"Housing Market Slumps"

Windofchange

GreatApe wrote: »

You jumped into this debate knowing nothing of inheritance data and stats

Yup and I am curious as to the other side of the argument. The common theme with all of this is you have no ability to critically reason. I've not tried to state I am an authority with this, I am merely pointing out glaring issues with your statements. You cannot have a reasoned debate with someone who has no reason! Let us begin.

GreatApe wrote: »

...You can pick your own number but I reckon about 30 years for a generation is a fair number. So that is 6 million pots of gold going from one generation to the next. Somehow you thus conclude its only going to 10% of the population

Because that is what the basic mathematics that I have already laid out for you gives us. Let me spell this out for you.

The figures you give above are roughly 200,000 pots as you say above 100k.
The UK population is currently 66 million.
200,000 as a percentage of 66 million is 0.30%. So, 0.30% of the population get one of these pots each year.
30 years x 0.30% is 9%.
This is giving you leeway in that the UK population is growing year on year. That is where I get my 10% from. Understand?

GreatApe wrote: »

...when in reality once you remove the kids

But hang on a minute, I thought the kids are the ones getting an inheritance? I know my parents have started paying into my two niece's (aged 6 months and 24 months) ISA's out of what will be mine and my brothers' inheritances. Why are you removing children from an inheritance?

GreatApe wrote: »

...you get to a figure of about two thirds of the population. Which correlates well with the figure that roughly two thirds of households own their own homes.

But you don't. You get to a figure of 9% of the population as per the maths above. As for two thirds of households owning their own homes, I have already given you the data above. Let's do it again - please open the below link:

http://webarchive.nationalarchives.gov.uk/20160105160709/http://www.ons.gov.uk/ons/rel/census/2011-census/detailed-characteristics-on-housing-for-local-authorities-in-england-and-wales/short-story-on-detailed-characteristics.html

Scroll down a page to figure one which will give you a nice bright coloured pie chart. There are 7.2 million households who own their property outright. There are a further 7.8 million who own with a mortgage. So, if all those people died now, 7.2 million would leave a brought and paid for house. Even if you assume most of these households consist of two adults, that gives you 12 million perhaps (2 million divorced, single etc) who own a house. This isn't two thirds of the population. This is nowhere near two thirds of the population. Even if you add in the other 7.8 million with a mortgage and do the same thing that gives you around 25 million people which is around 50% of the adult population of the uk (approximately 51 million people over the age of 19). Depends how 'rough' you want to get with your 66%.

GreatApe wrote: »

Spend a few days thinking and then come back and tell me your 1 hours knowledge and zero minutes analysis of the subject is better than mine

I have to go out again, but if you want, I can pick gaping holes in more of your arguments later? There are some absolute gems. I'm particularly looking forward to seeing you defend your stance that everyone's inheritance pot has grown by 50% in 3 years. I'm also intrigued by your follow up comment about who cares about the exact figures when you are trying to make a point that I don't know exact figures / am uneducated. Oh, and here's some more stats for you:

http://webarchive.nationalarchives.gov.uk/20160105160709/http://www.ons.gov.uk/ons/dcp171776_428631.pdf

Page 5 has got another pretty picture for you which might help given maths isn't a strong point of yours. Just over £7 trillion of the £11.1 trillion of wealth the UK had at the end of 2014 was held by 20% of the population. Look at the 5th Decile down. How big a pot of gold as you call it are 50% of the UK population leaving their bereaved? They don't even make it to a trillion between them all. And you think that two thirds of the population are home owners? Look at page 3 of that same document. 35% of the UK's wealth is in property. If you need any of this breaking down into even more simple terms do let me know.

GreatApe

economic wrote: »

but how much of the pots of gold is in property already?

overall, a little under 50% of the pot of gold is residential property

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/541409/Table_12-4.pdf


However I do not see why this matters? Imagine all the inheritances were in the form of property so 100% how does that change anything?

PS my argument is not that inheritances are driving the housing market. My argument is that inheritances form a large part of peoples 'income' so looking at economic issues without considering this elephant in the room leads to poor analysts. With regards to house prices, it makes no sense to say things like average wage earner should buy the average property. Its a much better to say the average wage earner receiving the average inheritance should be able to afford the average property, once you minus the social stock folk.

London residents leave the most inheritances and give the biggest gifts. This is one of the hidden affordability factors in London

GreatApe

Windofchange wrote: »

If you need any of this breaking down into even more simple terms do let me know.

Yes please help me with the following

How many pots of gold worth >£100k were left in 2013/14?
How many people died in 2013/14?
Therefore what percentage of people dieing leave significant pots of gold?

