Tuesday, Feb 13, 2007
Drop in housing demand predicted
Citywire: Equity release faces demographic challenge
Tom McPhail, head of pensions research, at Bristol-based adviser Hargreaves Lansdown is saying that an expected drop in the population over the next couple of decades would reduce housing demand. Meanwhile, he says, older people will be trying to trade down or release equity in lieu of a pension.
Posted by rich @ 04:47 PM (142 views) Add Comment
9 Comments
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1. enuii said...
Oh Dear, everyone is leaving the country or can't afford to have kids and I wont be able to pay off that interest only mortgage on that large exec house I bought on that ever so desirable exclusive estate as a pension fund.
2. Cstanhope707 said...
Actually this is not so far fetched the recent influx of workers from Poland for example was due to the fact that as properties were so cheap in Poland they could come to the UK work a few years and go back and get there dream house in Poland. Hence the BTL boom. However as Property becomes more and more expensive in Poland this is not such an attractive proposition. Who for example wants to come to the UK work for minimum pay share a dump with 6 other people only to find you have gained nothing!!!!
3. Rationalinvestor2007 said...
There's undoubtedly some logic to what he says but remember
(a) the author has a vested interest in people using more traditional investment vehicles for their pension, so his comments should be taken with as much of a pinch of salt as those of the mortgage lenders about HPI
and
(b) the argument that the population will fall is highly dubious. Population growth in the UK has accelerated markedly in the past 5-10 years, driven by record levels of immigration. Although they don't say it publicly (to avoid enraging Daily Mail readers) both the Labour and Conservative parties are committed to continued high levels of immigration in the mid/long term. The population decline argument would work for other European countries which restrict immigration, but I don't think it holds for the UK.
4. tyrellcorporation said...
There certainly won't be a pension pot for me when I retire, in fact I probably won't retire if Tony and Gordon have anything to do with it. Unless of course I sign up to be labotomised, chipped and added to the Public Sector Borg.
5. bingo said...
interesting article this one. Basically put, it says people living in affluent areas such as London and I guess SE are ok with property as an investment vehicle for funding retirement, but that people in areas such as Liverpool (he was specifically saying Liverpool) should forget property and invest in a regular pension plan. When I looked at the headline above I also thought they were going to talk about MEWing being acceptable in certain areas but not in others. I can see the logic, because if as stated property prices have actually started to fall behind inflation in certain areas of the country then surely MEWing will also grind to halt. I think can hear a hissing sound...
6. Davros said...
Hey, if something seems to good to be true......
7. Drbubb said...
LOL
bingo that comment shows that hope has gotten the better of wisdom
London is benefitting from the upcycle in property and financial products, when the cycle turns down, the excesses will be exposed, and those who over-geared to buy property, or worse yet put it in their pensions will suffer acute financial distress. Just look across the atlantic to see what lies ahead
8. David20040_0 said...
Population decrease? Eh? Record immigration will stop the population decreasing. I thought the population was supposed to hit 65 million by 2015?
9. David20040_0 said...
"Tom McPhail, head of pensions research, said an expected drop in the population would mean there would be fewer family age adults around to buy houses"
What expected drop, the population is increasing at the fastest rate in history. Where has this suspected decreased from? 200k more enter the UK than leave every year.