UK Affordability still very good

ukcarper

GreatApe wrote: »

Buyers now have access to 40 years more capital returns and higher inheritances and gifts compared to when you were a lad

Back then it might have been mostly just income multiples now its income multiples plus a share of £200 billion annually. At least that's true for London and the expensive areas.

The share of that £200 billion is not spread evenly and it is not relevant to affordablity.

GreatApe

economic wrote: »

we really have become a wealthy nation/city. we are very lucky to be alive in this day and age!

yes indeed, I do feel sorry sometimes for those who do not have generational wealth to help them in life but I remind myself its a fantastic problem to have when maybe two thirds maybe more of the population are born into a country and families that can help them greatly

even for those who do not have any generational wealth or expectation many of them will get via marriages. Over time if the children per women figure stays below 2 then capital will be so abundant that the return on capital will be low to zero. That is to say those who do not inherit can at least benefit from 0% real rate mortgages rather than the 5-10% real rates of yesteryears

Windofchange

GreatApe wrote: »

In my experience from what I have seen from friends and family is that the kids get a whole house or a significant deposit for a house when they get married. Its not uncommon. You nay think its just the circles I mix in but I know lots of people most of whom are very average

The last wedding I went to the kids got over £100k as an early inheritences and they used it as a deposit to buy a home. The one before that got a £500k house outright. Another person I know a nurse getting married this year will be given a house outright which her taxi driver father owns and which was given to him by his father.

To ignore these people exist just leads to a poor model of the housing market and Mr bags of wind and co get frustrated when their median wage including kids and part timer earnings isn't able to buy the median for sale house.


Some £200 billion moves from the old to the younger each year. That's over a million homes worth of capital per year each and every year

You really pay absolutely no attention to anything do you. I'm going to focus then purely on question 5 from the post I made a few pages back that both yourself and Economic are yet to provide any sort of answer to.

From the ONS 2013:

1.6 million adults (3.6%) had received an inheritance valued at £1,000 or more in the two years preceding being surveyed. Although half of inheritors received less than £10,000, one in ten inherited £125,000 or more.

http://webarchive.nationalarchives.gov.uk/20160105160709/http://www.ons.gov.uk/ons/dcp171776_333036.pdf

From a 2011 LSE report:

"As can be seen from the statistics of this table inheritances are extremely concentrated: the top 1 per cent of inheritors received about 15 per cent of the total inherited wealth, while the top 5 and 10 per cent received 43 and 66 per cent of the total respectively."

http://sticerd.lse.ac.uk/dps/case/cp/CASEpaper148.pdf

Question 5) Given the two articles cited above (ONS and London School of Economics) show that inheritance is concentrated in very small bands, can you expand upon your assertion that millions of people in the UK every year are inheriting significant 'pots of gold'? 1 in 10 people inherit a figure over £125,000. 50% of inheritances are less than £10,000. How does this support your argument that the housing market can be kept afloat in part by this? As I covered at great length on one of your other threads, wealth is concentrated in the upper echelons of society - the top 10%. Your £200 billion a year is not evenly distributed, and therefore for the vast majority of people does not come into play when discussing house purchasing. It might just about cover the wake and a good knees up at the local pub for 50% of the population.

The_Real_Cheddar_Bob

whichever way you look at it, there are winners and losers in the housing market. I was gifted a deposit. Without it I have no idea how id raise the money for a deposit, despite a well above average income.

The deposit came from my wifes grandparents, both in their late 80's.
There appears to be in recent years an huge influx of amateur landlords who are able to obtain a second mortgage and exploit those who aren't able to, but can clearly afford the monthly payments.

I'm not saying those people are to blame, however they must be contributing to the issue

economic

GreatApe wrote: »

yes indeed, I do feel sorry sometimes for those who do not have generational wealth to help them in life but I remind myself its a fantastic problem to have when maybe two thirds maybe more of the population are born into a country and families that can help them greatly

even for those who do not have any generational wealth or expectation many of them will get via marriages. Over time if the children per women figure stays below 2 then capital will be so abundant that the return on capital will be low to zero. That is to say those who do not inherit can at least benefit from 0% real rate mortgages rather than the 5-10% real rates of yesteryears

yeh I agree. long term we do have a low return world upon us given demographics.


long term the western world has to collapse unless something major happens to change the way our economy functions.


there will be a point when it would be better to move to asia for a better living standard.

ukcarper

economic wrote: »

how do you know this? any proof?

Just experience and I'm probably more typical than someone of your wealth.

economic

Windofchange wrote: »

You really pay absolutely no attention to anything do you. I'm going to focus then purely on question 5 from the post I made a few pages back that both yourself and Economic are yet to provide any sort of answer to.

From the ONS 2013:

1.6 million adults (3.6%) had received an inheritance valued at £1,000 or more in the two years preceding being surveyed. Although half of inheritors received less than £10,000, one in ten inherited £125,000 or more.

http://webarchive.nationalarchives.gov.uk/20160105160709/http://www.ons.gov.uk/ons/dcp171776_333036.pdf

From a 2011 LSE report:

"As can be seen from the statistics of this table inheritances are extremely concentrated: the top 1 per cent of inheritors received about 15 per cent of the total inherited wealth, while the top 5 and 10 per cent received 43 and 66 per cent of the total respectively."

http://sticerd.lse.ac.uk/dps/case/cp/CASEpaper148.pdf

Question 5) Given the two articles cited above (ONS and London School of Economics) show that inheritance is concentrated in very small bands, can you expand upon your assertion that millions of people in the UK every year are inheriting significant 'pots of gold'? 1 in 10 people inherit a figure over £125,000. 50% of inheritances are less than £10,000. How does this support your argument that the housing market can be kept afloat in part by this? As I covered at great length on one of your other threads, wealth is concentrated in the upper echelons of society - the top 10%. Your £200 billion a year is not evenly distributed, and therefore for the vast majority of people does not come into play when discussing house purchasing. It might just about cover the wake and a good knees up at the local pub for 50% of the population.

they could be gifted money which is not included in these studies.

economic

ukcarper wrote: »

Just experience and I'm probably more typical than someone of your wealth.

probably. so you are not certain.


I am not saying I am typical. I am 34 and with a net worth of 800k. however you are maybe the otherside of this extreme.

Windofchange

economic wrote: »

they could be gifted money which is not included in these studies.

The ONS paper states as sources of income:

1) Money and Savings
2) Property
3) Personal Items
4) Stocks and Shares

What other money are you talking about? Let me guess, you are going to assert that everyone in the country has £200k stashed in crisp £50 notes down the back of the sofa?

So, other than those 4 categories above, what other money? Your counter points are absolutely farcical.

economic

Windofchange wrote: »

The ONS paper states as sources of income:

1) Money and Savings
2) Property
3) Personal Items
4) Stocks and Shares

What other money are you talking about? Let me guess, you are going to assert that everyone in the country has £200k stashed in crisp £50 notes down the back of the sofa?

So, other than those 4 categories above, what other money? Your counter points are absolutely farcical.

do you understand the differences between inheritances and gifts? if you don't, I suggest you read it up before polluting this thread with your waffle.