Will there really be a crash?

GreatApe

BikingBud wrote: »

No I have not accepted any of you argument, just stating facts as I can easily find them on the wonderful world wide web, hey that's great isn't it, it's now 4dubs:j

I keep trying to follow your argument but it is inconsistent and riddled with gross assumptions and lacks basic credible facts. Trust us to assess any facts or links you may wish to use in support of your discussion

I dont think you are capable enough to follow without adding useless distractions and confusing yourself

If you are interested what you should do is look at the number of deaths per year and multiply that by the average age between generations say 30 years. The reason is obvious, your grandma dies only once

Try that and see what you get.
Here is a rough calculation. 600,000 deaths say each death leaves half a home and 75% of the old own you get a figure of 225,000 homes left per year then multiply that by 30 and you get a figure of 6.75 million homes passed down from one generation to the next

If you model it as predominantly 65-95 year olds doing the dieing and 35-65 year olds doing the inheriting you get 6.75 million homes passing from the 65-95 age group to the 35-65 age group per generation

How many are in the 35-65 age group. Around 25 million however they form into households of around 12.5 million people. So some 12.5 million households receive 6.75 million homes for free and this is as you can see very widely spread

Using this simple model you get each household receiving 0.54 homes for free.

It is actually more than that a lot more because we only looked at owner homes and not second homes or investment homes which the old also own a lot of. Some 2.5 million BTLs are owned by landlords who only have 1 BTL and most of those are older landlords and another 2.5 million BTLs are owned by more concentrated landlords. Add that into the mix and you get some 5 million investment properties inherited per generation too then you get 12.5 million households receiving 6.75 million homes and 5 million investment homes and you get to a figure of 0.94 homes received per household.

And we know housing is only about half the wealth gifted/inherited therefore you get something in the region of 0.94 homes inherited and 0.94 homes worth of other capital inherited/gifted

You can then check this with the ~£200 billion flow annually and see if it correlates. 11.75 million homes @ £230k a home x the same again in other wealth / 30 years between generations = £180 billion per year

Again fits perfectly
Despite your protests the majority of couples do and will get very significant inherited wealth close to 1 free house and then the same again in other inherited wealth (savings pensions land etc)

GreatApe

BikingBud wrote: »

I keep trying to follow your argument but it is inconsistent and riddled with gross assumptions and lacks basic credible facts.

Don't be so sure of yourself

Yes clearly you are finding my ideas difficult to follow but none of what you have said disproves what I have put forward which is that £10 trillion net wealth exists in the UK (fact) and about £200 billion annually flows from old to not as old and this money flows into housing and is the reason why looking at income vs house prices alone is stupid

And while triathlon is quite abrasive there is truth in what he says. Always look and learn from those who have done better than yourself. Don't think you are so smart and capable because the world will prove you otherwise and make you bitter if you feel it owes you for being so smart when the reality is probably that you are not as capable as you think you are

GreatApe

triathlon wrote: »

Here is a fact, 97.567% of renters are just bitter little people who think being funny or trying to be funny in some way makes them right. Anyway I am just waking up to another wonderful day in my beautiful big home overlooking fields and coastline in the distance next to me gorgeous lady, while you put your first foot on the floor knocking over those empty beer cans in that sad old bedsit .
Carry on with the lame wit, how is it working out for you?, just make sure you pay my rent at the end of the month and you can be as "witty" as you like.

The majority of renters are temporary renters before they buy or are given social housing or inherit wealth. It is a transitional tenure

It is only the very special few who become long term (>10 years) renters and join hpc cults to examine how smart they are for spotting a bubble that is bound to crash this Christmas by 50% to cover their speculative housing shorts

GreatApe

ukcarper wrote: »

I'm glade to see you are still arguing this I think you will have as much luck convincing your bikingbud as you did me.

You do not disagree with the existance of ~£10 trillion net wealth or the annual flow of ~£200 billion from old to younger. You just disagree that it is of much help to 30 year olds looking to buy, but that is not my claim

Also this knoledge helps build a better model of the housing market.

The hpc model is the average single man on median wages (includng part time and children) should be able to buy the median house. This is clearly wrong and a much better model would show

FTB couples able to buy the average of the bottom 1/3rd of properties nationally
Second time buyers, typically some 20 years later, are able to buy the middle 1/3rd of properties nationwide using both saved up equity plus inherited wealth.
The rich folk are able to buy the top 1/3rd of properties nationally again with equity + inherited wealth but also other wealth too like inherited pensions or business sales or lotto wins or very high wage individuals etc

Looking at this model housing for FTBs is much more affordable than the silly model of FTBs buying the median in their area using nothing but income multiples

Herzlos

We disagree that everyone has 2 sets of grandparents who own a property outright and partners up meaning that each couple inherits a complete house. Or that after the various duties can do much with it.



With more and more people owning multiple properties, the distribution isn't even. Some will inherit a house between a couple, some will inherit 5 houses each, and some will inherit nothing.


Using a representative sample of me. 1 living grandparent, renting. Nothing there.

Next generation down there's 4 living grandparents, with 2 houses but 5 kids. So you're almost there, assuming all 4 die off without downsizing or selling the houses, we'd get 20% of a house each.
But realistically, many will downsize and do something with the money (holidays, gift to kids etc), or will be forced to sell it to pay for care and so on.


You're assuming that everyone is in a "functional" family unit where there's no issues or unexpected costs.



I'm not convinced that 75% of pensioners own property, either. Going by your own figures half of them pay no inheritance tax, meaning a total estate of under £350k. So that means house + any savings + car + valuables.



