Is property in a bubble?

economic

ukcarper wrote: »

I'm not but it's not a cure to the problem of high house prices in certain areas.

You can ignore all the figures about house prices in relation to earning if you want but for the majority their earnings are the limiting factor.

Just to make things clear I don't think prices are in a bubble in fact I don't see London prices falling significantly if at all and I don't see anything practical that can be done to alter the situation. Although it might be possible to improve things outside London but to be honest I don't see enough being done.

Prices in London are already starting to fall. I sold my flat in kilburn in 2016 for 585k. I just saw a flat asking for 550k in the same location but much bigger and better flat. Prices are clearly falling so those who could not find or afford to buy now may have a good opportunity to do so soon. I am glad i sold my flat as i made bigger returns in stocks and the whole BTL tax rules are seriously not favourable for a new landord.

That said not everyone will or can buy and there's nothing wrong with that. Why should immigrants be able to buy? Why should poor people be able to buy? Why should children of parents who squandered wealth be able to buy?

economic

ukcarper wrote: »

I think you need to open your eyes the majority of people's wealth is in their property and is tied up until they die or downsize. You are GreatApe live in your own world and are blind to the problems facing many young people.

I have my own property and in time it will go to my children but they are already in their late 30s and early 40s.

I'm not purposefully trying to offend you but:

Both my parents came to this country as immigrants and had next to nothing in wealth. They also have no degrees/prof qualifications and have simply worked all their lives over 4-5 decades - my mum in an admin role all her working life and my dad working up to a managerial position with earnings of max 45k gross at the peak. They have saved and built up a decent nest egg. They are not even that financially literate - do not understand investments like BTL or shares. They have pretty much saved everything they earnt in cash (except some money they invested at the height of the dotcom bubble after speaking to a FA).

For all this they managed to build up savings in excess of a £1m. This excludes their own home they live in worth around £700k.

Now the question becomes why YOU only have little to pass onto your children when my parents managed to build up a decent amount of wealth much of which will be passed onto me and my sibling.

GreatApe

ukcarper wrote: »

You are GreatApe live in your own world and are blind to the problems facing many young people..

Most Young peoples financial problems are only temporary
And of course young people are the ones that have the most financial problems they have the fewest years of work progress and savings.

Like I keep saying between 2000-2010 I would have been signing from the same hymn sheet. I was young and poor but I wasn't really aware that I was poor I thought I earned average wages but I was in fact earning less than median male full time earnings. Like most people though I progressed in work and experience and life got easier

ukcarper

economic wrote: »

I'm not purposefully trying to offend you but:

Both my parents came to this country as immigrants and had next to nothing in wealth. They also have no degrees/prof qualifications and have simply worked all their lives over 4-5 decades - my mum in an admin role all her working life and my dad working up to a managerial position with earnings of max 45k gross at the peak. They have saved and built up a decent nest egg. They are not even that financially literate - do not understand investments like BTL or shares. They have pretty much saved everything they earnt in cash (except some money they invested at the height of the dotcom bubble after speaking to a FA).

For all this they managed to build up savings in excess of a £1m. This excludes their own home they live in worth around £700k.

Now the question becomes why YOU only have little to pass onto your children when my parents managed to build up a decent amount of wealth much of which will be passed onto me and my sibling.

They are the exception and obviously done well, I'm happy with how I've done and have done better than many people. Not every body can be millionaires and you shouldn't have to be one to have a reasonable life.

ukcarper

GreatApe wrote: »

Most Young peoples financial problems are only temporary
And of course young people are the ones that have the most financial problems they have the fewest years of work progress and savings.

Like I keep saying between 2000-2010 I would have been signing from the same hymn sheet. I was young and poor but I wasn't really aware that I was poor I thought I earned average wages but I was in fact earning less than median male full time earnings. Like most people though I progressed in work and experience and life got easier

No you say that but things have changed. .

GreatApe

ukcarper wrote: »

No you say that but things have changed..

Over the late decade ?

What evidence do you have for this?
Wages are not much changed in real terms
Average UK house prices are not much changed in real terms
Wealth is actually higher. Inheritences and gifting too

ukcarper

GreatApe wrote: »

Over the late decade ?

What evidence do you have for this?
Wages are not much changed in real terms
Average UK house prices are not much changed in real terms
Wealth is actually higher. Inheritences and gifting too

Wages are now 15% higher than they were in 2008 house prices in south east are up 60%.

ONS and land registry figures

GreatApe

ukcarper wrote: »

Wages are now 15% higher than they were in 2008 house prices in south east are up 60%.

ONS and land registry figures

Uk
Jan 2008 £185,782
Jan 2017 £226,756
Up 22%

SE
Jan 2008. £235,300
Jan 2018. £322,269
Up 37%

BOE inflation calculator 2007-2017 = up 32%

London is indeed up 60% but that is to be expected as for the last 20 years London has been growing more than rUK so it's house prices will grow more than the UK. So yes London up about 30% more than inflation

ukcarper

GreatApe wrote: »

Uk
Jan 2008 £185,782
Jan 2017 £226,756
Up 22%

SE
Jan 2008. £235,300
Jan 2018. £322,269
Up 37%


BOE inflation calculator 2007-2017 = up 32%

London is indeed up 60% but that is to be expected as for the last 20 years London has been growing more than rUK so it's house prices will grow more than the UK. So yes London up about 30% more than inflation

Jan 2008 near enough all time high until 2013

Median full time earnings 2008 £479
Median full time earnings 2017 £550

Increase 15%

GreatApe

ukcarper wrote: »

Jan 2008 near enough all time high until 2013

Median full time earnings 2008 £479
Median full time earnings 2017 £550

Increase 15%

I thought you were wrong but having checked the figures are correct

Something doesn't add up. I don't believe we've have had 30% inflation (price increases) and only 15% pay increases

It may have something to do with the business cycle or perhaps something to do with the large fall in sterling during that time. I'm missing something here might look into it next week.