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House Price Crash Forum


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About Smyth

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    HPC Regular
  1. Someone joining a graduate scheme in London after university should be on £50-70k/year by the age of 30 easily, unless theyve done something horribly wrong. Most people buy houses as a couple. £60k/year * 2 people * 4x mortgage multiplier = £480k. Throw in a small deposit and half a million is a reasonable price range for most middle class graduates buying their first property (most people I knew in London were buying around that range). Servicing a £480k mortgage is around £1800/month which is about what you'd pay to rent a 2 bed flat. Obviously the woman will need to keep working full t
  2. Ok fine, I think it should cost £0.01 to give someone a home. If its a 7 bed detached house in Mayfair then i think it should cost £2.17. I also think it should cost £3.48 to give everyone a yacht and a pony. Unfortunately in the real world in which we live, there are costs and allocation problems associated with the provision of non-scare goods, and someone has to pay for these. Any realistic answer to the question has to be framed as "what is the minimum amount we could pay", not "how much could we pay in fantasy land where nothing costs anything and we can wave a magic wand to make houses
  3. The topic is "how much does it cost to give someone a home". Opportunity cost is a real cost, and needs to be included. DItto for the cost of land, since (at least in majori cities) that costs a substantial amount of the house. This is wrong, because some plots of land will always be inherently more valuable than others. A square mile in the centre of London will always cost a lot more than a square mile in the North of Scotland. Waving your magic fairy-land wand does not change that..You can already live in the UK and pay a very low rent, by relocating to Skegness. Its very cheap up there, yo
  4. Rents are higher in London because land costs more. If you want to reduce house prices/rents then the best solution is to lower the cost of land. The best way to do that is either scrapping green belts, or allowing more high density development.
  5. No, I mean items used to calculate the inflation basket are weighted based on what the typical household spends on them. Not everything in the basket has an equal weight; obviously camera lenses do not have the same weight as food. Can you please at least try to understand how the world works before you put forward inane conspiracy theories based on ignorance? (the numbers in your post are also misleading because after tax and reduction in means-tested benefits, the person on £30k getting a 5% rise isnt going to be much better off than the person on 15% getting a 5% rise, but thats for a dif
  6. (as a serious reply though, the bulk of people who have to use food banks and other emergency sources of food arent 'poor' as such, they are people undergoing short term problems, typically changes to benefits, and homelessness. These are the people who the welfare system should be helping. People who 'live in poverty' - ie long term benefit recipients and low-wage workers - do not suffer from food shortage because they are getting a huge amount of assistance in government benefits, typically to the tune of £10-20k tax free. The benefit system should be reformed to give more short term assista
  7. poor people are disproportionately obese anyway (especially women, where those in the bottom 20% are twice as likely to be fatties as those in the top 20%). Maybe if we cut the handouts we could make aesthetic improvements to the country.
  8. Yeah this is true; people tend to select which measure of inflation (RPI vs CPI) they use based on the conclusions they want to draw.
  9. The things in your list are all items that people buy. For what its worth, I think my household has bought 5 of them in the last month, 6 if you can count a McDonalds milkshake as flavoured milk. Obviously people spend a lot less on them that they do on (eg) food, which is why they have a lower weight in the basket. The point of the inflation is to capture average patterns of consumption. Most people do not spend 100% of their salary on bills, food, and rent.
  10. 'everyone'? Only 18% of the country rents privately, and of them, a substantial amount have their rent paid by the government through housing benefits. For people who own their homes (which is still 65% of the population - ie the majority) housing costs have decreased over the last 4 years due to the low interest rates. Also RPI includes housing costs, CPI doesnt.
  11. the methodology used to determine the inflation rate doesnt change much year on year, and the government doesnt choose the inflation basket. Please get a basic understanding of how the world works before you start believing in lunatic fringe conspiracy theories - when you have reached the stage where you assume that independent official figures are a lie that serve some shadowy elite, that should be grounds for suspecting you have made a wrong turn somewhere. http://www.ons.gov.uk/ons/guide-method/user-guidance/prices/cpi-and-rpi/cpi-and-rpi-basket-of-goods-and-services/cpi-and-rpi-2013-bask
  12. No, that isnt how money works. Short term interest rates are low now, but you need to borrow over the life-span the house, so you need to use the interest rate which would be charged on a 100 year loan, not the short term interest rate. Now, there's no such thing as a 100 year gilt, but for reference the current yield on a 2 year gilt is 0.66% while the current yield on a 30 year gilt is 3.44%, so as you can see, it goes up sharply. A 100 year gilt (if it existed) would be substantially higher than the 30-year, probably around 5% if we do a crude adjustment. But even ignoring that, the oppor
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