Of the 28 million homes in the UK, how many are not owned by the state and how many are not lived in by renters and what is that number as a percentage of 28 million?


also describe the economy situation of a hypothetical person who should be able to buy the average proeprty. Should the average, median, full time single male be able to afford the average for sale property?

Windofchange

GreatApe wrote: »

Yes please help me with the following

How many pots of gold worth >£100k were left in 2013/14?
How many people died in 2013/14?
Therefore what percentage of people dieing leave significant pots of gold?

Of the 28 million homes in the UK, how many are not owned by the state and how many are not lived in by renters and what is that number as a percentage of 28 million?


also describe the economy situation of a hypothetical person who should be able to buy the average proeprty. Should the average, median, full time single male be able to afford the average for sale property?

Ok, well there were around 200,000 pots as you call them worth greater than 100k. According to the ONS, there were 506,790 deaths in 2013 and 501,424 in 2014. Shall we put it in the middle at 506,790 + 501,424 / 2 = 504,107

https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/deaths/bulletins/deathsregistrationsummarytables/2014-07-16

Now, to use your stats from back in the thread:

For 2013/2014

2,280 people left an inheritance of >£2 million
6,061 people left an inheritance of > £1 million to £2 million
21,742 people left an inheritence of > £0.5 million to £1 million
54,842 people left an inheritance of >£0.3 million to £0.5 million
43,087 people left an inheritence of > £0.2 million to £0.3 million
71,849 people left an inheritance of > £100k to £200k

The sum of this is 199, 861.

So according to this very simplistic view of things, 39.65% of people dying leave an inheritance of > 100k. Do you want to do some critical thinking though? The average number of children per woman in the UK was 2.4 in 1937. Now:

"In 2012–2014, a man in the UK aged 65 had an average further 18.4 years of life remaining and a woman had an average further 20.9 years of life remaining"

https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/lifeexpectancies/bulletins/nationallifetablesunitedkingdom/2015-09-23

So, currently a man may live to 83.4 years old (65 + 18.4), and a woman 86.4 years old (65 + 20.9). The male / female average is therefore 84.9 years old. We are in 2017, so the average person born in 1932 is now dying. This isn't quite 1937 as per my stats, but close enough to not give a major statistical blip (WW2 still hadn't started). The average person from that era had 2.4 children, hence the coining of a phrase you may have come across to describe British suburbia.

http://www.telegraph.co.uk/news/uknews/immigration/11806379/End-of-2.4-children-as-Britain-has-biggest-families-in-Europe.html

So, assuming that these inheritances are split evenly between siblings (that won't always be the case I will of course concede), that makes your figures: (Number / 2.4 -> where there is a range such as 1 - 2 million I have taken the middle, so 1.5 million / 2.4)

For 2013/2014

2,280 people left an inheritance of >£833,333
6,061 people left an inheritance of > £625,000
21,742 people left an inheritence of > £312,500
54,842 people left an inheritance of >£166,666
43,087 people left an inheritence of > £104,166
71,849 people left an inheritance of > £62,500

You have simply got some numbers and gone aha, there is the proof (although your proof comes out at under 40% of the population inheriting > 100k). However, although there will be people who inherit everything, there will be plenty who have to share it between siblings.

So, to be a bit more specific it looks as though 128,012 people could have expected to receive an inheritance of > £100k out of 504,107 deaths. This represents 25.39% of the inheritances in that year which is remarkably similar to earlier statistics that the top 20% of the country owns 7 trillion out of the 11 trillion pounds of UK wealth. In other words, it isn't a large pool of people at all who are inheriting this wealth, it is the top 25% of the nation who were probably born into the top 25% of the nation etc etc. This is one of the things you are failing to grasp. You want to say aha, loads of people are inheriting large sums of money, but the numbers don't support any of what you are insinuating.

As to the rest of it:

There are 23.4 million households (not sure where your 28 million comes from) in the UK as per my previous link (homes as you call it), and of this 4.2 million are privately rented, 4.1 million are socially rented, 7.8 million are owned with a mortgage, 7.2 million are owned outright.

Therefore:

19.3 million homes are not owned by the state (82.47%)
15.1 million homes are not lived in by renters (64.52%)

Can you explain the importance of this? I've got a feeling where you are heading, and it's making me laugh already...

As for who should be able to afford the median property, well I would love it if the average person could afford the average house. Isn't that what we should strive towards in a fair developed country? With this one I really am unsure as to where you are going, but I'll let you expand upon your point.

economic

Windofchange wrote: »

As for who should be able to afford the median property, well I would love it if the average person could afford the average house. Isn't that what we should strive towards in a fair developed country? With this one I really am unsure as to where you are going, but I'll let you expand upon your point.

and how can we strive towards this happening? and why would we even want it to? we should only care about economic growth and making it a level playing field so those who are poor have a chance to prove themselves so they can become richer. however it should never be done at the expense of the middle class or rich. socialism is dangerous and we should only strive for a fair capitalist economy.

those that are not smart, lucky or hard working and find themselves with little or no money simply do not derserve anything but the most basic housing/food as humanely possoble and nothing else.

