How low will property go?

westernpromise

I reckon the euro is going to pop, possibly very soon. There is a German general election coming up and post-Brexit there will be one country left in Europe with any money where there used to be two. I think to be long sterling short the euro is probably a good trade at the moment.

cells

There is a risk, no sure how big a risk, that the Germans will have a difficult time in the second half of the next decade 2025 onward

Germany is a big car factory. By value it exports more vehicles than China and the USA combined. It earns some $300 billion in foreign exchange selling its vehicles and vehicle parts abroad. That makes them more reliant on vehicles and their parts than the UK economy is on banking and finance

If the american computer guys crack self drive tech and start manufacturing high end vehicles they might take important share from the Germans.

With Tesla planning to ramp up to 1 million vehicles a year within 5 years and with apple and google also looking into self drive EVs that sector looks like its going to change a lot in the next 10 years

CherylBartlett

Hi there, I also want to know that.

lisyloo

cells wrote: »

how affordable does London look for the young when you consider they will be inheriting £8.8 trillion?

How does it help most of them if they don't get it until they are In their 50's 60s or 70s?

Are you saying that they run up big debts in the hope that it will get paid off eventually? I don't think mortgages work on that basis so your 8.8 is irrelevant to what young people can borrow.
Or are you saying a proportion will inherit early?
Or what?

Obviously on individual cases no-one can rely on it. There are complications like estrangement, toy boys, new partners with second families, nursing homes, dimensia etc.

mwpt

cells wrote: »

There is a risk, no sure how big a risk, that the Germans will have a difficult time in the second half of the next decade 2025 onward

Germany is a big car factory. By value it exports more vehicles than China and the USA combined. It earns some $300 billion in foreign exchange selling its vehicles and vehicle parts abroad. That makes them more reliant on vehicles and their parts than the UK economy is on banking and finance

If the american computer guys crack self drive tech and start manufacturing high end vehicles they might take important share from the Germans.

With Tesla planning to ramp up to 1 million vehicles a year within 5 years and with apple and google also looking into self drive EVs that sector looks like its going to change a lot in the next 10 years

There is a reason German's sell a lot of cars, because people want to buy German cars, because they consider them high quality. Self driving technology is orthogonal to making a good car. There will be nothing to stop the German's who make good cars, letting someone who makes good AI, make the AI, then integrate it with their cars.

sann420

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.

This is a blindingly good post that pretty much sums up the whole situation.... Its mostly speculation rather than actual shortage.

I will add an example to it as I went to personally view this property for buying a few months ago ->
http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=52573843&sale=48127284&country=england

Some one bought this house in a very shabby state for 280k in 2014. They never even bothered to renovate it or anything. Just kept it as is unoccupied for about a year and half and then sold it on for over a 100k profit. When I went for a viewing around Jan 2016 the asking was 380k and I thought at the time no way its worth more than 300k as it needs about 50k of work to make it liveable. Low and behold it eventually went for 395k possibly to another speculator because crossrail is coming soon to this area :P

The funny thing is that I as a potential buyer pretty much earn the same money as I did in 2012. So if I was saving for a deposit during this time then over the course of 2 years this property and other similar ones have gone out of my reach for no good reason. And its not the Chinese or Russians buying these properties. Its all local speculators who are themselves taking on hefty mortgages to gamble on increasing prices. When it pays off its awesome but if prices go down then they will be in a lot of trouble I suspect.

Another viewing I did nearby ... there was a BTL couple that had come from Sussex to view that property just because they had heard cross rail was coming soon to Ilford lol.

p1212

cells wrote: »

There is a risk, no sure how big a risk, that the Germans will have a difficult time in the second half of the next decade 2025 onward

Germany is a big car factory. By value it exports more vehicles than China and the USA combined. It earns some $300 billion in foreign exchange selling its vehicles and vehicle parts abroad. That makes them more reliant on vehicles and their parts than the UK economy is on banking and finance

If the american computer guys crack self drive tech and start manufacturing high end vehicles they might take important share from the Germans.

