Tuc Call For Action On Falling House Prices

[Guest P-Diddly]

This does not effect any affordability criteria though if incomes dont rise, which they show no sign of doing. Who knows maybe we are now destined for reasonably desireable housing to be unaffordbale for most? Supported by the fact there is a big under supply of desireable housing.

You can still get terraced houses in not great areas for well under 100k in Birmingham. You could prob pick one up for 70-80k in fact.

I think so. Although I get blasted here for saying this, the reason housing was 3x income affordable years ago is because the UK created real wealth (at least I think it did) on a pretty large scale for it's size. By that I mean stuff required to maintain the human condition above that of the rest of the animal kingdom.

Globalisation and the shift in the means of production from West to East has reduced the real wealth creation the UK once had and thus it's real purchasing power/standard of living. Globalisation was a one-way street. East = protectionist, West = dependent on imports.

Over the last decade, wealth has pretty much been a fiddling of the accounts, relative to consumption levels (trade deficit from 1997 onwards, there was a good chart of it here somewhere). With QE, this continues.

Edited September 29, 2009 by P-Diddly

[Laughing Gnome]

I think so. Although I get blasted here for saying this, the reason housing was 3x income affordable years ago is because the UK created real wealth (at least I think it did) on a pretty large scale for it's size. By that I mean stuff required to maintain the human condition above that of the rest of the animal kingdom.

Globalisation and the shift in the means of production from West to East has reduced the real wealth creation the UK was had and thus it's real purchasing power/standard of living. Globalisation was a one-way street. East = protectionist, West = dependent on imports.

Over the last decade, wealth has pretty much been a fiddling of the accounts, relative to consumption levels (trade deficit from 1997 onwards, there was a good chart of it here somewhere). With QE, this continues.

I think you are pretty much spot on.... tired of being facetious?

It seems to me our currency must have been (massively) overvalued for decades to fuel this mechanism. I can't attempt to explain it, but in my simplistic view huge trade defecits, year after year, should devalue the currency.

Anyone?

[Guest P-Diddly]

I think you are pretty much spot on.... tired of being facetious?

It seems to me our currency must have been (massively) overvalued for decades to fuel this mechanism. I can't attempt to explain it, but in my simplistic view huge trade defecits, year after year, should devalue the currency.

Anyone?

Sometimes there's a brief chemical change in my tiny brain and I suddenly feel the need not to take the pi$$.

Thankfully this a rare event.

Yes. Overvalued. Trade deficit. Accounts fiddling. Now face the reality. It's been a longer game than many realise. I'll go with Soros and his "end of the post-war super-boom" theory.

[OnlyMe]

I would tend to agree with you

However I live in London and there is a lot of chat that the Central London market is being supported by Euro buyers, after alll the London market is 40% cheaper for them

Personally,, outside of maybe Kensingtion and Chelsea, I think this is horses**t

Well unless they are gong to live there then they are purchasing for investment, on that basis any return is 40% less too taking the forced sterling collapse into account.

If the internal economy is unable to generate the income to make higher rentals returns possible then these figures will not get better.

[Guest P-Diddly]

Well unless they are gong to live there then they are purchasing for investment, on that basis any return is 40% less too taking the forced sterling collapse into account.

If the internal economy is unable to generate the income to make higher rentals returns possible then these figures will not get better.

Dude I feel the UK is heading for a semi-Zimbabwe thinga-me-giggy. Bet houses there are quadzilliontrillions of Zim Dorras or whatever the hell 'currency' it is. But about $15 for anyone else.

Bet the BoE push a bit more QE yet . . . then a bit more . . . then . . .

[InsideEdge]

I think so. Although I get blasted here for saying this, the reason housing was 3x income affordable years ago is because the UK created real wealth (at least I think it did) on a pretty large scale for it's size. By that I mean stuff required to maintain the human condition above that of the rest of the animal kingdom.

Globalisation and the shift in the means of production from West to East has reduced the real wealth creation the UK once had and thus it's real purchasing power/standard of living. Globalisation was a one-way street. East = protectionist, West = dependent on imports.

I think its a case of people feeling they 'deserve' a better house than they can afford. They think they have gone to uni and therefore must be doing something of real value in their jobs when in fact they are producing little wealth. As such the purchasing power of their income is less than they think it should be.

This must be a relative thing though. I cant think of any reaosn why a countries housing stock should suddenly become less affordable for everyone in that country based on GDP or FOREX. If an economy is producing less wealth its housing stock should be worth less to its inhabitants. Barring of course a big inflow of overseas investors buying our now cheap housing. Something I dont think is happening in significant numbers or ever will.

Thoughts anyone?

[Guest P-Diddly]

I think its a case of people feeling they 'deserve' a better house than they can afford. They think they have gone to uni and therefore must be doing something of real value in their jobs when in fact they are producing little wealth. As such the purchasing power of their income is less than they think it should be.

This must be a relative thing though. I cant think of any reaosn why a countries housing stock should suddenly become less affordable for everyone in that country based on GDP or FOREX. If an economy is producing less wealth its housing stock should be worth less to its inhabitants. Barring of course a big inflow of overseas investors buying our now cheap housing. Something I dont think is happening in significant numbers or ever will.

Thoughts anyone?

AAAAAARRRGGGGHH!!!!

It isn't based on it, they are just both consequences of QE.

Pump money in, inflate (or don't deflate prices) in that currency. But at the same time this pushes the currency valve down on the FX markets.

[MinceBalls]

Well unless they are gong to live there then they are purchasing for investment, on that basis any return is 40% less too taking the forced sterling collapse into account.

If the internal economy is unable to generate the income to make higher rentals returns possible then these figures will not get better.

Once you've converted your euros to £ to make the purchace of UK property you are locked into the £ for the life of the investment. When it comes to selling, you get £ back and have to convert back to euros / another. So if I were a euro / another investor I would be AVOIDING purchasing UK property because as has already been stated the £ is being devalued and looks like it has some way to go - you would effectively be investing in the £ if you purchased with euros as much as you would be investing in property

Edited September 29, 2009 by MinceBalls