How long can FTB-s afford to wait?

HAMISH_MCTAVISH

macaque wrote: »

You use the word crash but others would call it an overdue correction. Without this, the wealth creating side of the economy will continue to decline. Manufacturing companies now have to pay employees £10k a year just to cover housing costs. This, combined with high taxes, drives UK companies to outsource as much as possible.

Nonsense.

What is the obsession you have with manufacturing?

Mass manufacturing of cheap tat is dead in this country, and will never return. And good riddance I say.

And don't you see a logical inconsistency with calling for housing to be cheaper, just so that companies can pay less in wages? Not exactly what most bears had in mind, I'll wager.

Now putting aside your assertion that companies could pay less if housing were cheaper (which is blatantly false, as we all know governments would just raise taxes to compensate), at the end of the day it doesn't matter how cheap houses are, you still can't compete with Indian or Chinese workers on $100 a month.

£50 - 100 billion a year is handed over by home owners to lenders in the form of interest payments. The lenders use this money to take large salaries and employ armies of people who spend their days forcing more debt onto people pay hundreds of thousands of people ordinary wages, buy goods and services from the economy, return profits to shareholders through dividends (like our pension funds), and pay the interest on millions of peoples savings.. This is not a healthy or sustainable exactly how you provide a healthy and sustainable model for an economy.

Fixed that for you.

I cannot see how we can get real growth without a massive house price correction recovery.

Fixed that for you too.

julieq

Bear in mind that many of Portugal's problems are due to their not having adjusted to the shift of low wage work West to East, without a housing boom being involved. Companies have a fiduciary responsibility to shareholders which means they'll always be looking the cheapest way of creating products. As I've said before though, if you do a value chain analysis, very little is added by basic manufacturing and it's quite right we're moving away from it.

An attachment to manufacturing industry is essentially a romantic attachment to the past rather than anything practical. The idea that "making things" is somehow more valuable than "doing things" doesn't really stand scrutiny.

The other FTB factor is obviously the rising rate of cash purchase for houses - 40% from today's figures I believe. That means there is considerable competition for owner occupiers, and you'd imagine a good chunk of that is investment. As I've been saying, when you have competition at that level for the housing stock, you don't need owner occupier first time buyers to sustain prices.

It's not really a question of what is right or wrong or good or bad. You don't put a lid on a market by appealing to its sense of fair play and decency. What is happening with housing in this country is a direct consequence of not building enough of it.

geneer

julieq wrote: »

Bear in mind that many of Portugal's problems are due to their not having adjusted to the shift of low wage work West to East, without a housing boom being involved. Companies have a fiduciary responsibility to shareholders which means they'll always be looking the cheapest way of creating products. As I've said before though, if you do a value chain analysis, very little is added by basic manufacturing and it's quite right we're moving away from it.

An attachment to manufacturing industry is essentially a romantic attachment to the past rather than anything practical. The idea that "making things" is somehow more valuable than "doing things" doesn't really stand scrutiny.

The other FTB factor is obviously the rising rate of cash purchase for houses - 40% from today's figures I believe. That means there is considerable competition for owner occupiers, and you'd imagine a good chunk of that is investment. As I've been saying, when you have competition at that level for the housing stock, you don't need owner occupier first time buyers to sustain prices.

Riiiiiiiiiight. Again with the painful old falling demand increase house prices argument.


And yet house prices fell.

geneer

HAMISH_MCTAVISH wrote: »

Nonsense.

What is the obsession you have with manufacturing?

Mass manufacturing of cheap tat is dead in this country, and will never return. And good riddance I say.

And don't you see a logical inconsistency with calling for housing to be cheaper, just so that companies can pay less in wages? Not exactly what most bears had in mind, I'll wager.

Now putting aside your assertion that companies could pay less if housing were cheaper (which is blatantly false, as we all know governments would just raise taxes to compensate), at the end of the day it doesn't matter how cheap houses are, you still can't compete with Indian or Chinese workers on $100 a month.




Fixed that for you.



Fixed that for you too.

Kudos for not simply ghosting out for once.
Care to respond to Grahams comments then?

Graham_Devon

julieq wrote: »

The other FTB factor is obviously the rising rate of cash purchase for houses - 40% from today's figures I believe. That means there is considerable competition for owner occupiers, and you'd imagine a good chunk of that is investment. As I've been saying, when you have competition at that level for the housing stock, you don't need owner occupier first time buyers to sustain prices..

There has always been cash purchases. It's just higher now with the lower level of mortgages being taken.

Cash purchases are not actually rising, per se, just rising against mortgaged purchases.

julieq

geneer wrote: »

Riiiiiiiiiight. Again with the painful old falling demand increase house prices argument.


And yet house prices fell.

Not enough to rescue your decision sadly

Anyway of course prices can fall if no-one is buying at a time when confidence is zero. They bounced back quite close to the peak in absolute terms despite a very uncertain economic outlook and mortgage rationing which demonstrates the underlying demand. So if you're still holding out for a big further fall you need something much worse to happen than we had.

But obviously if you can shout me down aggressively enough everything will change and all the pain you caused yourself will disappear. You do believe in fairies, don't you?:rotfl:

julieq

Graham_Devon wrote: »

There has always been cash purchases. It's just higher now with the lower level of mortgages being taken.

Cash purchases are not actually rising, per se, just rising against mortgaged purchases.

What you're saying there Graham is that house prices are attractive enough so that cash buyers remain in the market, but the relative proportions are rising because those needing mortgages are excluded. Which is pretty much agreeing with Hamish. When finance is available, more first time buyers will use it and the relative proportions of cash buyers and mortgaged buyers will correct.

It doesn't alter the fact that cash buyers are in the market at the prices the market is sustaining. That ought to tell you that the investment potential is attractive, but clearly they are competing with the first time buyers who are able to compete and that will strengthen prices.

replumbed

julieq wrote: »

As I've said before though, if you do a value chain analysis, very little is added by basic manufacturing and it's quite right we're moving away from it.

An attachment to manufacturing industry is essentially a romantic attachment to the past rather than anything practical. The idea that "making things" is somehow more valuable than "doing things" doesn't really stand scrutiny.

What are you on about now? Basic manufacturing?
What about high technology goods?

Vorsprung durch Technik.

Silly bulls know nothing about economics.

HAMISH_MCTAVISH

geneer wrote: »

Care to respond to Grahams comments then?

Which ones????

Percy1983

I do agree the constricted lending right now is more than I would like, but it is needed to correct the years of excess.

Shame I don't think I typed anywhere in here, but the day 15% VAT was announced my first comment was "when is it going up to 20% to make up for it?"

When you compare to previous decades you forget one big factor which you keep pointing out yourself "we need more houses now", if there where more than enough houses then I would say go for 100% mortgages as there is enough for everybody, but as you keep pointing out houses are in short supply, so while they are in short supply why not constrict those able to buy to those who have proven they are financially competent?

By all means I agree they need to get building more, but right now the system works for the current situation.