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Jesusaves

Why Should Houses Be Affordable?

164 posts in this topic

[quote name='codeine' date='18 November 2009 - 09:51 PM' timestamp='1258581081' post='2251666']
:lol: :lol: :lol: :lol:

Japan has limited space - and prices there have been falling for the past TWELVE years.

You made money through property because of the boom. (or paper inflation money, can't see any dates on your post)
Try it again these days - I suggest investing in some new build city centre flats.
Then you might see that the party is over.

Next leg down is due in the next few months.

"So get out there and buy"

Is your branch desperate for sales then?
[/quote]

The land space argument, just like the low employment chestnut branded about pre 2007 is a false one, and just the excuse required to pave over the uk with gay abandon.

There's many a reason why house prices are 70% overvalued, land space/supply isn't one of them.

Did the UK population jump 20 million from 2000 - 2005?!? ffs.

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[quote name='PopGun' date='19 November 2009 - 02:47 PM' timestamp='1258642023' post='2252928']
The land space argument, just like the low employment chestnut branded about pre 2007 is a false one, and just the excuse required to pave over the uk with gay abandon.

There's many a reason why house prices are 70% overvalued, land space/supply isn't one of them.

Did the UK population jump 20 million from 2000 - 2005?!? ffs.
[/quote]

Yep - totally reckless to expand the population without considering how the infrastructure would cope.

Also reckless selling off the gold cheap and destroying pensions. But, there you go, that's socialists for you!

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[quote name='Jesusaves' date='18 November 2009 - 09:23 PM' timestamp='1258579433' post='2251617']
But, my first house cost 20K. My salary was 4300 pa. Interest rates were at 12% (I think-something like that). I crapped myself as had just got married and had a kiddly on the way. But I got by (just).

Sold the house 4 years later for 22K, banked £2000 and felt really rich. Bought my next house for 32K and sold it for 45K. And so on. I was always close to the edge and worried about paying the mortgage, but managed it. Times were always hard and budgeting difficult. That's why I don't see myself as selfish. And, lets face it, when you die a big chunk goes back to the state anyway.

I didn't grow up in a golden age. BUT - eventually you reach a turning point; somewhere along the line, where your repayments seem to diminish and your assets appreciate.

To be perfectly frank, the only way to accumulate wealth in this country is through property.

So, go on, be an entrepreneur and create some wealth for yourself.

It's easy being a socialist when you don't own anything.
[/quote]

yes but the asset will only 'appreciate' if :

1) the credit is there to supply the price demanded

or 2) wage inflation occurs to supply the money necessary to buy this asset i.e. wage increases well above inflation

Well 2) isn't going to happen due to globalisation (different days to when you bought your 20K house), so the only mechanism left to drive HPI is a return to subprime lending. There is no other way.

Take a look at the employment situation for the young - who's going to drive this growth?

So I'm afraid I don't agree with your idea of 'creating wealth' via real estate in the UK because quite simply I don't think it will happen for a very long time. And in the meantime, the money you tie up in a mortgage can be working much harder for you.

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[quote name='zilly' date='19 November 2009 - 02:54 PM' timestamp='1258642440' post='2252940']
yes but the asset will only 'appreciate' if :

1) the credit is there to supply the price demanded

or 2) wage inflation occurs to supply the money necessary to buy this asset i.e. wage increases well above inflation

Well 2) isn't going to happen due to globalisation (different days to when you bought your 20K house), so the only mechanism left to drive HPI is a return to subprime lending. There is no other way.

Take a look at the employment situation for the young - who's going to drive this growth?

So I'm afraid I don't agree with your idea of 'creating wealth' via real estate in the UK because quite simply I don't think it will happen for a very long time. And in the meantime, the money you tie up in a mortgage can be working much harder for you.
[/quote]

Very good points.

I am possibly completely wrong and out-of-touch, and only too happy to accept that.

I guess the only way property is going to be easily available again, is, if the population is actually halved.

