House Price Crash

westernpromise

pbradley936 wrote:

I must confess that when I started the thread I was concerned about young women having to do too much and that women’s liberation had not really made their day to day lives any easier.

You are spot on there IMHO. If I were a woman I would be spitting in Germaine Greer's face.

It is simple economics really. If the average wage is £100 and households have on average one, usually male, earner, then at 3x salary, houses will cost about £300.

If you wind women up about how empowering and fun it is to be that wage slave on £100 a year, then they'll want to be one themselves, and before very long the average household will have two £100 earners in it and the average house price will then rise to £600.

At this point, women's decision to work ceases to be voluntary and becomes compulsory. If they don't, they can't afford exactly the same roof over their head. This is why the older generation lives in houses while the younger - everyone under about 50 really - lives in shoeboxes.

Most economists understood this would happen perfectly well at the time, although they were dismissed and their opinions discounted by feminists for being the views mostly of men. The net result though is that women of 40 years ago decided they wanted the option to work and have as result forced their grandchildren (yes, us men too) with an economic need to work our whole lives long with no choice in the matter.

The funny thing is they still moan - well, the newspaper-column-writing classes do anyway - about how awful and hard it is to be a working mother, exactly as though this was somehow men's fault. Well, don't look at us; all we did was give you what you said you wanted...and still you ain't happy. The moral of the story is, be careful what you wish for.

Mrs_pbradley936

At the moment the USA government "approved" mortgage figure is $417,000
which is just over £200K Stirling. Anything higher than that is considered to be a "jumbo loan" and costs more. Anyone interested can read about it here

http://www.mortgage101.com/Articles/LoanPrograms.asp?ArticleID=1225&p=mtg101 Our government seems content to allow for "boom and bust" and put it all down to market forces. I for one would like alitle bit more governance on this issue.

RHemmings

ABN wrote:

That was a long post however lost interest at this point.

What are you trying to say?
Are you trying to say that your parents should support you all through your life until such time that they are either to old or have spent all their lifes work on the "yonger" generations at which point you will sell their bodies to medical research to fund you new inproved plasma TV which is your just right to have?

When the hell is the "younger" generation going to learn to stand on their own two feet and accept responsibilty for their own futures in the same way as their parents had to

I don't think the younger generation expects the older generation to help them out, or secure their future. The younger generation just wants a fair chance to take responsibility for their own future, and current house price levels do not allow this.

That the younger generation is trying their best to take responsibility for their own future and make their own way can easily be seen by looking at the recent publicity on the affordability of mortgages. It's frequently reported that it's more often the young who are taking on crippling, unsustainable, debt to try and buy a place for them and possibly their families to live.

If anything it's the older generation that wants a free ride by expecting house prices to be maintained at current unreasonable levels so that they can downsize and enjoy their plasma screens.

Look at an example. An old person owns a house. They bought it for £40,000 in 1980. Over the years, it has appreciated in real terms, not just nominal terms. So that in 1980 pounds, it's now worth £65,000. The owner down-sizes to a house worth £30,000 in 1980 pounds, leaving £35,000 for them to use. Buy plasma screens, holidays, and the like. £10,000 of this money they have to play with came from them going for a cheaper house, but where did the extra £25,000 come from? Effectively, it came from the salary of the younger person who bought the house.

dunstonh

Endowments were purchased most commonly because they were cheaper than repayment mortgages but gave that potential for a lump sum at the end and up to that point, all endowments had paid big surpluses.

Ignoring the point that some were mis-sold, a great number were not and it was consumer greed that led the way - cheaper payments and a lump sum at the end. It went wrong but consumers could in effect sue the advisers.

When it goes wrong with mortgaged buy to lets which work on the same risk and greed principle, who are they going sue then?

RHemmings

westernpromise wrote:

You are spot on there IMHO. If I were a woman I would be spitting in Germaine Greer's face.

It is simple economics really. If the average wage is £100 and households have on average one, usually male, earner, then at 3x salary, houses will cost about £300.

If you wind women up about how empowering and fun it is to be that wage slave on £100 a year, then they'll want to be one themselves, and before very long the average household will have two £100 earners in it and the average house price will then rise to £600.

