Debate House Prices


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Telegraph - Why is everyone worried about house prices?

First the Herald, then the Guardian, followed by the Times and now the Telegraph. Anybody noticed a recurring theme here? I'd like to applaud them, but they're 5 years too late.

Telegraph - Why is everyone worried about house prices?
If you study media reporting of our current economic discontents, you notice something strange. Rising fuel costs, utility bills, startling food price increases are represented as bad. But house price increases are considered good.

The headlines about the housing market are all about falling prices, and they invariably contain words like "gloom". Why? Gloom for whom?
The social benefit of property ownership is that it meets the human need for security and the human aspiration to rise in the world and establish oneself and one's family. Soaring property prices kill both these things for the majority: they are a social curse.They have been brought about by us baby-boomers, the most selfish generation in human history
So when the signals from the housing market at last tell us loudly and clearly that it is time to stop, why protest? It is crazy that people want Gordon Brown to "get the housing market going again". The best "help" for first-time buyers is not special subsidy, but saner prices.
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Comments

  • PasturesNew
    PasturesNew Posts: 70,698 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    If houses weren't so expensive, rents wouldn't be so high ... and this would mean that it would be more achievable for more people to get off benefits and into work.

    Generally, over the last 10 years, many salaries haven't increased, they've dropped. Higher paying jobs have disappeared, to be replaced by automated electronic and online jobs, paying minimum wage or close to it.

    In an increasing number of towns around the country, for many young people, they start out not really seeing the point as they can't see that they would ever progress because of the crippling overhead of renting - and home ownership was snatched from their hands no matter what they tried.

    As a single person, if you're not working, you could find yourself in a £500 flat with £100 council tax. Throw in a spot of JSA at £250/month and straight away you'd have to consistently bring home £850/month to match the most basic of benefits/subsistence levels.

    £250/month might be enough to pay the bills if you're careful, but not enough for an actual life, with hobbies and holidays.

    If you work, you then have to clothe yourself appropriately and travel to work. Travel alone might be adding £60-100/month to your bill, so before you know it you have to be bringing home £1000/month to be able to pay what benefits would.

    But how many people are unable to earn £1000/month? That is £16,000 a year - a salary many will never achieve. And it's not always a matter of working harder, sometimes it's just not possible due to a myriad of limiting factors.

    If house prices were half what they are, then rents would also be able to fall... freeing up a cash difference enabling low paid people in high rent areas to find that suddenly working IS beneficial.

    HPI has a lot more to answer for than just high house prices and high overall indebtedness of people with mortgages.
  • Pobby
    Pobby Posts: 5,438 Forumite
    Darn good post if I may say so Pastures New.
  • m00m00
    m00m00 Posts: 1,755 Forumite
    it's not an 'alleged' fall, it's clearly observable by all but the most blinkered.
    It's a health benefit ...
  • I wonder how much of the alledged fall in house prices is due to the media whipping everyone up into a frenzy, including the estate agents?

    Er ... none at all actually.
  • If houses weren't so expensive, rents wouldn't be so high ... and this would mean that it would be more achievable for more people to get off benefits and into work.

    Generally, over the last 10 years, many salaries haven't increased, they've dropped. Higher paying jobs have disappeared, to be replaced by automated electronic and online jobs, paying minimum wage or close to it.

    In an increasing number of towns around the country, for many young people, they start out not really seeing the point as they can't see that they would ever progress because of the crippling overhead of renting - and home ownership was snatched from their hands no matter what they tried.

    As a single person, if you're not working, you could find yourself in a £500 flat with £100 council tax. Throw in a spot of JSA at £250/month and straight away you'd have to consistently bring home £850/month to match the most basic of benefits/subsistence levels.

    £250/month might be enough to pay the bills if you're careful, but not enough for an actual life, with hobbies and holidays.

    If you work, you then have to clothe yourself appropriately and travel to work. Travel alone might be adding £60-100/month to your bill, so before you know it you have to be bringing home £1000/month to be able to pay what benefits would.

    But how many people are unable to earn £1000/month? That is £16,000 a year - a salary many will never achieve. And it's not always a matter of working harder, sometimes it's just not possible due to a myriad of limiting factors.

    If house prices were half what they are, then rents would also be able to fall... freeing up a cash difference enabling low paid people in high rent areas to find that suddenly working IS beneficial.

    HPI has a lot more to answer for than just high house prices and high overall indebtedness of people with mortgages.

    That is exactly why I am in the position I am and I am no underachieving bum with no qualifications from a sink estate. I have 2 university degrees (1 undergrad and 1 postgrad), but to go with them I have a useless piece of paper which is worth jack and a debt that will need to be paid off.

    indeed the baby boomers have been the most selfish generation ever, they have robbed us on houseprices, got their education for free but told our generation to pay for ours and now we will have to work till we are 70 to pay for their pensions and our own which will no doubt be at levels less than they have recieved.
  • Great post PasturesNew.

