Northern England and the price crash...

ManAtHome

Generali wrote: »

Couple of questions:

Is the tap beer ok to drink or should I stick to bottled?
A pie. Is that like Beef Wellington?

1. A bit tricky - apparently they have "nuclear broon'' bottled stuff which is generally regarded as unsafe, and asking the barmaid for a "handpull" could result in serious injury (only in the posh bits though).

2. NO NO NO defintely not - you get chips and gravy with pies, mash and "avacado dip" (mushy peas) with BW.

Rachman_2

Last time, prices had hardly risen outside of the south (or bits of the North). So, all that happened was properties failed to sell or were knocked back a bit.

This time, the house have tripled (as a gross generalisation !) and cost a lot more in terms of wages multiples - and the prevalence of new cars etc. outside new houses is frightening, when you consider average wages.

This time, if the market goes, there are likely to be large falls in the North - not least because they now have much further to fall.

MissMoneypenny

Rachman wrote: »

Last time, prices had hardly risen outside of the south (or bits of the North). So, all that happened was properties failed to sell or were knocked back a bit.

This time, the house have tripled (as a gross generalisation !) and cost a lot more in terms of wages multiples - and the prevalence of new cars etc. outside new houses is frightening, when you consider average wages.

This time, if the market goes, there are likely to be large falls in the North - not least because they now have much further to fall.

They went up 4 or 5 times in 10 years, in the parts of Yorkshire I lived in. Now they seem to be dipping slightly, but an unbelievable amount are trying to sell. The unskilled in those areas had work in the greenhouses and two low grade, nearby prisons, so very low pay for them. At least they will need more staff in those prisons when they start to fill up with those that committed fraud to get a mortgage.

Turnbull2000

The young (22) lad who I work with is quite desperate to get onto the ladder. I've explained to him how the market works, why I believe we've reach a peak and why prices will stop racing ahead or even fall. I didn't encourage not to buy at all, but to at least avoid certain property types. My advice for his low budget was a terrace.

But it's all gone in one ear and out the other.

With the help of deposit courtesy of his father he's looking at a new build 2 bedroom flat in the Tyne and Wear area. I told him this was risky and new builds tend to devalue once used, but his reply was "but house prices don't really drop, do they". He also doesn't want the trouble of decorating. The only advice he's seemingly taken heed of is not to go interest only.

Guy_Montag

Generali wrote: »

North East:

Unemployment = 6.6% (link)
Proportion of people of working age on incapacity benefit = 10.2% (link)
Proportion of people working in the public sector = 24% (link)

South East:

Unemployment = 4.4% (link)
Proportion of people of working age on incapacity benefit = 5.4% (link)
Proportion of people working in the public sector = 18% (link)

*snipped*

I have nothing against the NE. In fact I plan to take a holiday in the NE this year. The fact remains that they have little private economy and are extremely vulnerable to cuts in govt spending.

Hard to say exactly how true a a picture this gives - as someone else pointed out does someone building the new Wembly stadium or Crossrail count as a public employee? They are paid, indirectly, by HM Govt., but they are employed by some private company. What about all those involved in that amateur athletics meet in a couple of years?

Similarly there haven't been many heavy industry jobs in the South for generations, while here we have the human effects of hard work in shipyards & mines to deal with. A fair number of those on invalidity benefit will be suffering from severe effects of a half-a-life in the mines.

However, having said all that, there is a problem here - a problem of education & lack of aspiration. As I'm sure regular readers remember, I've suggested the best thing for the NE is to remove all or most business rates & taxes from the area. In the same way HM. Govt did to get Canary Wharf off the ground.

Gen, if you do come up here, let me know I'll meet you for a drink or two.

Guy_Montag

mitchaa wrote: »

Surely its property prices in the south that are going to plummet? Why are people thinking north? Its in the south that they are vastly over inflated.