I'm seeing figures showing an average inheritance of about £147k, which is well under the average house price. So I don't believe your theory, and I don't think anyone else does either.

GreatApe

With more and more people owning multiple properties, the distribution isn't even. Some will inherit a house between a couple, some will inherit 5 houses each, and some will inherit nothing.

Sure. But millions will get. Its not a case of 99 not getting and 1 getting a huge sum its a case of 70-80 getting big sums and maybe 20 getting nowt

Next generation down there's 4 living grandparents, with 2 houses but 5 kids. So you're almost there, assuming all 4 die off without downsizing or selling the houses, we'd get 20% of a house each.

2 houses spread among 5 kids is 40% of a house each and if they partner up with someone who also gets gifted 40% of a house then combined their household would be gifted 80% of a house see you are the norm !

But realistically, many will downsize and do something with the money (holidays, gift to kids etc), or will be forced to sell it to pay for care and so on.

Not a large %

You're assuming that everyone is in a "functional" family unit where there's no issues or unexpected costs.

Not at all I am well aware there are many dysfunctional families this does not however mean the £200 billion or so flow of wealth from old to less old does not exist

I'm not convinced that 75% of pensioners own property, either. Going by your own figures half of them pay no inheritance tax, meaning a total estate of under £350k. So that means house + any savings + car + valuables.

The IHT threshold is per person, realistically most people have 2 x that threshold due to being a couple

GreatApe

Herzlos wrote: »

I'm seeing figures showing an average inheritance of about £147k, which is well under the average house price. So I don't believe your theory, and I don't think anyone else does either.

Is £147,000 a small sum of money?

And if you couple up with someone else who also gets the average £147k (according to you) then combined you have nearly £300k in free wealth handed to you. Enough to buy an average uk house outright

Isn't the UK wonderful we mostly get free housing thanks to grandma having paid off her mortgage a couple decades ago :T

Herzlos

Yep, perfect for those at the average point and above. But I suspect it's hugely skewed by top end inheritances and that the bottom chunk of the population (those that'd actually need help buying a house) get nothing.



This link: https://www.yourmortgage.co.uk/news/average-inheritance-100k/ implies the average is £119k and that 1/3rd of people don't plan on leaving any inheritance (only 20% expecting it). People who get an average each at an appropriate life stage will be able to pay for an average house outright. Less happy news for the bottom 33% though.




This link is pretty good too: https://www.independent.co.uk/money/the-truth-about-your-inheritance-a7545696.html

Younger generations are likely to inherit much more wealth than their predecessors did, both in absolute terms and relative to their other sources of wealth, their research has found. But within each generation, those who are already well off tend to inherit the most – with implications for inequality and social mobility.
Ranking current pensioners by total lifetime income (excluding inheritance), those in the top 20 per cent have inherited four times as much as the bottom 20 per cent on average. Among younger generations, those with higher incomes are significantly more likely to expect an inheritance than those with lower incomes.
Even excluding the super-rich, the richest half of elderly households (aged over 80) hold 90 per cent of the wealth. In fact, the richest 10 per cent hold 40 per cent of the wealth. Hence a ‘lucky half’ of younger generations look likely to get the vast majority of inherited wealth.

Again highlighting that the problem with your assumption is in distribution. No-one doubts the total £ figures, just that it doesn't translate into everyone getting a fair share. Some will inherit money/property they can add to their folio, some will inherit a useful amount, whilst many will inherit almost or actually nothing.

GreatApe

Herzlos wrote: »

Yep, perfect for those at the average point and above. But I suspect it's hugely skewed by top end inheritances and that the bottom chunk of the population (those that'd actually need help buying a house) get nothing.

This link: https://www.yourmortgage.co.uk/news/average-inheritance-100k/ implies the average is £119k and that 1/3rd of people don't plan on leaving any inheritance (only 20% expecting it). People who get an average each at an appropriate life stage will be able to pay for an average house outright. Less happy news for the bottom 33% though.

This link is pretty good too: https://www.independent.co.uk/money/the-truth-about-your-inheritance-a7545696.html

Again highlighting that the problem with your assumption is in distribution. No-one doubts the total £ figures, just that it doesn't translate into everyone getting a fair share. Some will inherit money/property they can add to their folio, some will inherit a useful amount, whilst many will inherit almost or actually nothing.

>2/3rds will inherit very significant sums of capital and >2/3rds of peoples partners will inherit very significant sums of capital. That means only <1/6th will be in a couple who do not inherit significant capital from either side

Isn't it great that we live in a nation where >5/6ths of households will inherit and be gifted significant sums of capital. Long live free market capitalism and the vast wealth it creates and gives for free to the majority of the youngsters

GreatApe

Herzlos wrote: »

Yep, perfect for those at the average point and above. But I suspect it's hugely skewed by top end inheritances and that the bottom chunk of the population (those that'd actually need help buying a house) get nothing.

The bottom 20% get free social housing.
The 80% on top of that mostly get gifted free housing (or other capital) thanks to the nations grandmas

While you like to pretend wealth is so unevenly distributed it is another fake news narrative by the dim. Look at housing the biggest stock of wealth in the country.

About 63% is owner occupied 17% state owned so that there is 80% as thinly spread as you can spread it. Only some 20% is owned by landlords and more than half of that by landlords who only have 1 single BTL

This is a great country with high wages full employment lots of opportunity and a tsunami of gifted/inherited wealth for the masses. We have never had it so good :beer: