Why are house prices still so high?

GreatApe

chucknorris wrote: »

Employment income is only around 5% of our total earnings.

I dont believe it, you dont exist, nor do I
Houses are only bought by people working in Tesco who have no other income

The 30% of the economy, you know £600 billion which is non wages that does not exist either. Its all a conspiracy theory to keep the Illuminati in power and house prices high

GreatApe

Zero_Sum wrote: »

What % of the population have these million pound businesses & rental property portfolios? The average bloke in the street dont have this nor do they have wealthy parents gifting them cash. You're living in a londoncentric bubble.

The problem is most people have friends who are similar to themselves. So while your experience is one of you and your friends no having these things my experience is one of most the people I know having these things.

Lets look at rental home ownership. There are about 5 million BTLs and it is dispered very widely. Most of those BTLs are people who just own just one BTL property.

People dont like to boast or brag but a LOT of households have a lot of additional income even some very modest workers have ended up with huge pots of gold. I used to work in the steel industry some people walked away with pension pots of over £500,000

How can nearly 8% of children be privately educated at huge post income costs?
How do people afford to buy nearly 3 million brand new cars in the UK each and every year?

I dont know how or why people pay £30k for a new car. Just because I have never bought a new car does not mean new cars dont exist or others find it easy to buy

Simply put about £600 billion a year is earned via non work this is a fact
Another £200 billion a year is gifted from the old to the less old

People especially wealthy people just dont like to brag or show off
Many of the millionaires i know you couldn't tell they were, one in fact almost looks homeless still rocking a jacket he bought 30-40 years ago :eek:

GreatApe

Zero_Sum wrote: »

What % of the population have these million pound businesses & rental property portfolios? The average bloke in the street dont have this nor do they have wealthy parents gifting them cash. You're living in a londoncentric bubble.

Regarding parents gifting them wealth, the vast majority of uk born Brits will inherit wealth equal to or in excess of one fully paid off home

This is obviously true by the fact that the majority of the old own a home outright and cant take it with them when they die. They leave it behind as an inheritance.

About £200 billion a year, or around £3 trillion a generation is gifted by the old to the younger

And it is very widely spread out.
Even if you have poor parents and poor grand parents there is a 75% chance your partner/wife parents and grand parents are not poor

Plenty of people marry into wealth.
Some seek to marry into wealth and good luck to them, but most just stumble upon it

Simply put this is a very rich country with a lot of wealth very widely spread out but as individuals we are somewhere on a normal distribution. You might be on the poor end and only see that side of society but there is a wealthy end and a super wealthy end too.

I've seen both sides and Like yourself, 10+ years ago I had no clue to the extend of wealth that exists in the UK and I am not talking about the billionaires but those that have £500k - £5 million there are millions of such individuals

PokerPlayer111

GreatApe wrote: »

I had no clue to the extend of wealth that exists in the UK and I am not talking about the billionaires but those that have £500k - £5 million there are millions of such individuals

If you were a person of lower wealth why should you be concerned about these people? (in the context of moaning about high house prices)

The problem is most people have friends who are similar to themselves. So while your experience is one of you and your friends no having these things my experience is one of most the people I know having these things.

Yeah so how you digest those stats on a few pages back about the housing stock distribution is different from how i'd look at them.

GreatApe

PokerPlayer111 wrote: »

If you were a person of lower wealth why should you be concerned about these people? (in the context of moaning about high house prices)

The main problem is those on lower than average wages/wealth dont realize that they are on lower than average wages/wealth and thus come up with incorrect economic models to justify wrong positions and also live their lives in sub optimal ways. I was the same 10+ years ago I thought I earned more or less the average and was more or less the average person income wise but I soon realized I wasn't average I was actually poor even though I earned about £25k + ~£8k pension at the time.

Although I had ok income I had no wealth and no non working income and would not have gotten any significant gifts or inherited wealth for decades so in the pile of wealth I was actually very low which of course makes sense as I had just started working

The first thing to realize is that if you are a man on lower than £35k wages you need to up your game

The second thing to realize is if you are from a poor family you either need to do much much better than your peers earning the same income but who will inherit a free house or two. Or you need to actively seek to partner up with someone who is not from a poor family

And the third thing to realize is that you need to gather yourself a share of the £600 billion in annual non wage income.


The good news is that for most people in the UK they dont need to earn all that much or gain a share of the £600 billion in capital income because most uk born brits will just inherit huge sums of capital from their grand parents and parents

GreatApe

PokerPlayer111 wrote: »

Yeah so how you digest those stats on a few pages back about the housing stock distribution is different from how i'd look at them.

I was not particularly making any assumptions or personal inferences. I was just stating a known fact which is that the private rental sector is a transient tenure. 80% of private renters buy their own home or get given social housing within less than 10 years some as quick as just 1-2 years.

Also not all private renters are poor I know a number of people who rent privately and also own a home in another part of the country.

