Slum Britain

macaque_2

How many people see their property as their pension? The answer is millions. They continue to buy property despite precipitate falls in yields and near zero opportunities for capital gains. Why is this? I suspect there are three reasons:

(1) The trend of rising prices has lasted for so long that people have started to confuse rules with trends.

(2) The government keep hinting that the population will continue rising by 0.5 million a year. This propaganda lubricates the BTL machine (thereby stimulating spending). People fail to recognise that overcrowding itself will ultimately drive the population trend into reverse. The infrastructure is already creaking badly. Today, we have record class sizes and one in five UK schools don't have a permanent headmaster. Immigrants live 5 to a room and the NHS need almost as many interpreters as they have doctors.

(3) There is a belief that a rising population guarantees rising house prices. Wrong! To have rising house prices, you need stable incomes with rising populations or stable populations with rising incomes. Rising populations with falling incomes, adds up to rising squalor. Incomes in the UK are already being driven down by immigration. Could you honestly see a Labour chancellor (at a time of rising inflation) trying to stuff a 3 year 2% pay deal down the throats of the public sector 30 years ago?

By all means go on investing all your money in property but in my view you are investing in 'Slum Britain'. There better things to aspire to than becoming a slum landlord.

Running_Horse

Where would you invest your money?

merlinthehappypig

macaque wrote: »

Could you honestly see a Labour chancellor (at a time of rising inflation) trying to stuff a 3 year 2% pay deal down the throats of the public sector 30 years ago?

My dad reckons that every recession or period of severe financial problems in his memory of the last 70 years or so, has always been preceded by the Government starting talking about restricting public sector pay. He says he knows things have got bad when that happens.

clutton_2

""Immigrants live 5 to a room"" this may have been the case - this is why the 2004 Housing act was brought in, and why the complex HMO regulations have been brought in, and, landlords of slum properties 5 to a room (or whatever), have already been fined £20,000 for overcrowding and ignoring the regs.

david29dpo

May have something to do with incompetent pension companies?

pinkshoes

Well, let me see...

I have 2 sets of grandparents:

Grandparents A own their property (mortgage free) and spend their pension on holidays, nice furniture, and inviting all us lot round for family parties.

Grandparent B lived in a rented tiny 2 up 2 down terrace which ate up most of her pension (no council properties came free in the 10 years she was on the list, despite severe arthritis and having a VERY steep staircase which she crawled up each night!), and after paying for bills, food etc... she was left with very little. I don't think she's had a holiday for 25 years, which is about the same age as the furniture in the house too! She now lives in a state nursing home, and after fees, her pension leaves her with about £15 - £20 a week, which pays for a hair cut, some fruit, and a little left over to save for birthdays/xmas.

So you're now trying to telling us that owning a property ISN'T a good substitution for a pension?? Well I know which scenario out of the above 2 that I tend to be in when I retire! And if I have a 2nd property where the rent pays the mortgage, then who cares what it's worth when I retire, because something is better than nothing!

HugoSP

Not all landords are slum landlords.

Lotus-eater

merlinthehappypig wrote: »

My dad reckons that every recession or period of severe financial problems in his memory of the last 70 years or so, has always been preceded by the Government starting talking about restricting public sector pay. He says he knows things have got bad when that happens.

As soon as I heard this on the news, thats exactly what I thought as well, he knows something bad is coming and is trying to batten down the hatches, just like when he advised people of the likelyhood of falling property prices a few weeks ago. We are slowly being conditioned to expect the worst. With the prices of heating oil and petrol going through the roof for us, we have already noticed our costs are going up rapidly and are seriously into emergency spending cuts to hopefully help us in the future.

macaque_2

pinkshoes wrote: »

Well, let me see...
I have 2 sets of grandparents:
Grandparents A own their property (mortgage free) and spend their pension on holidays, nice furniture, and inviting all us lot round for family parties.
Grandparent B lived in a rented tiny 2 up 2 down terrace which ate up most of her pension (no council properties came free in the 10 years she was on the list, despite severe arthritis and having a VERY steep staircase which she crawled up each night!), and after paying for bills, food etc... she was left with very little. I don't think she's had a holiday for 25 years, which is about the same age as the furniture in the house too! She now lives in a state nursing home, and after fees, her pension leaves her with about £15 - £20 a week, which pays for a hair cut, some fruit, and a little left over to save for birthdays/xmas.
So you're now trying to telling us that owning a property ISN'T a good substitution for a pension?? Well I know which scenario out of the above 2 that I tend to be in when I retire! And if I have a 2nd property where the rent pays the mortgage, then who cares what it's worth when I retire, because something is better than nothing!

Pinkshoes;
This is not a very thoughtful response. A home can be a home or an investment. As soon as you try to realise its value as an investment however it ceases to be a home. Your 'grandparents A' did not use their home as a pension, they used it as a home. Your 'grand parent B' was poor. To compare their respective fortunes you need to consider:

(1) How much money they had to invest
(2) How well they invested it.

The quality of a home as an investment (like any investment) is dependant on the purchase price, the selling price and the income (or liabilities) it enjoys in between. Right now the prospects for property as an investment look pretty sick. It is also a fact that, over the long term, equities tend to outperform property.

clutton
"Immigrants live 5 to a room" this may have been the case - this is why the 2004 Housing act was brought in, and why the complex HMO regulations have been brought in, and, landlords of slum properties 5 to a room (or whatever), have already been fined £20,000 for overcrowding and ignoring the regs.

I could be wrong but my understanding is that the problem is worse than ever. Landlords don't let out at 5 to a room but the immigrants fill the rooms up themselves (how else can they afford London rents on a cleaner's salary)

david29dpo
May have something to do with incompetent pension companies?

I not only agree with this but I would go further. Pension companies create complex and opaque reporting methods to hide incompetance and management costs from pension contributers. The government has been ridiculously soft on abuses of this sort.

itsgototstop

macaque wrote: »

Pinkshoes;
It is also a fact that, over the long term, equities tend to outperform property.



Hi, I'm very surprised by this, over a ten or twenty year period say where does it prove this?

fc123

merlinthehappypig wrote: »

My dad reckons that every recession or period of severe financial problems in his memory of the last 70 years or so, has always been preceded by the Government starting talking about restricting public sector pay. He says he knows things have got bad when that happens.

My dad too...his thoughts on what the future holds are quite depressing!!!!