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[quote name='Jesusaves' date='19 November 2009 - 02:44 PM' timestamp='1258641848' post='2252923']
20K of debt is nothing for 3 years of post-18 education.

You sound like the World owes you a living.

If nothing else this recession is about shaking out jobs-worth and inefficiency. The current Government is tinkering and electioneering, but the shake-out will come.

I don't understand what you want? You seem to despise excessive state interference / political correctness, in the way you want to live your life, but scared of Darwinian economics. Or perhaps you want both - ie, owed a living!

You can't have one without the other.
[/quote]


you seem to have read something I didn't write

I am not one of those 20-somethings

Furthermore I am neither as blinkered nor as specious as you

You're right that we are having a necessary recession - politically I am possibly not so far from you

however your accusation that others expect to be owed a iving is nothing short of projection going off this thread and the OP

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[quote name='Jesusaves' date='19 November 2009 - 02:44 PM' timestamp='1258641848' post='2252923']
[b]20K of debt is nothing for 3 years of post-18 education.[/b]

You sound like the World owes you a living.

If nothing else this recession is about shaking out jobs-worth and inefficiency. The current Government is tinkering and electioneering, but the shake-out will come.

I don't understand what you want? You seem to despise excessive state interference / political correctness, in the way you want to live your life, but scared of Darwinian economics. Or perhaps you want both - ie, owed a living!

You can't have one without the other.
[/quote]

Is that you Laurie John?

If not than can I ask you a question..how much average debt was aquired by graduates of your generation upon gaining post 18 education?

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[quote name='Jesusaves' date='19 November 2009 - 02:53 PM' timestamp='1258642422' post='2252939']
Yep - totally reckless to expand the population without considering how the infrastructure would cope.

Also reckless selling off the gold cheap and destroying pensions. But, there you go, that's socialists for you!
[/quote]

It is you LJ isn't it?

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[quote name='Jesusaves' date='18 November 2009 - 09:23 PM' timestamp='1258579433' post='2251617']
But, my first house cost 20K. My salary was 4300 pa. Interest rates were at 12% (I think-something like that). I crapped myself as had just got married and had a kiddly on the way. But I got by (just).

Sold the house 4 years later for 22K, banked £2000 and felt really rich. Bought my next house for 32K and sold it for 45K. And so on. I was always close to the edge and worried about paying the mortgage, but managed it. Times were always hard and budgeting difficult. That's why I don't see myself as selfish. And, lets face it, when you die a big chunk goes back to the state anyway.

I didn't grow up in a golden age. BUT - eventually you reach a turning point; somewhere along the line, where your repayments seem to diminish and your assets appreciate.

[b]To be perfectly frank, the only way to accumulate wealth in this country is through property.[/b]

So, go on, be an entrepreneur and create some wealth for yourself.

It's easy being a socialist when you don't own anything.
[/quote]


I wouldn't go that far. An oil exploration company called Gulf Keystone Petrolium recently struck oil in Iraq. The SP has risen ten-fold since August. A nice 10 bagger for a few months work. Not bad. :) Edited by Wait & See

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[quote name='Si1' date='19 November 2009 - 03:00 PM' timestamp='1258642837' post='2252959']
you seem to have read something I didn't write

I am not one of those 20-somethings

Furthermore I am neither as blinkered nor as specious as you

You're right that we are having a necessary recession - politically I am possibly not so far from you

however your accusation that others expect to be owed a iving is nothing short of projection going off this thread and the OP
[/quote]

OK

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[quote name='PopGun' date='19 November 2009 - 03:03 PM' timestamp='1258643031' post='2252972']
It is you LJ isn't it?
[/quote]

Very naughty to 'out' someone!

