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The Masked Tulip

Why You Should Be Terrified

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http://www.lovemoney.com/news/grow-your-wealth/pensions/why-you-should-be-terrified-10586.aspx

2. The changing make-up of our population could have a big impact on house prices. Recent generations of homeowners have been able to make money by selling up and moving to cheaper homes when they retire. Thanks to strong demand from plenty of young workers, this has been an easy way to make money.

But I think that’s going to change. Going forward, there will be more people in their 60s trying to cash in and sell up, and fewer people in their 30s and 40s trying to buy. That means house price growth will slow and we may see more years where prices fall.

Lower house prices will be great for younger folk who are currently in their teens or twenties. However, I’m in my 40s and I’ve begun to realise that I can’t rely on property profits to keep me comfortable during my retirement.

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I pointed this out on this very site years ago. There is a 'bulge' in the population - when the current 60 year olds try to downsize and flog their stately pile on to the youngsters, they are going to be disappointed to find out there are more oldies looking to sell than young whippersnappers looking to buy.

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I pointed this out on this very site years ago. There is a 'bulge' in the population - when the current 60 year olds try to downsize and flog their stately pile on to the youngsters, they are going to be disappointed to find out there are more oldies looking to sell than young whippersnappers looking to buy.

I personally think that there is a flaw in this argument - immigration.

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I personally think that there is a flaw in this argument - immigration.

I tend to agree.  The population in the UK hasn't peaked yet, and in fact isn't due to peak until 2051. Yes there may be a higher proportion of oldies, but they are do generally seem to be stubborn and reluctant to move.

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I tend to agree.  The population in the UK hasn't peaked yet, and in fact isn't due to peak until 2051. Yes there may be a higher proportion of oldies, but they are do generally seem to be stubborn and reluctant to move.

F4cking flu jabs f4cking things up!

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I tend to agree.  The population in the UK hasn't peaked yet, and in fact isn't due to peak until 2051.

Hmmm, prediction. Do you have a crystal ball?

Remember, populations can go down as well as up.

Yes there may be a higher proportion of oldies, but they are do generally seem to be stubborn and reluctant to move.

Once they see their pension statements around 2018, they'll be keen to sell. ;)

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I personally think that there is a flaw in this argument - immigration.

The problem is, the kind of immigrants the UK is attracting these days are fair weather friends. They arrive, work hard for 3 years, save loads of money then feck off back to their home country.

There is another kind, but they turn up, sign on and sit back while the benefit payments roll in.

Neither type is likely to be settling down with a mortgage on a 4-bed semi next to a good school any time soon.

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There is another kind, but they turn up, sign on and sit back while the benefit payments roll in.

...that's OK ....the BTLer will buy and this kind will rent with housing benefit....it will never run out ....until we are all sold into slavery....maybe not so far away..... :rolleyes:

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Don’t think it will make much of a difference as today markets are so liquid that they chase returns no matter the investment. Therefore rents and the prevailing 10 year interest rates will determine prices more than anything else.

Even if say banks were forced to only lend 3x income I suspect we would not see a huge correction as those with surplus capital will put it into houses if the yield was greater than where it currently resides.

No major HPC without a bond crash imo

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The problem is, the kind of immigrants the UK is attracting these days are fair weather friends. They arrive, work hard for 3 years, save loads of money then feck off back to their home country.

There is another kind, but they turn up, sign on and sit back while the benefit payments roll in.

Neither type is likely to be settling down with a mortgage on a 4-bed semi next to a good school any time soon.

Yes. I've always wondered why people who talk of immigration assume immigrants will want to buy property. I would expect them to prefer to rent, a bit like me, although I'm not an immigrant.

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Another factor I've not seen mentioned. The 60 somethings are probably the first generation where it is becoming normal to inherit property.

They will probably sell up and add the money to their inheritance. Makes them cash rich for that nice retirement pad.

This movement amongst the wealthier section of the market is distorting the statistics.

Not sure who they sell their house to. Could there be a strata of the market who have lots of equity/ own and buy and sell to each other?

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I personally think that there is a flaw in this argument - immigration.

Отже, що вони прибуття від? :huh:

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Don’t think it will make much of a difference as today markets are so liquid that they chase returns no matter the investment. Therefore rents and the prevailing 10 year interest rates will determine prices more than anything else.

Even if say banks were forced to only lend 3x income I suspect we would not see a huge correction as those with surplus capital will put it into houses if the yield was greater than where it currently resides.

No major HPC without a bond crash imo

Liquidity and housing market? OK. Maybe we will see hedge funds buying and selling them in a matter of seconds for pennies in transaction costs. If you are lucky and you happen to be on your house trading website you might get a flash crash and be able to buy in at a reasonable price.

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I pointed this out on this very site years ago. There is a 'bulge' in the population - when the current 60 year olds try to downsize and flog their stately pile on to the youngsters, they are going to be disappointed to find out there are more oldies looking to sell than young whippersnappers looking to buy.

the only bulge that allowed people to bid up prices was cheap and abundant, risk free, credit.

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I personally think that there is a flaw in this argument - immigration.

Yes but are they the type to buy single family properties and to be able to get a mortgage to cover it? They aren't doctors from India but building labourers from Poland (and possibly Turkey).

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The problem is, the kind of immigrants the UK is attracting these days are fair weather friends. They arrive, work hard for 3 years, save loads of money then feck off back to their home country.

There is another kind, but they turn up, sign on and sit back while the benefit payments roll in.

Neither type is likely to be settling down with a mortgage on a 4-bed semi next to a good school any time soon.

+1

Was about to tap away to that effect - but you saved me the hassle (and did it much better too. Thanks :))

B

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Отже, що вони прибуття від? :huh:

Every time you post po-ruski, I have to take the oil-can to my ochen rusty old Russian and charge off to find the dictionary.

Just as well I've still got it. :)

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This isnt a one for one trade and the story/thread is missing a whole generation out.

Boomers are not downsizing and selling their homes to first timers. There is another group, families who are moving up from their first or second homes. I see no reason why that demand is about to disappear.

If anything the market may die at the ftb end but will sustain itself further up. I dont know any boomers that own these large homes and are wishing to downsize to a 1bed sh1tbox or a town terrace. They are far more likely to drop down to the average second home just as those with families will continue wishing to move up.

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This isnt a one for one trade and the story/thread is missing a whole generation out.

Boomers are not downsizing and selling their homes to first timers. There is another group, families who are moving up from their first or second homes. I see no reason why that demand is about to disappear.

If anything the market may die at the ftb end but will sustain itself further up. I dont know any boomers that own these large homes and are wishing to downsize to a 1bed sh1tbox or a town terrace. They are far more likely to drop down to the average second home just as those with families will continue wishing to move up.

just a thought, but you are describing a "ladder"...if the bottom rung is missing, how can the second, third and fourth move...well they were supported by 1.3million BTL "investors"...now they cant get mortgages either.

the argument is mute...all the rungs are supported by high mortgage levels....ALL will fall.

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Boomers are not downsizing and selling their homes to first timers. There is another group, families who are moving up from their first or second homes. I see no reason why that demand is about to disappear.

Because there is nobody who can afford to buy their first home off them? Not many late-30something/early-40something families have enough income to buy their "forever home" without releasing the capital from their first home. A new (i.e. not BoE + 0.5% tracker) 90% LTV mortgage on a £200k or £300k house is going to put a mighty dent in the monthly salary of almost any family.

Pyramid schemes need new participants to survive.

Edited by Dorkins

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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