With Tesla planning to ramp up to 1 million vehicles a year within 5 years and with apple and google also looking into self drive EVs that sector looks like its going to change a lot in the next 10 years

German car manufacturers will do exactly the same as they did with electric cars, they will let someone else (Tesla in this case) invest huge amounts into R&D and marketing the new product to people and when people are ready for electric cars and tech is more or less done they just make a way better electric car with a minimal investment.

Tesla is only a startup, a hype, a tool to get the money from the investors and still makes losses.

If the american tech guys crack self drive tech then car makers will just recruit some of their team for the necessary amount of money + promotion.

Also the whole self-drive thing is like google voice control, the tech is there, they want people to use it, but people don't like it, cause it is more natural to type in something with full control over the whole process, rather than give voice instructions with less effort, but without zero control over what happens on the computers side.

That is the most important thing, people want to keep control.

The same will happen with self drive cars, the whole driving process is about avoiding potholes, overtake cyclists, you see a gap and you switch lanes, going through the yellow etc... whenever YOU want. Yes, you would need to make less effort in a self-drive car, but it is going to be similarly frustrating not to have any control over the process.

To watch the car taking that bend at half the speed YOU wanted. It will be like running in water, extremely frustrating.

Also they are telling us we would do things in the self drive car like reading, washing our teeth etc..., well just try to read in a car, you will get sick in under 1 min. Also who the hell wants to wash their teeth in a car? That's why we have bathrooms and the luxury is actually not washing your teeth in your car, but having the time to do it at home.

mwpt

p1212 wrote: »

German car manufacturers will do exactly the same as they did with electric cars, they will let someone else (Tesla in this case) invest huge amounts into R&D and marketing the new product to people and when people are ready for electric cars and tech is more or less done they just make a way better electric car with a minimal investment.

Tesla is only a startup, a hype, a tool to get the money from the investors and still makes losses.

If the american tech guys crack self drive tech then car makers will just recruit some of their team for the necessary amount of money + promotion.

Also the whole self-drive thing is like google voice control, the tech is there, they want people to use it, but people don't like it, cause it is more natural to type in something with full control over the whole process, rather than give voice instructions with less effort, but without zero control over what happens on the computers side.

That is the most important thing, people want to keep control.

The same will happen with self drive cars, the whole driving process is about avoiding potholes, overtake cyclists, you see a gap and you switch lanes, going through the yellow etc... whenever YOU want. Yes, you would need to make less effort in a self-drive car, but it is going to be similarly frustrating not to have any control over the process.

To watch the car taking that bend at half the speed YOU wanted. It will be like running in water, extremely frustrating.

Also they are telling us we would do things in the self drive car like reading, washing our teeth etc..., well just try to read in a car, you will get sick in under 1 min. Also who the hell wants to wash their teeth in a car? That's why we have bathrooms and the luxury is actually not washing your teeth in your car, but having the time to do it at home.

A lot of what you say is true but you're missing one important thing. Self drive cars will be a lot safer that human driven cars and so I believe that driving a car yourself will become an expensive luxury. If you want to do it, fine but I think you'll have to pay a lot for the privilege. The world changes, people complain, but we move on and eventually everyone realises it's mostly better than it was. Normal cycle.

cells

mwpt wrote: »

A lot of what you say is true but you're missing one important thing. Self drive cars will be a lot safer that human driven cars and so I believe that driving a car yourself will become an expensive luxury. If you want to do it, fine but I think you'll have to pay a lot for the privilege. The world changes, people complain, but we move on and eventually everyone realises it's mostly better than it was. Normal cycle.

there might be an override function, eg let people drive but the computer takes over when it detects the human is clearly being stupid or even intentionally trying to cause damage (like the truck killer in paris)

westernpromise

sann420 wrote: »

This is a blindingly good post

No it's not. It's a potty, adolescent, conspiracist pile of steaming wibble.