How low will property go?

ukcarper

mrlegend123 wrote: »

Ukcarper your a baby boomer..... Sorry I know it's not your fault but it is alot harder for the younger generation as they are saddled with more debt. I do not directly blame baby boomers but past central bankers and governments.

The debt is university fees I didn't go to university had zero change of going, if you are going to send 50% of population to university it becomes unaffordable by the way income tax was 33% back then so with NI about 40% compared to 20% +11% + 9% so not much difference.

System

Income tax should be increased by 5% across all bands. There will be another pension crisis in years to come when the government realises that the younger generation havnt been paying into a pension scheme.....

wotsthat

mrlegend123 wrote: »

Income tax should be increased by 5% across all bands. There will be another pension crisis in years to come when the government realises that the younger generation havnt been paying into a pension scheme.....

I'm taking a wild guess here but based on your posts from today you privately rent, have little income, not much in the way of savings, no pension, in your twenties and have an interest in Russia Today and Bitcoin.

Nothing wrong with any of that but aren't you just talking your book?

System

Totally wrong. I rent a 3 bedroom married quarter (£200 for rent and council tax per month) at my base in the SE. I earn over 40k a year not including additional pay. I have no debt and very grateful for the MOD in funding my two engineering degrees. I am in my late 20s with 11 years remaining on forces pension. I also pay into private pensions etc

Good guess tho - thumbs up

p1212

ukcarper wrote: »

It's alway been higher in London I couldn't afford to buy there in the 70s. The problem with London is to many people not enough property.

I suggest you check Nationwide data. Check the first time buyer House price earnings ratio for London and you will see that up until around 2000 the ratio was 4.3x, even in 2009-2013 it was 6-7x and the current ratio of 10x is unprecedented in history and there is no proof that it is sustainable or that it would be a new standard.

http://www.nationwide.co.uk/~/media/MainSite/documents/about/house-price-index/downloads/ftb-hper.xls

In my opinion there are enough properties in London, I mean I don't see families living on the streets because lack of properties + there are hundreds of properties for sale and rent on rightmove in any area.

The problem is that high price locks out all ordinary people - their source of money comes from their stagnating wages, while speculative money is created from nothing at a rate of 20% per year in London.

At this rate one year capital gain can be reinvested as a deposit for a second house. In the second year you have two houses gaining 20% so then two new houses can be bought. Next year you can buy four houses etc...

The process above creates exponentially increasing speculative money and demand from nothing, which is the reason for these obscene price increases.

On a wider scale the whole problem is built around the basic need of living somewhere. There are limited amount of properties that can satisfy this need.

Speculative money and ordinary people fight for these properties. Speculative money wants to own the properties, so people have to rent it from them if they want to satisfy their basic needs, which they have to do. Obviously people do not want to do this and they would rather own the properties themselves.

Theoretically a government should help ordinary people (and also there is a moral side of things like making money on someone else's basic needs) but 25% of the UK GDP is the financial and construction sector and both of them heavily benefits form the exponential expansion of speculative demand and higher property prices.

Osborne had the golden opportunity to keep speculative money on a short lead and in 2011 no one really thought he would be bold enough to let it loose again. That's why people said in 2011 that don't buy, cause everyone thought we'd learned the lesson and we wouldn't do that again.

But that would meant having a "recession" until the real economy picks up, which seemed not to be happening, so Osborne went the other way and the rest is history, now we have a way bigger bubble than in 2008.

The reason for not building cheap houses for people to own or at least easing up planning is they actually didn't want ordinary people to be able to buy their properties en mass, cause then there would be no need for renting from speculative money and the system described above would collapse causing a "recession" which they wanted to avoid like plague.

On the positive side by now even Osborne realized things went a bit too far and tried to rebalance things, ironically he has not given the chance.

So now we are here with a new government and a bubble approx double the size of the one in 2008 and with even more speculative money holding up GDP numbers. And a big question mark, what the new government will do after firing Osborne spectacularly.

This years autumn budget will be the most important budget in the last decade.

System

We talk common sense. Watch out p1212, the crystal ball poster wotsthat might start guessing your background....lol

I think wotsthat works on a farm feeding pigs all day long.........pigs are flying

cells

p1212 wrote: »

I suggest you check Nationwide data. Check the first time buyer House price earnings ratio for London and you will see that up until around 2000 the ratio was 4.3x, even in 2009-2013 it was 6-7x and the current ratio of 10x is unprecedented in history and there is no proof that it is sustainable or that it would be a new standard.

http://www.nationwide.co.uk/~/media/MainSite/documents/about/house-price-index/downloads/ftb-hper.xls

In my opinion there are enough properties in London, I mean I don't see families living on the streets because lack of properties + there are hundreds of properties for sale and rent on rightmove in any area.

The problem is that high price locks out all ordinary people - their source of money comes from their stagnating wages, while speculative money is created from nothing at a rate of 20% per year in London.

At this rate one year capital gain can be reinvested as a deposit for a second house. In the second year you have two houses gaining 20% so then two new houses can be bought. Next year you can buy four houses etc...

The process above creates exponentially increasing speculative money and demand from nothing, which is the reason for these obscene price increases.

On a wider scale the whole problem is built around the basic need of living somewhere. There are limited amount of properties that can satisfy this need.

