Should I LET My House?

fc123

macaque wrote: »

FC123

Thanks for this response. I suspect many on this website have marked me down as a disgruntled buyer in waiting. This is not the case. I am a long term renter and very happy with this arrangement. As for age, I am one of the older contributers.

What concerns me is the effect of high land/house prices on the economy. UK companies are selling their factories for housing developments and using the money to build shiny new factories in other parts of the word. I am also deeply unimpressed by the way many younger people are being duped into paying unrealistic prices for homes.

We cannot have an economy where half the population sit around living off BTL and MEW whilst the other half work 18 hours a day trying to compete with the rest of the world. Some call this the 'post industrial economy' but it is nothing more than a fantasy. Within the next few years, unemployment will yet again become the UK government's biggest problem.

A decade ago Gordon Brown knew that high prices would be bad for the economy. In his 1997 budget speech he stated; "I will not allow house prices to get out of control". Instead of acting on his word, he made high house prices the central theme of new labour policy. To feed the monster he fostered BTL, loose money and mass immigration. House price inflation was the fuel for bribing voters, increasing the tax take and funding unsustainable private and public sector spending. We now have overpopulated island in a sea of debt and collapsing productivity.

The money from nothing economy I guess! Thanks for reply...apologies to OP for hijacking the thread. We make things and sell them....outdated business model!!
PS; You forgot to add in the percentage of the population who don't contribute at all.

IveSeenTheLight

macaque wrote: »

In a way your response carries the clue to the problem. House prices have been rising for so long that people have started to believe that house price inflation is a rule rather than a trend. That is a very dangerous state of affairs.

I have never said that house prices only ever go up, please do not insinuate I have.
I can accept and have said many times there may be a house price correction / dip / stagnation etc but I dont beleive it will be to the levels many on here believe.

macaque wrote: »

If you compare UK property with other parts of the world or other times in our history, prices are completely out of touch with reality. Prices will have to be lower in 10-25 years time or our economy will be wiped out. We cannot go on trading properties at prices which are 2 and 3 times higher than those of our economic competitors. It completely distorts labour costs.

Are you saying you believe that house prices and also wages (labour costs) need to be dramaticaly dropped to compete globally with economic competitors?

If house prices and wages drop I don't see how this sorts out your affordability problem.

macaque wrote: »

Japan had a time when they thought that house prices had no ceiling. Now they are starting to believe the opposite. For them, prices have been falling for 17 years.

I understand and I'm sure the real economists have learned very many valuable lessons from this.

Incidently, if you are an investor, maybe Japan is the place to buy
http://www.moneyweek.com/file/20244/a-bull-market-in-property-is-just-beginning---but-where.html

I've also heard Germany is worth investing in.

macaque_2

IveSeenTheLight

I have never said that house prices only ever go up, please do not insinuate I have.

You argued that the idea of lower house prices in 10 - 25 years was "caque" and your reasoning for this was:

Show me where in history has the UK house prices been lower than they were 10-25 years previously.

Long term declines in property values are not as uncommon as many think (abandoned cottages used to be a common feature of the countryside). In recent years UK property has enjoyed an unprecendented boom. This has been driven by a rising population, rising prosperity, falling interest rates, easier access to capital, favourable property taxes and speculation. We now have falling prosperity, rising interest rates, less available capital, rising property taxes and growing panic amongst overborrowed speculators. As for the population rise, this has been totally reliant on immigration. Immigration trends tend to go into reverse at times of falling prosperity and overcrowding. It is very difficult to see how the conditions for high house prices will be better in 2033 than they were in 2007.

I can accept and have said many times there may be a house price correction / dip / stagnation etc but I dont beleive it will be to the levels many on here believe.

UK property prices are wildly out of kilter with world property prices. That is just not sustainable in an increasingly globalised world.

Are you saying you believe that house prices and also wages (labour costs) need to be dramaticaly dropped to compete globally with economic competitors?

The economy has become far reliant on the proceeds of property (mortgage lenders, MEW, BTL and tax). The mortgages costs on a starter home are now £10,000 p.a. and for a large family home nearer to £100,000 p.a. This is a ridiculous. Employees either have to compensate employees with higher salaries or employees suffer a lower standard of living. Either way, UK competitiveness suffers. The cost of labour gets too high (which drives jobs overseas) and as fast as poorly educated immigrants are flooding into the UK, high quality graduates are heading the other way.

If house prices and wages drop I don't see how this sorts out your affordability problem.

Employees engaged in wealth creating jobs are having to give 35% of their salaries to the government and half of what remains to a landlord or mortgage provider. This is creating an inefficient labour market in the UK and is not sustainable.

Incidently, if you are an investor, maybe Japan is the place to buy
I've also heard Germany is worth investing in.

Japan and Germany could be good places to invest. All of these things go in cycles.