If you look at how many people will own or get social housing at some point in their life it is extremely high at around 96% of the population

So the problem, in so far as it exists is how we go from 96% owning or in social towards 100% in owning or going into social housing. It is a small problem, it is a temporary problem for the majority. Actually I would not even call it a problem, I rented privately for 9 years it was not a 'problem' it was just a part of my life where I needed or wanted to rent privately

The biggest problem by far is that the commentators and uninformed look at a snapshot of housing tenure which is a bad way to look at it. Even Hamish a smart chap does not get this although I think he will now since he is quite smart and seems to hold no fixed position either way

lisyloo

Regarding parents gifting them wealth, the vast majority of uk born Brits will inherit wealth equal to or in excess of one fully paid off home

They can’t take it with them but some with spend money on care and 30% don’t own houses.
I don’t agree with the vast majority.

Also some of us won’t be on a position for it to help us with housing.
I’ve paid off my mortgage and still haven’t had an inheritance yet (not the least bit bothered).

So remove the 30% that never own, take off what’s spent in care and bear in mind some with be in their 50s/60s/70s when inheriting.

A long way off the majority getting a house.

Zero_Sum

GreatApe wrote: »

The problem is most people have friends who are similar to themselves. So while your experience is one of you and your friends no having these things my experience is one of most the people I know having these things.

Lets look at rental home ownership. There are about 5 million BTLs and it is dispered very widely. Most of those BTLs are people who just own just one BTL property.

People dont like to boast or brag but a LOT of households have a lot of additional income even some very modest workers have ended up with huge pots of gold. I used to work in the steel industry some people walked away with pension pots of over £500,000

How can nearly 8% of children be privately educated at huge post income costs?
How do people afford to buy nearly 3 million brand new cars in the UK each and every year?

I dont know how or why people pay £30k for a new car. Just because I have never bought a new car does not mean new cars dont exist or others find it easy to buy

Simply put about £600 billion a year is earned via non work this is a fact
Another £200 billion a year is gifted from the old to the less old

People especially wealthy people just dont like to brag or show off
Many of the millionaires i know you couldn't tell they were, one in fact almost looks homeless still rocking a jacket he bought 30-40 years ago :eek:

I'm fully aware wealth exists. The issue is you're trying to claim that the top 10-15% is average. You're so out of touch its unreal. Also you have no idea about how much i have or my friends & family. I actually do know a fair few high earners. One of my friends does have a 2nd house which he rents out (technically its not a 2nd as he's just living with current OH in her house) and he's one of the lower earners. I couldve chose to have a 2nd house as i didnt need to sell my last one but opted against it as didnt want the hassle. A work collegue got shot of theirs as it was losing them money.

The original topic was about youngster getting on the ladder and you're now going on about inheritance. How old do most receive that? I reckon 50's & 60's.
My mother has just received hers at the age of 64. Now i may get a chunk of that once property has sold, but i've been a property owner for 16 or 17 years now.

And your new car comment, how many are bought outright? Most are either leased or on finance. Some would say one of the reasons many youngsters cant afford a house cos they're spending it on cars but thats another debate.

GreatApe

lisyloo wrote: »

They can’t take it with them but some with spend money on care and 30% don’t own houses.

Also some of us won’t be on a position for it to help us with housing.
I’ve paid off my mortgage and still haven’t had an inheritance yet (not the least bit bothered).

So remove the 30% that never own, take off what’s spent in care and bear in mind some with be in their 50s/60s/70s when inheriting.

A long way off the majority getting a house.

I don’t agree with the vast majority.

A couple have 4 sets of grand parents

On average there is a 99.2% chance that at least one set of grand parents own their own home (1-(0.3^4))= 99.19%

99.2% is the vast majority

Some 70% will inherit or be gifted the capital for not just 1 home but 2 homes as homes are only about half the wealth gifted/inherited

As for the fact that some people will inherit late in life, sure but some inherit in their 20s. Also it means you can save less for a pension and use those funds now. Or you can buy a small house and upgrade when you get the inheritance later. Whatever the case may be getting gifted hundreds of thousands of pounds at whatever age is better than getting nowt and fortunately the vast majority do inherited and get gifted wealth

GreatApe

Zero_Sum wrote: »

I'm fully aware wealth exists. The issue is you're trying to claim that the top 10-15% is average. You're so out of touch its unreal. Also you have no idea about how much i have or my friends & family. I actually do know a fair few high earners. One of my friends does have a 2nd house which he rents out (technically its not a 2nd as he's just living with current OH in her house) and he's one of the lower earners. I couldve chose to have a 2nd house as i didnt need to sell my last one but opted against it as didnt want the hassle. A work collegue got shot of theirs as it was losing them money.

The original topic was about youngster getting on the ladder and you're now going on about inheritance. How old do most receive that? I reckon 50's & 60's.
My mother has just received hers at the age of 64. Now i may get a chunk of that once property has sold, but i've been a property owner for 16 or 17 years now.

And your new car comment, how many are bought outright? Most are either leased or on finance. Some would say one of the reasons many youngsters cant afford a house cos they're spending it on cars but thats another debate.

There is no 'ladder' there never was a 'ladder'

The typical house buyer has only ever purchased 2 homes in their life with a gap of ~23 years between the first and second purchase. That is a housing 'step' not a ladder

And despite your protests that homes are unaffordable we have home ownership in nominal terms as high as it has ever been and in relative terms for uk born brits its very close to as high as its ever been

And 2017 saw a decrease in private renting and a big increase in home ownership (~250,000)
2018 data not yet out but likely the same again