An ordinary 3 bed semi detached home in areas of London/Surrey may fetch £500,000 on average. Average salary may be slightly higher at £35k (multiple of over 14x)
The same 3 bed semi detached home in areas of the north, Manchester, Leeds etc may fetch £250k on average with an average wage of £25k (Multiple of 10x)

So its far more affordable to live in the north even taking into consideration higher salaries in the south.

I cannot see for the life of me why anyone north of Birmingham is going to worry about a supposed crash.

Its the stupid that forked out £300k for 1 bedroom broom cupboards in the capital that should be quaking in their boots.

Additionally, up in Scotland, property is still booming:D No signs of any dramatic crashes up here (Aberdeen)

Aberdeen is a bit special though, wait until
1) Price of oil drops to $50 a barrel or less
2) you run out of it in the North Sea.

Gorgeous_George

Turnbull2000 wrote: »

The young (22) lad who I work with is quite desperate to get onto the ladder. I've explained to him how the market works, why I believe we've reach a peak and why prices will stop racing ahead or even fall. I didn't encourage not to buy at all...

Maybe this will help him



GG

Generali

Guy_Montag wrote: »

Hard to say exactly how true a a picture this gives - as someone else pointed out does someone building the new Wembly stadium or Crossrail count as a public employee? They are paid, indirectly, by HM Govt., but they are employed by some private company. What about all those involved in that amateur athletics meet in a couple of years?

I agree absolutely and these things are less than an exact science. I would say that a public sector employee is one directly employed by local or national government or a company working for them.

Wembly wouldn't count (The FA is a private body), Crossrail doesn't but should (Network rail is a private 'not for profit' company - !!!!!! is a company for except to make a profit?), NRK counts (I think).

Guy_Montag wrote: »

However, having said all that, there is a problem here - a problem of education & lack of aspiration. As I'm sure regular readers remember, I've suggested the best thing for the NE is to remove all or most business rates & taxes from the area. In the same way HM. Govt did to get Canary Wharf off the ground.

You've hit the nail on the head old chap. If you've got a bit of gumption, you're 22 and want to 'seek your fortune' then are you going to hang about watching your mates from school sign on or taking minimum wage 'jobs' with some make work Govt agency? I wouldn't.

However, if you say to people if you start a company in the NE we'll let you off employers NI, you pay half corporation tax and no CGT from now until 2018 then you won't be able to move for people trying to make their fortune and in doing so employing a lot of people and helping them pull themselves up too.

Guy_Montag wrote: »

Gen, if you do come up here, let me know I'll meet you for a drink or two.

Love to - it'd be good to catch up. I understand that some lovely beaches are in the NE of England and I'd like to take my (Aussie) wife, Mrs Generali, and the Generalissimos to see them. Any advice?

I'll PM you once I've had my jabs.

IveSeenTheLight

Guy_Montag wrote: »

Aberdeen is a bit special though, wait until
1) Price of oil drops to $50 a barrel or less
2) you run out of it in the North Sea.

Spoken like someone who has no idea of the oil industry.
They've been saying oil will dry up since the 70's.
Technology advances, wells not worth developing in the past now are.
I've seen the forecasts for the next three years and they currently are all looking up.
There's huge potential for the Atlantic Ocean which has hardly been touched.
Mainly because of the deep water, but like I said before, the technology is available now to tap into that market.

Turnbull2000

Gorgeous_George wrote: »

Maybe this will help him



GG

Well, his father's gift of 50K will certainly be helpful in a downturn! Another lad I know pocketed 60K in parental assistance, and both persist in asking when I'll be investing in property and stop wasting money on rent - even though I have to stand on my own two feet and financed my own way through university.

Nothing has changed despite NR and negative media coverage. Everyone else still believes property is a one way bet and prices simply cannot fall. A two bed Barett Homes flat is regarded as a "great investment", and yes, he is going ahead. He intends to sell in 3 years and pocket the profit, but if he stuggles to get rid, they all agreed he can simply hold onto and rent out. You cannot lose.

Earning more, being smarter and working harder is no longer the key to financial well-being. It's having wealthy parents that counts.