mum and dad deposits, immigrants or whatever, masks the fact that it's always been a struggle to buy a house. You can choose to wail and gnash your teeth about that, or you can choose to get on and attempt to solve the problems. There are always options - emigration at the limit - but most people manage eventually.

mewbie_2

julieq wrote: »

It's always been tough being young, and buying in the 1980s was hardly easy, yet you'd jump at those prices now if they were offered.

Well yeah. Do you mean if we earnt what we earn now, and went back in time to 80's prices they would seem cheap? Really good point you made there julie. Do you think the 50's would be even better?

bumpoowee

julieq wrote: »

A lot of what's broken about this society is that people expect to be handed everything on a gilded plate - 3 bedroom detached as a first time buyer?

This is a myth used to justify the current obscene situation, mainly chosen as those affected weren't around to remember the actual scenario. I save 50% of my wage a month and we don't have a car between us (have a company car that incurs a small tax liability only). The most expensive thing we own is a TV bought for £350 and most of our furniture is those 'great price' (ie cheapest) argos things where you have bits of wood and hollow plastic tubes and screw it together.

If we were to buy today the best we could afford is some run down shithole in a crime ridden estate. If you're seriously telling me thats all a couple both earning 40-50% over the national average wage each could afford back the 1980s I would say you probably haven't checked your facts very well.