"Confirmation Bias" among generation who did well from house prices

Graham_Devon

The title is part of a much bigger article looking at whether politicians could ever put a pledge out to reduce house prices.

It looks back a couple of decades and looks at how politicians pledged to do just that, however, today it would be political suicide.

The piece regarding confirmation bias though struck me as it's something that's endlessly discussed on here. i.e. "you just have to do the same as I/We did and you will have it all later too".

Instead, there's a kind of "confirmation bias" among the generation that did well out of the surge in property prices, Dorling believes.

"There's a myth that everyone will end up benefitting from this. Because that happened to one group, the old middle class are telling their kids that will also happen to you one day." This is further enhanced by the fact that in the last parliament one in four MPs was a landlord.

In fact, he says, the big winners of policies aimed at helping first-time buyers get on the ladder are those who already own property. "Your house literally isn't worth all that money if some naive young couple won't buy it."

I'd agree with Professor Dorling! There does appear to be an attitude of "just work like we did and you will get the same". It's all over these forums.

These people are also much more likely to appose new building in their areas. Described as "insiders" whose influence on the planning system (because they own their own home and are therefore in the area ready to protest) prevents the "outsiders" from a secure place to live. Often the "outsiders" are their own children.

Huge amount in the article itself though, well worth a read.

http://www.bbc.co.uk/news/magazine-32065625

caronoel

You have been banging on on this forum for almost a decade now about falling house prices, and yet house prices continue their slow but steady inexorable rise upwards (excluding 18 months in 2008/09).



Do you never feel embarrassed about being so consistently wrong?

theEnd

I disagree. I don't think many of the older generation think like that.
Most are well aware of the gains they've made and the lucky generation they had. They realise their children can't have the same.

Similarly, I, and most of my generation (mid-late 30s) realise we had much better work opportunities than the generation currently graduating.

caronoel

theEnd wrote: »

I disagree. I don't think many of the older generation think like that.
Most are well aware of the gains they've made and the lucky generation they had. They realise their children can't have the same.

Similarly, I, and most of my generation (mid-late 30s) realise we had much better work opportunities than the generation currently graduating.

Very valid points - but why spoil a good whinge with the truth?

The key point that Graham, and his increasingly small band of doomsters, forget is that these generational gains will eventually be passed onto those in their 20s and 30s today.

No one can take it with them, you know!

Graham_Devon

caronoel wrote: »

The key point that Graham, and his increasingly small band of doomsters, forget is that these generational gains will eventually be passed onto those in their 20s and 30s today.

You realise thats precisely what the thread is about?

Forget? It's the point of the thread. Confirmation bias that X Y and Z will happen, and straight away you have gone into attack mode and displayed the confirmation bias the thread is about.

princeofpounds

Do you never feel embarrassed about being so consistently wrong?

His post isn't about prediction. It's about the rights and wrongs of allowing house prices to rise.


In the context you mention, I would have thought that is a very relevant topic.

stator

caronoel wrote: »

The key point that Graham, and his increasingly small band of doomsters, forget is that these generational gains will eventually be passed onto those in their 20s and 30s today.

I'm surprised that you think it's a good thing that a small proportion of people will inherit significant amounts of wealth which they did nothing to earn. With increases in care home costs I think a lot less will be passed down than some people assume. Inheritence also comes at the wrong time now. With the increase in life expectancy, those who do inherit money probably won't get it until they are past 60. Which is too late to help with the cost of raising a family or buying a family home, as the family are gone. It's too late to help pay off the student debts, as they are gone too. All they will do with it is sit on it and hoard wealth like the baby boomers did. (Anyone else think it's a funny coincidence that student loans are written off at the average age of a Conservative voter?)

princeofpounds

With increases in care home costs I think a lot less will be passed down than some people assume.

Yes, the younger generations will inherit the housing stock.


However, in the interim, the value transfer made to the owners of the scarce housing capital, in interest and in rent, will be used for consumption purposes (healthcare, cruises, sherry - whatever the boomer equivalent of ipods, beer and laptops is) rather than producing useful investment to raise future living standards.


So it's not all that reassuring that we get the same houses in the end - it would be like me reassuring you that if I take half your interest payments from your bank account to support myself, it's ok because you'll still have the same amount of money at the end of the arrangement.

wotsthat

Graham_Devon wrote: »

I'd agree with Professor Dorling! There does appear to be an attitude of "just work like we did and you will get the same". It's all over these forums.

That seems to work both ways i.e. my dad's a postman and bought when he was 21 so why shouldn't I get the same?

It's still my thinking that buying at today's prices will lead to a lower total cost of housing provision. There's probably a bias because it worked out so well for me but still based on maths and assumptions. It's a prediction - if Prof Dorling is suggesting something different and people think he's right maybe they're suffering from confirmation bias too.

PasturesNew

If the current home owners have to sell the houses for care home fees -and- if the young can't afford to buy them, who can?

The rich can .... so the rich will hoover up the current houses, the money will go to meet care home fees. Nobody will be wealthier except the already wealthy.

There'll always be somebody that can afford to buy houses .... at the moment it's usually those who already have at least one house.

caronoel

Poor old Graham

10 years of banging on about how unfair life is must get very tiring

It certainly is for those of us who read your incessant whining