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Ah, Home.co.uk - always a good read:

Year-on-year (YoY) asking prices have fallen further, consolidating the downward trend. Corrected for the effect of inflation (RPI ex. housing) the annual fall is much worse at around 7%. The loss on capital invested in the typical UK home (£184,950) is around £14,000 per year. ...

Inflation: The theft by stealth of capital in property. Since April 2008 UK property has no longer been a safe store of capital value (i.e. the time when house prices no longer kept up with inflation).

The average asking price for England and Wales in February 2008 was £244,315. The current value of the property in terms of Feb 2008 pounds invested (corrected for asking prices changes and non-housing inflation over the 3 year period) is £193,891. This represents a loss on capital value of £48,364 or just over £16,000 per annum. This figure represents the cost to capital (in terms of 2008 pounds) of owning UK property outright (i.e. a cash purchase in Feb 2008). The loss in today’s less valuable pounds is around £55,563. However, often this loss in capital value is not noted. Today’s nominal value of the same hypothetical ‘average UK house’ is £225,579, hence the nominal loss, due to asset price depreciation, is much smaller at around £19,000 over all three years. ...

One might conclude that the purpose of current UK economic policy is to benefit the heavily indebted: government, banks, business and mortgagees. Meanwhile, savers and those with capital tied up in property pay a heavy price.

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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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