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[quote name='Si1' date='19 November 2009 - 03:00 PM' timestamp='1258642837' post='2252959']
you seem to have read something I didn't write

I am not one of those 20-somethings

Furthermore I am neither as blinkered nor as specious as you

You're right that we are having a necessary recession - politically I am possibly not so far from you

however your accusation that others expect to be owed a iving is nothing short of projection going off this thread and the OP
[/quote]

70% of communication is 'non-verbal', so easy to miss-understand I guess, on any forum.

I didn't want to make the assumption that you were a 20 something, but possibly gave that impression.

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[quote name='Jesusaves' date='19 November 2009 - 03:13 PM' timestamp='1258643587' post='2253001']
70% of communication is 'non-verbal', so easy to miss-understand I guess, on any forum.

I didn't want to make the assumption that you were a 20 something, but possibly gave that impression.
[/quote]


ah....

fair enough, no worries

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[quote name='PopGun' date='19 November 2009 - 03:00 PM' timestamp='1258642844' post='2252960']
Is that you Laurie John?

If not than can I ask you a question..how much average debt was aquired by graduates of your generation upon gaining post 18 education?
[/quote]

I have to admit that I left Uni with no debt. But, I also got very little support, apart from the tuition fees paid.

I worked 72 hour weeks every summer holidays , non stop for 13 weeks. Did this for 4 summers. The money I saved just about kept me going over the next year. It was hard manual labour.

But, I've paid for my kids fees and accomodation (and still paying), so had a double whammy! Paid for min and paid for my kids.

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[quote name='Jesusaves' date='18 November 2009 - 09:23 PM' timestamp='1258579433' post='2251617']


To be perfectly frank, the only way to accumulate wealth in this country is through property.

So, go on, be an entrepreneur and create some wealth for yourself.

[/quote]

You don't create any wealth by holding on to real estate for a price rise, you only add extra costs for others

In fact, those extra costs created by all the real estate vampirism in the uk are the reason people can't make money doing the things that [i]do[/i] actually create wealth - all the surplus wealth is sucked up into the real esatea market. Edited by Stars

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[quote name='Jesusaves' date='19 November 2009 - 02:58 PM' timestamp='1258642691' post='2252953']

I guess the only way property is going to be easily available again, is, if the population is actually halved.
[/quote]

Well the price of a pile of bricks is only inflated by the inflation of the money available to buy it.

Whether or not there is shortage of supply is really quite irrelevant at these levels. People can rent..!

The shortage of supply and overpopulation in Japan didn't stop them from having a decade long housing slump. Shortage of supply was also given as a reason at the end of the 80s as to why prices wouldn't go down, but they did.

It quite simply is a matter of what can be afforded - particularly at the bottom end of the market.

And quite simply now that the facility of, well, lying about one's income during mortgage application, I simply don't see how current levels can be sustained (particularly when interest rates start to rise and inflation hits against a backdrop of static wages), let alone subscribe to the 'trees will grow to the sky due to lack of supply' argument.

Anyway, time will tell.

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[quote name='zilly' date='19 November 2009 - 03:29 PM' timestamp='1258644564' post='2253039']
Well the price of a pile of bricks is only inflated by the inflation of the money available to buy it.

Whether or not there is shortage of supply is really quite irrelevant at these levels. People can rent..!

The shortage of supply and overpopulation in Japan didn't stop them from having a decade long housing slump. Shortage of supply was also given as a reason at the end of the 80s as to why prices wouldn't go down, but they did.

It quite simply is a matter of what can be afforded - particularly at the bottom end of the market.

[/quote]

It appears to be a matter of 'what can be afforded' because there is land under the bricks and the price of land is set by the utility of land. If the land has little utility to people (low wages for instance)it will have a low price. If you were really talking about the price of a pile of bricks, the price would be set at the cost of production and wages etc would be nearly irrelevant.

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[quote name='Jesusaves' date='18 November 2009 - 06:57 PM' timestamp='1258570648' post='2251349']
Why should houses be ‘affordable’? Land is a finite resource. As earnings increase so the cost of land needs to go up, because you can’t make new land. It's value reflects the wealth of the nation.

