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Debate House Prices
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UK "one of the wealthiest countries on the planet & getting wealthier by the day"
Comments
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Jesus wept, I've heard it all now...Graham_Devon wrote: »I find you often contradict yourself.0 -
Graham_Devon wrote: »That's lovely, but we were talking about increasing how much income we spend and how people can spend more of their income if their house goes up in value......
No. YOU are talking about spending more income when their house goes up....
You are making it up as it moves along.Graham_Devon wrote: ».....All seems a bit made up as it moves along.......
There! You took the words out of my mouth...
I think most of us are talking about the proven tendency for spending to go up as house prices go up. A lot of it is the 'feel good' factor or confidence. Some of it, also, is the syndrome of "look... house prices going up... maybe we'd better upsize now." or "Let's get on the ladder before it goes out of our reach..."
Correct me if I'm wrong, but this extra outlay on houses, mortgage interest, EA fees, solicitors, new carpets, curtains falls within the definition of 'spending' or 'GDP'.
My own car is getting long in the tooth. 8 years old. I planned to replace at 10 years, but my "car fund" is at a level that allows me to replace it round about Jan 2014. The car would last another 2 years easily, or even 5 years if I wanted.
But ask yourself what a 10% increase in my house value [which would actually pay for two new cars] will do to my thinking, as opposed to a 10% drop. It's not directly to do with my increased (or decreased) house equity, but almost entirely due to confidence and feeling more 'wealthy'. My spending [as defined by the Loughton Monkey accounting method] doesn't change one iota, since I will continue to allocate exactly the same (budgeted) amount into my 'car fund' whether I replace the car or not. But my spending [as defined by traditional economics] will go up considerably if I buy in January.0 -
Graham_Devon wrote: »Was trying to get a feeler of what you actually mean. As so far all we know is that they can spend more of their income, so long as they fall into your "requirements" and don't spend too much. They should take risk, as that's good, but not be careless.
All seems a bit made up as it moves along.
It's not just that people can spend more of their income when they feel richer but they really do spend more. Not quite sure why you need a formalised budget or complete risk analysis. I have no requirements as to how this achieved but simply commenting that it happens.
I save in a sipp. Wealth is being built but I can't access that wealth for decades. However, if wealth is built quicker than I planned I may take the view that I can reduce my saving ratio and consume more now or keep going as I am. I might get this wrong and end up too little money or more than I can spend - that's by the by - wealth creation allows the luxury of choice.
Housing wealth is the same as a pension and the same as cash. They differ only in liquidity but, at some point, they'll be accessed and spent. What's the point otherwise?
If you want to dispute this basic premise that's fine but demanding a budget showing how £50 per month can be spent if a house goes up by £10k is just an attempt to open the doors to the muddle zone.0 -
HAMISH_MCTAVISH wrote: ».....The average resident in Laughton is vastly more affluent than the average resident in Loughborough.....
I would like to see proof of this. Might be a close call...
.Laughton is a village and civil parish in the Wealden District of East Sussex. Population (2007) 585.
Maybe you should have used the example of Loughton where we are all as rich as Croesus [well actually a bit richer thanks to substantial HPI since 547 BC]
Had Laughton not been a real place, I might have assumed you were trying to make a deliberate 'play on words' in order to 'tease' my good self....
But you would never do that, would you Hamish?0 -
Loughton_Monkey wrote:No. YOU are talking about spending more income when their house goes up....
You are making it up as it moves along.
Indeed. I don't want to get in the way of yet another one of your rather obsessive posts about myself (every 3rd post of yours seems to be about me Loughton? But you hardly ever get a reply!), but you are so wrong on this one it needs highlighting...
Page 1....where all this stems from...I think it's fairly well established that if someone's net worth increases they spend more. Yes they can't spend housing wealth but they can spend a bigger % of income instead.0 -
Graham_Devon wrote: »
Page 1....where all this stems from...
Are you disputing the principle that people are disposed to spending more of their income the richer they feel?
If yes then just say so. If not then continue the forumonics.0 -
Loughton_Monkey wrote: »I would like to see proof of this. Might be a close call...
.
Maybe you should have used the example of Loughton where we are all as rich as Croesus [well actually a bit richer thanks to substantial HPI since 547 BC]
Had Laughton not been a real place, I might have assumed you were trying to make a deliberate 'play on words' in order to 'tease' my good self....
But you would never do that, would you Hamish?
Damn speeling mistooks.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Not however much of a problem here in the UK. Quite the reverse if anything. The UK savings ratio managed to hit 0% in 2007.
And then promptly shot up to an equally unhealthy high of nearly 9%.
Savings ratios of between 2% and 5% are reasonable, allowing for decent savings AND economic growth.
That the savings ratio has reduced to within this range is a very good thing for the economy.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Damn speeling mistooks.
I know the feeling.
How are the huose rpices keeping up in Aberdovey by the way?0
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