GreatApe

Windofchange wrote: »

Ok, well there were around 200,000 pots as you call them worth greater than 100k. According to the ONS, there were 506,790 deaths in 2013 and 501,424 in 2014. Shall we put it in the middle at 506,790 + 501,424 / 2 = 504,107

https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/deaths/bulletins/deathsregistrationsummarytables/2014-07-16

Now, to use your stats from back in the thread:

For 2013/2014

2,280 people left an inheritance of >£2 million
6,061 people left an inheritance of > £1 million to £2 million
21,742 people left an inheritence of > £0.5 million to £1 million
54,842 people left an inheritance of >£0.3 million to £0.5 million
43,087 people left an inheritence of > £0.2 million to £0.3 million
71,849 people left an inheritance of > £100k to £200k

The sum of this is 199, 861.

So according to this very simplistic view of things, 39.65% of people dying leave an inheritance of > 100k.

what happened to the cries of its all concentrated in the hands of a few?

If 40% are leaving significant pots of gold, which you concede they are, then its not just in the hands of the few. PS the other 60% are not leaving nothing. For instence 12% are leaving between £60k-£100k which is also significant sums

Do you want to do some critical thinking though? The average number of children per woman in the UK was 2.4 in 1937. Now:

So, assuming that these inheritances are split evenly between siblings (that won't always be the case I will of course concede), that makes your figures: (Number / 2.4 -> where there is a range such as 1 - 2 million I have taken the middle, so 1.5 million / 2.4)

For 2013/2014

2,280 people left an inheritance of >£833,333
6,061 people left an inheritance of > £625,000
21,742 people left an inheritence of > £312,500
54,842 people left an inheritance of >£166,666
43,087 people left an inheritence of > £104,166
71,849 people left an inheritance of > £62,500

wow how hard you try, fine you divided the pots of gold by 2.4 children great but why do you then not multiply the pots of gold by 2.4????????

So why did you go from 71,849 pots of gold worth £100k-200k and list it as '71,849 people left an inheritance of > £62,500'??? when you should have listed it as '172,438 people received an average pot of gold worth £62,500'??

Trying to pull a fast one?

You have simply got some numbers and gone aha, there is the proof (although your proof comes out at under 40% of the population inheriting > 100k). However, although there will be people who inherit everything, there will be plenty who have to share it between siblings.

you went from not considering inheritances at all to now trying to downplay the impact of

5,472 people receiving an inheritance of >£833,333 each
14,546 people receiving an inheritance of > £625,000 each
52,180 people receiving an inheritance of > £312,500 each
131,629 people receiving an inheritance of >£166,666 each
103,408 people receiving an inheritance of > £104,166 each
172,438 people receiving an average pot of gold worth £62,500 each

PER YEAR EACH YEAR and the stats are out of date so the figures are even higher

So, to be a bit more specific it looks as though 128,012 people could have expected to receive an inheritance of > £100k out of 504,107 deaths. This represents 25.39% of the inheritances in that year which is remarkably similar to earlier statistics that the top 20% of the country owns 7 trillion out of the 11 trillion pounds of UK wealth. In other words, it isn't a large pool of people at all who are inheriting this wealth, it is the top 25% of the nation who were probably born into the top 25% of the nation etc etc. This is one of the things you are failing to grasp. You want to say aha, loads of people are inheriting large sums of money, but the numbers don't support any of what you are insinuating.

are you F crazy?

your own analysis shows are almost half a million people each year who get an average of AT LEAST £62,500 EACH. With >300,000 of them getting at least £104,000 EACH.

How are 300,000 people per year every year getting at least £104k each not significant and then another 200,000 people per year getting £62,500 to £104k each per year.

There are 23.4 million households (not sure where your 28 million comes from) in the UK as per my previous link (homes as you call it), and of this 4.2 million are privately rented, 4.1 million are socially rented, 7.8 million are owned with a mortgage, 7.2 million are owned outright.

23.4 million looks like the england figure not the uk figure. There are close to 28m homes in the UK in 2017

Therefore:
19.3 million homes are not owned by the state (82.47%)
15.1 million homes are not lived in by renters (64.52%)
Can you explain the importance of this? I've got a feeling where you are heading, and it's making me laugh already...