If you dismantle a property and sell the components, you will get about 20% of the properties value. But, labour is expensive. 60% of the purchase price is the cost of building. 20% becomes your profit margin.

So why should these houses be easily affordable? To own a piece of land with a dwelling needs to stretch you to breaking point.

That’s the laws of economics.

We can all wait for ever but it just ain’t gonna happen.

So get out there and buy.
[/quote]

maybe in hong kong land is finite but last time i looked there was a lot of undeveloped land in the UK......

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[quote name='Jesusaves' date='19 November 2009 - 04:18 PM' timestamp='1258643923' post='2253016']
I have to admit that I left Uni with no debt. But, I also got very little support, apart from the tuition fees paid.

I worked 72 hour weeks every summer holidays , non stop for 13 weeks. Did this for 4 summers. The money I saved just about kept me going over the next year. It was hard manual labour.

But, I've paid for my kids fees and accomodation (and still paying), so had a double whammy! Paid for min and paid for my kids.
[/quote]

Wheres my hanky?

Your kids are being taught to be spongers. Why cant they work like you did?

Or is it all 8oll4cks you post.

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[quote name='Jesusaves' date='19 November 2009 - 01:45 AM' timestamp='1258591516' post='2252014']
Yet another example of English defeatism. Always worried about what others have, rather than making your own wealth.
[/quote]

And yet it pished you off about your brother and his BTL fortune.

I think you have a problem.

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[quote name='Stars' date='19 November 2009 - 03:24 PM' timestamp='1258644250' post='2253030']
You don't create any wealth by holding on to real estate for a price rise, you only add extra costs for others

In fact, those extra costs created by all the real estate vampirism in the uk are the reason people can't make money doing the things that [i]do[/i] actually create wealth - all the surplus wealth is sucked up into the real esatea market.
[/quote]

Yes, exactly.

Let's get this straight once and for all. Who gives a crap about bulls and bears. Plenty of people here have bullish or partially bullish views and are perfectly sensible. What it comes down to is whether you think straight line positive HPI is a good thing or a bad thing. And if you think it's a good thing, stop and think why. Because there are lots of reasons why it's a bad thing.

HPI hurts everyone who is buying a property more expensive than the one they currently own (that includes FTBs). HPI helps downsizers. That's it. It's that simple. HPI takes from the young and the average and gives to the old and the wealthy. And I mean the super wealthy, not the moderately wealthy like this muppet Jesusaves.

I have made over half a million quid from HPI and I live in what most people would call a sizeable property. Do I come and gloat? No, because I am NOT better off. Because HPI has still stolen from me. I am 30 years old and will soon want a bigger house to settle down with a family. Therefore this HPI has made me poorer. Who has it made richer? Older and richer folk than myself, even though I myself am in the top 0.1% of earners.

So for anyone here to WANT HPI they must either be old (in which case they should know better than to want to deprive younger generations) or obscenely wealthy. It is a pity that there is such a lack of understanding of this in the media. All that continued HPI will do is make it harder and harder for new buyers. So people will buy later in life, at higher salary mutiples, with more debt, chaining themselves to ever larger hamster wheels in the name of social inequality. How on earth is that a good thing?

Now, I'm not pro-crash either, although I think we have already had a sizeable crash in the new build sector of the market, but I think long-run stable prices are a good thing. A further crash reduces mobility and would also hurt young people unduly since they are typically the people with least equity and highest leverage. Therefore it would be best if property prices just stayed still for ever. It won't happen, but surely it is clear why this would be a more desirable situation than huge HPI or even HPC?

Do you have children, Jesusaves? Surely you realise that your £2.2mio is bugger all in the big scheme of what they will need to be left if HPI continues?

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[quote name='Bloo Loo' date='19 November 2009 - 04:19 PM' timestamp='1258647549' post='2253129']
Wheres my hanky?

Your kids are being taught to be spongers. Why cant they work like you did?