At this point, women's decision to work ceases to be voluntary and becomes compulsory. If they don't, they can't afford exactly the same roof over their head. This is why the older generation lives in houses while the younger - everyone under about 50 really - lives in shoeboxes.

I partially agree with you. If current house real house prices were to become a permanently high plateau, then your model for women gaining nothing by liberation would fit. But 1996 was a long time after liberation and women had achieved a fairly high level of independence by then. And houses were cheap. The same argument you give would have applied during the last peak in 1989/90. And it didn't last then. If there is a house price crash, then the additional earning power of women will once again mean a higher standard of living.

aderbyshirelad

mystic_trev wrote:

This has to be one of the best posts I've read.

I'm a boomer, altough unlike most of my friends, single...and happy! Most have children who are now either at University or have left home, so are looking towards their Retirements.Many have now bought second homes, most for hoildays and some for Investment. Whenever I bring up the subject on how their children are ever going to afford a house I get one of two responses.

1. Yes it's dreadfull, have another glass of wine.

2. We had to struggle to buy our first home.

I know of none who are bothering to help thier children get "on the ladder" although that's possibly a good thing! Basically they've bought their children up and now couldn't care a toss, just happy to watch the value of their homes go up - how selfish!

:mad: What nonsense. Where are you two living (probably not in your own homes)! Who do you think will eventually benefit from their parents having two properties, or even three, or ten. Hmmm? Could be those poor little kids you're so frightened for. Maybe their parents might eventually decide to sell their second home to help finance their clearly incapable and inept children get on the ladder in later life. Maybe mummy and daddy will blow the inheritance, maybe they'll loose it all investing in a crazy property market boom. Hey, maybe the kids'll just grow up, get a decent job, save up a deposit and buy a house like the hundreds of thousands before them.

Mrs_pbradley936

RHemmings wrote:

I partially agree with you. If current house real house prices were to become a permanently high plateau, then your model for women gaining nothing by liberation would fit. But 1996 was a long time after liberation and women had achieved a fairly high level of independence by then. And houses were cheap. The same argument you give would have applied during the last peak in 1989/90. And it didn't last then. If there is a house price crash, then the additional earning power of women will once again mean a higher standard of living.

Sorry I seem to have muddied the waters here a bit, I started a thread on here called "can somebody please explain" and it was about the 70s. I was taken to task by a couple of young women who thought that I saying that women should not be allowed to borrow. I was not saying that at all and the thread gradually developed until it reached a point about money supply and the effects on housing hence the post I copied earlier. Sorry everyone

RHemmings

aderbyshirelad wrote:

Hey, maybe the kids'll just grow up, get a decent job, save up a deposit and buy a house like the hundreds of thousands before them.

Your arguments would hold if these kids could buy houses for the same prices as generations before them. But you have kids today looking at properties barely adequate or inadequate for the needs selling for six or more times their income. It just doesn't compare to past generations who could buy the same or better properties for three times their income.

It's like if you gave school kids shoes with big spikes sticking up from the soles into their feet, and then said that they could walk to school just like you had to when you were young.

westernpromise

Excellent post RHemmings.

Something else you might have mentioned, as a further consequence of what I shall call "Gordonomics". A lot of the extra debt is being taken out to pay for disposable consumer stuff like cars and holidays, with the cost spread out over a continually-increasing 25 year debt.

I predict that in about 5 or 10 years time we will start to see a new take on the "endowment mis-selling scandal" (which was of course no such thing). This will be the "re-mortgage mis-selling scandal", wherein Trev and Sharon, aged 65, will come weeping onto the telly to moan about how their mortgage is now bigger than it was 35 years ago because of all that remortgaging they were encouraged to do.

This will happen because Trev and Sharon have not yet paid for cars that were scrapped or crushed 20 years previously.

I'm not sure who'll be punished for this; it won't be Trev and Sharon and will probably be others who hold similar products, as happened with endowments. The key thing is to be f e c k less; it works out best that way.

aderbyshirelad

RHemmings wrote:

Your arguments would hold if these kids could buy houses for the same prices as generations before them. But you have kids today looking at properties barely adequate or inadequate for the needs selling for six or more times their income. It just doesn't compare to past generations who could buy the same or better properties for three times their income.

It's like if you gave school kids shoes with big spikes sticking up from the soles into their feet, and then said that they could walk to school just like you had to when you were young.

I AM still young!