It shows once again, that significant proportions of the population own significant sums of capital. About two thirds of households own their own homes many with no or small mortgages.

As for who should be able to afford the median property, well I would love it if the average person could afford the average house. Isn't that what we should strive towards in a fair developed country? With this one I really am unsure as to where you are going, but I'll let you expand upon your point.

the average person can afford the average house, the problem is when people think of average they only often just quote some silly number they think is average which is not average at all. Eg a lot of the crash cheerleaders on hpc will say something like the average person on £26k a year should be able to comfortably buy the average house. That is bonkers as the figures are all wrong

and the lesson of the last few days, where you didnt even consider inheritances role in peoples incomes and wealth and now are trying to downplay the 300,000 people who receive annually >£100k in pots of gold and the additional 200,000 who get a pot of gold of some £60-£100k


Edit:
OH and not forgetting gifts!! which will be the same sort of scale if not larger

GreatApe

economic wrote: »

and how can we strive towards this happening? and why would we even want it to? we should only care about economic growth and making it a level playing field so those who are poor have a chance to prove themselves so they can become richer. however it should never be done at the expense of the middle class or rich. socialism is dangerous and we should only strive for a fair capitalist economy.

those that are not smart, lucky or hard working and find themselves with little or no money simply do not derserve anything but the most basic housing/food as humanely possoble and nothing else.

capital will spread out so long as people do not inbreed

you do not even need to wait for this natural cycle of spreading wealth out via marriages kids death or divorce. There is a more imminent way that capital gets spread out and that is via a crash in the price of capital

So for instance you might inherit a million pounds and ten homes. Presumably you wont just waste it all on hookers and booze in a few months. Instead you will try to rent your capital out for a return. But since women are having <2 kids it means the number who want/need to rent out capital is going to be outnumbered by the number who need to rent capital. The result is a zero interest rate world which we are now in and will be in so long as women have fewer than 2 kids. It might even go strongly negative (in real terms)

So it might seem unfair that some people inherit millions and others inherit none. However the capitalist system we have will mean the person that does not inherit capital can at least borrow capital for nil cost.

GreatApe

House prices are up 30% since April 2013 and since about 50% of the pots of gold are property that means the sums about need to be increased by 15% to take into account property price increases. The rest of the pots of gold are securities land and other buildings and cash accounts. They are also up perhaps not as much as property but they are all up vs 2013. Plus household savings rate has been positive since then so people are not just seeing asset price increases but are adding to savings via saving their income. IF we assume 20% that takes the pots of gold up 25% since the data we are looking at.

If you assume each pot of gold is divided among 2.4 persons and add the estimated 25% uplift since 2013 we get the following. Due next post

GreatApe

2016/17 estimates. Sums inflated 25% to take into account increased asset prices and continued positive household savings rate. Inheritance pots assumed to be divided among 2.4 persons each 10/24th of the pot

5,472 persons received a pot of >£1,005,000 each
14,546 persons received a pot of £781,000 each
52,181 persons received a pot of £390,000 each
131,621 persons received a pot of £208,000 each
103,408 persons received a pot of £130,000 each
172,438 persons received a pot of £78,000 each
71,510 persons received a pot of £42,000 each

That is each year 480,000 individuals receiving at least £78,000 each
And if you are one of these individuals, this money helps you and your partner and your kids so it impacts positively on many more than 480,000 individuals each year

And this does not include gifted wealth before death which will be as big as inheritances if not more!

Very very significant in scale and size
How many of these 480,000 annual pots of gold go into the housing market indirectly or directly?

Windofchange

economic wrote: »

and how can we strive towards this happening? and why would we even want it to? we should only care about economic growth and making it a level playing field so those who are poor have a chance to prove themselves so they can become richer. however it should never be done at the expense of the middle class or rich. socialism is dangerous and we should only strive for a fair capitalist economy.

those that are not smart, lucky or hard working and find themselves with little or no money simply do not derserve anything but the most basic housing/food as humanely possoble and nothing else.

Are you serious? Why wouldn't we want Mr or Mrs Average in London earning (Late 2015 stats) £48,023 a year to be able to afford an average London flat of now £484,716? Why wouldn't you want a worker outside of London earning on average £26 ish grand a year to be able to buy the average property of wherever else in the country?

https://www.gov.uk/government/news/uk-house-price-index-hpi-for-july-2016

You don't think that we should strive towards nurses, doctors, accountants, teachers, managers etc etc being able to afford somewhere to live? These people aren't smart or hard working? I love also how you have thrown lucky in there as in if you're not lucky then screw you. Special.

I reckon you've spent so much time with your sloaney friends talking about novel ways to spend your million pound inheritances that you've lost touch of all reality!