Or is it all 8oll4cks you post.
[/quote]

Ouch - not nice.

(You forgot a question mark, incidently)

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[quote name='Bloo Loo' date='19 November 2009 - 04:21 PM' timestamp='1258647719' post='2253140']
And yet it pished you off about your brother and his BTL fortune.

I think you have a problem.
[/quote]

Why do you keep bringing this up?

I was referring to his perceived fortune by others; the reality is he owes the bank a fortune.

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[quote name='RandomBear' date='19 November 2009 - 04:23 PM' timestamp='1258647789' post='2253144']
Yes, exactly.

Let's get this straight once and for all. Who gives a crap about bulls and bears. Plenty of people here have bullish or partially bullish views and are perfectly sensible. What it comes down to is whether you think straight line positive HPI is a good thing or a bad thing. And if you think it's a good thing, stop and think why. Because there are lots of reasons why it's a bad thing.

HPI hurts everyone who is buying a property more expensive than the one they currently own (that includes FTBs). HPI helps downsizers. That's it. It's that simple. HPI takes from the young and the average and gives to the old and the wealthy. And I mean the super wealthy, not the moderately wealthy like this muppet Jesusaves.

I have made over half a million quid from HPI and I live in what most people would call a sizeable property. Do I come and gloat? No, because I am NOT better off. Because HPI has still stolen from me. I am 30 years old and will soon want a bigger house to settle down with a family. Therefore this HPI has made me poorer. Who has it made richer? Older and richer folk than myself, even though I myself am in the top 0.1% of earners.

So for anyone here to WANT HPI they must either be old (in which case they should know better than to want to deprive younger generations) or obscenely wealthy. It is a pity that there is such a lack of understanding of this in the media. All that continued HPI will do is make it harder and harder for new buyers. So people will buy later in life, at higher salary mutiples, with more debt, chaining themselves to ever larger hamster wheels in the name of social inequality. How on earth is that a good thing?

Now, I'm not pro-crash either, although I think we have already had a sizeable crash in the new build sector of the market, but I think long-run stable prices are a good thing. A further crash reduces mobility and would also hurt young people unduly since they are typically the people with least equity and highest leverage. Therefore it would be best if property prices just stayed still for ever. It won't happen, but surely it is clear why this would be a more desirable situation than huge HPI or even HPC?

Do you have children, Jesusaves? Surely you realise that your £2.2mio is bugger all in the big scheme of what they will need to be left if HPI continues?
[/quote]


It's not in my nature to gloat.

I don't see myself as particularly wealthy and have no particular desire to hang on to it, or increase it's value.

I intend to hand it over to my kids, and hopefully, they can go through life less neurotic than me. I will sell up in the next 3 years, buy a small place and give each kiddly a big handout. They're lucky and I'm soft. So be it.

I'm then going to spend 6 months each year abroad. So long as I've got enough to rent a place and buy local food and drink what more could one want?

I don't want unhealthy attachments anymore.

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[quote name='Jesusaves' date='19 November 2009 - 05:37 PM' timestamp='1258652231' post='2253357']
It's not in my nature to gloat.

I don't see myself as particularly wealthy and have no particular desire to hang on to it, or increase it's value.

I intend to hand it over to my kids, and hopefully, they can go through life less neurotic than me. I will sell up in the next 3 years, buy a small place and give each kiddly a big handout. They're lucky and I'm soft. So be it.

I'm then going to spend 6 months each year abroad. So long as I've got enough to rent a place and buy local food and drink what more could one want?

I don't want unhealthy attachments anymore.
[/quote]

So you are admitting that further HPI is a bad thing?

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[quote name='Jesusaves' date='19 November 2009 - 06:26 PM' timestamp='1258651580' post='2253325']
Why do you keep bringing this up?

I was referring to his perceived fortune by others; the reality is he owes the bank a fortune.
[/quote]

trolls are always inconsistent. or even incontinent too.

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