    The problem is that benefits are too high.

    Reduce the benefits and workers would be able to keep more of their earnings.

    Stop giving slappers houses and a meal ticket for having babies we don't need and maybe more rentals would come to the market driving rents lower.

    Stop incapacity benefit for the majority of claimants. I see people in wheelchairs, crippled from birth, doing great work. How some of the claimants dare to walk the streets with walking sticks for show only is beyond me. I know they are cheating the system.

    The difference between working for minimum wage and claiming benefits must be increased. Lower benefits will make life a little fairer.

    GG
    There are 10 types of people in this world. Those who understand binary and those that don't.
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    Brilliant post PasturesNew. Absolutely spot on.

    I lived next door to a single mother for a while. There was no way that she could afford to work. It was a crazy situation - she was climbing the walls stuck at home but the benefits system meant that if she went to work and tried to make a career for herself then she'd lose her home, in effect.

    Benefits Blagger - the chances of anyone under the age of about 40 ever receiving anything like a livable amount of money before they reach their 75th birthday as a state pension are approximately nil IMO.
  • ps646566
    ps646566 Posts: 69 Forumite
    indeed the baby boomers have been the most selfish generation ever, they have robbed us on houseprices, got their education for free but told our generation to pay for ours and now we will have to work till we are 70 to pay for their pensions and our own which will no doubt be at levels less than they have recieved.

    I can see the point here, but I don't think baby boomers solely can be blamed. People of all generations have allowed themselves to be talked into paying ever higher prices by estate agents and others who have a vested interest in continual house price inflation. Likewise people of all ages have duped themselves into believing that increased value of their house makes them better off in a tangible way, even though its an asset they cannot realise for a very long time, if ever. Also the ever-increasing population, thanks to New Labour's policy of unrestricted immigration, has contributed to demand exceeding supply which always tends to result in higher prices.

    As far as education and pensions are concerned, I think it's specifically the New Labour baby boomers that are to blame. We did not all agree with the social engineering, anti-elistist policy of trying to put vast numbers through higher education to gain meaningless degrees which help nobody including themselves. The result is that the genuine academically gifted who would have benefited from free education in the 1960's or 70's now have to pay for it.

    The pensions fiasco is partly down to the reality of increased longevity and the fact that the stock market, like the housing market, has shown itself not to be the ever-rising entity that many liked to think it was. Nevertheless it is New Labour that has allowed many private firms to rip off their employees regarding pensions, whilst protecting the inflation-proof final salary pensions of public sector employees who form an important part of the client state from which it continually attempts to buy votes with our money.

    Baby boomers might be selfish, but we do not all like the way in which the younger generation is being disadvantaged in ways which we were not.
    I blame Blair
  • fc123
    fc123 Posts: 6,573 Forumite
    That is exactly why I am in the position I am and I am no underachieving bum with no qualifications from a sink estate. I have 2 university degrees (1 undergrad and 1 postgrad), but to go with them I have a useless piece of paper which is worth jack and a debt that will need to be paid off.

    indeed the baby boomers have been the most selfish generation ever, they have robbed us on houseprices, got their education for free but told our generation to pay for ours and now we will have to work till we are 70 to pay for their pensions and our own which will no doubt be at levels less than they have recieved.
    I no longer waste precious, emotional energy on anything / anyone other than close family.......esp. on internet forums...but you REALLY p1$$ me off.

    Atlee and those that created the welfare state had no idea that the recipients of this much needed (at the time) safety net would be people like you.
    My grandfather remembers his taxes going from 10% to half his salary but didn't mind. (That's what he told me, I'm not a historian so exact figures may be different)
    When he was old and confused, he couldn't understand why he had to sell the house and use his savings for care...I remember visiting him and he was saying 'But Atlee promised us, I've paid already, why do I have to sell?'.

    You may laugh at that generation as you reap a free life from their labour and sacrifice, and laugh at muggins me, working all hours to pay my own way plus the taxes that prop up your lifestyle....laugh away and continue bragging about your hundred grand (or whatever) in the bank...the welfare state will be the next thing to breakdown. Give it a decade.

    I can't even be sure that you will ever get your 'comeuppance' either...so I'm not wasting any more energy on this post.
  • geoffky
    geoffky Posts: 6,835 Forumite
    did i miss something here????
    It is nice to see the value of your house going up'' Why ?
    Unless you are planning to sell up and not live anywhere, I can;t see the advantage.
    If you are planning to upsize the new house will cost more.
    If you are planning to downsize your new house will cost more than it should
    If you are trying to buy your first house its almost impossible.
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