Speculative money and ordinary people fight for these properties. Speculative money wants to own the properties, so people have to rent it from them if they want to satisfy their basic needs, which they have to do. Obviously people do not want to do this and they would rather own the properties themselves.

Theoretically a government should help ordinary people (and also there is a moral side of things like making money on someone else's basic needs) but 25% of the UK GDP is the financial and construction sector and both of them heavily benefits form the exponential expansion of speculative demand and higher property prices.

Osborne had the golden opportunity to keep speculative money on a short lead and in 2011 no one really thought he would be bold enough to let it loose again. That's why people said in 2011 that don't buy, cause everyone thought we'd learned the lesson and we wouldn't do that again.

But that would meant having a "recession" until the real economy picks up, which seemed not to be happening, so Osborne went the other way and the rest is history, now we have a way bigger bubble than in 2008.

The reason for not building cheap houses for people to own or at least easing up planning is they actually didn't want ordinary people to be able to buy their properties en mass, cause then there would be no need for renting from speculative money and the system described above would collapse causing a "recession" which they wanted to avoid like plague.

On the positive side by now even Osborne realized things went a bit too far and tried to rebalance things, ironically he has not given the chance.

So now we are here with a new government and a bubble approx double the size of the one in 2008 and with even more speculative money holding up GDP numbers. And a big question mark, what the new government will do after firing Osborne spectacularly.

This years autumn budget will be the most important budget in the last decade.

inheritances and gifts explain a lot of things when you look into the data. Somewhere around £6 trillion is left per generation. Life doesn't look so hard for the next generation when you factor in this £6 trillion they will be gifted.

in its most basic form, the locals should have little housing problem as it only takes one generation to buy a house and substituent generations only need to pay for upkeep

even the social households 'pass down' their social homes by putting on children or grand children onto the tenancy so when they die the younger generation 'inherits' it


also this is a London problem, the north east, the north west, the west and east midlands, yorkshire, wales, northern ireland, scotland are all still very affordable. The east and south west are also generally fine. Its only really London with its ~13% of the population and housing stock that is expensive and even there there are good reasons for it

wotsthat

mrlegend123 wrote: »

Totally wrong. I rent a 3 bedroom married quarter (£200 for rent and council tax per month) at my base in the SE. I earn over 40k a year not including additional pay. I have no debt and very grateful for the MOD in funding my two engineering degrees. I am in my late 20s with 11 years remaining on forces pension. I also pay into private pensions etc

Good guess tho - thumbs up

You must just about be able to buy a place cash by now. Nice one.

System

If this housing crisis continues, I will become a LL in the NE. If you can't beat them, join them. It has hurt me saying that because I am not a direct fan of LLs. I will have to get a tenent to pay my mortgage.

ukcarper

p1212 wrote: »

I suggest you check Nationwide data. Check the first time buyer House price earnings ratio for London and you will see that up until around 2000 the ratio was 4.3x, even in 2009-2013 it was 6-7x and the current ratio of 10x is unprecedented in history and there is no proof that it is sustainable or that it would be a new standard.

http://www.nationwide.co.uk/~/media/MainSite/documents/about/house-price-index/downloads/ftb-hper.xls

In my opinion there are enough properties in London, I mean I don't see families living on the streets because lack of properties + there are hundreds of properties for sale and rent on rightmove in any area.

The problem is that high price locks out all ordinary people - their source of money comes from their stagnating wages, while speculative money is created from nothing at a rate of 20% per year in London.

At this rate one year capital gain can be reinvested as a deposit for a second house. In the second year you have two houses gaining 20% so then two new houses can be bought. Next year you can buy four houses etc...

The process above creates exponentially increasing speculative money and demand from nothing, which is the reason for these obscene price increases.

On a wider scale the whole problem is built around the basic need of living somewhere. There are limited amount of properties that can satisfy this need.

Speculative money and ordinary people fight for these properties. Speculative money wants to own the properties, so people have to rent it from them if they want to satisfy their basic needs, which they have to do. Obviously people do not want to do this and they would rather own the properties themselves.

Theoretically a government should help ordinary people (and also there is a moral side of things like making money on someone else's basic needs) but 25% of the UK GDP is the financial and construction sector and both of them heavily benefits form the exponential expansion of speculative demand and higher property prices.

Osborne had the golden opportunity to keep speculative money on a short lead and in 2011 no one really thought he would be bold enough to let it loose again. That's why people said in 2011 that don't buy, cause everyone thought we'd learned the lesson and we wouldn't do that again.

But that would meant having a "recession" until the real economy picks up, which seemed not to be happening, so Osborne went the other way and the rest is history, now we have a way bigger bubble than in 2008.

The reason for not building cheap houses for people to own or at least easing up planning is they actually didn't want ordinary people to be able to buy their properties en mass, cause then there would be no need for renting from speculative money and the system described above would collapse causing a "recession" which they wanted to avoid like plague.

On the positive side by now even Osborne realized things went a bit too far and tried to rebalance things, ironically he has not given the chance.

So now we are here with a new government and a bubble approx double the size of the one in 2008 and with even more speculative money holding up GDP numbers. And a big question mark, what the new government will do after firing Osborne spectacularly.

This years autumn budget will be the most important budget in the last decade.

if you look back you will see that London has always been higher than national average
Varying between 30% and 60% more apart from 90s