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Robin Hood

Buying Another House

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Inflation will erode the value of my debt over time, which means when my salary rises by whatever % over the next few years, and the debt stays the same or is partly paid off, it wil cost me a lot less to service.

Its a great deal my friends. Best buy as much land as possible on this small island. Properties arent crashing, they will go hang up there.

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Inflation will erode the value of my debt over time, which means when my salary rises by whatever % over the next few years, and the debt stays the same or is partly paid off, it wil cost me a lot less to service.

Its a great deal my friends. Best buy as much land as possible on this small island. Properties arent crashing, they will go hang up there.

You do that. begins with A ends in A .

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The pessimists cant have it both ways. If inflation is rising, then wages will eventually catch up. That is a reality. It happened in the 1970's, when salaries were pegged for a while and then after a while played catchup with inflation, with salaries jumping up. All the while, the cost of that debt is falling.

Starts with accumulation, ends with accumulation.

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The pessimists cant have it both ways. If inflation is rising, then wages will eventually catch up. That is a reality. It happened in the 1970's, when salaries were pegged for a while and then after a while played catchup with inflation, with salaries jumping up. All the while, the cost of that debt is falling.

Starts with accumulation, ends with accumulation.

Its a wonder that people gave up thier houses so easily back in the days aint it? Im amazed that they actually let themselves get repossessed.

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Guest muttley
The pessimists cant have it both ways.

The optomists can't have it both ways either.If inflation rises then interest rates will rise and so will unemployment.

Starts with accumulation ends with bankcruptcy.

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There is a high correlation between house prices and inflation, with house prices leading by about 12 months. Pipeline inflation pressure is building, depsite all this talk of deflation. Yet the economy is slipping into recession, so there may be a case for negative real rates.

I believe it is a possible scenario but will see.

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There is a high correlation between house prices and inflation, with house prices leading by about 12 months. Pipeline inflation pressure is building, depsite all this talk of deflation. Yet the economy is slipping into recession, so there may be a case for negative real rates.

I believe it is a possible scenario but will see.

Was this before or after RPI was put on the back burner for CPI?

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The pessimists cant have it both ways. If inflation is rising, then wages will eventually catch up. That is a reality. It happened in the 1970's, when salaries were pegged for a while and then after a while played catchup with inflation, with salaries jumping up. All the while, the cost of that debt is falling.

Starts with accumulation, ends with accumulation.

Can you give any details about where you have bought, is it your home or an investment (or even both!) etc, what level of debt you have taken on?

I agree that inflation over the long term is excellent news for borrowers since it erodes the value of debt. The problem is that in the short term, interest rates go up, the borrowers cash flows gets squeezed and they go bust if over levered. Thats what happened in the late 80s.

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Guest Charlie The Tramp
It happened in the 1970's, when salaries were pegged for a while and then after a while played catchup with inflation, with salaries jumping up.

Were you around in the seventies and an owner occupier?

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Inflation will erode the value of my debt over time, which means when my salary rises by whatever % over the next few years, and the debt stays the same or is partly paid off, it wil cost me a lot less to service.

Lol, you mean inflation at a whopping 2.4% the figures are so obviously rigged but that doesn't change the fact your wage settlement is still based on them and after tax income in the private sector has actually fallen for the last two years, that's before you get onto the cool stuff like higher fuel costs or utilites.

If inflation goes up then IR go up (eventually) leaving you with a whole lot more interest on that debt to service. Have fun.

The pessimists cant have it both ways. If inflation is rising, then wages will eventually catch up. That is a reality.

Err, so is higher interest rates! This isn't an indulgence, if you have roaring inflation and do nothing about it your currency collapses.

If that is the case for wages then people would already be asking for 8% pay rises to offset the increase in fuel, tax, council tax and living expenses seen over recent years. The fact is workers have to no bargaining power anymore, immigration means there is an unlimited labour pool and the unions have to little power compared to the 70's. If the UK becomes too expensive to operate in then jobs are offshored. If you walked into your managers office and asked for a 8% pay rise he'd pat you on the back and remind you that you're lucky your post still exists!

Edited by BuyingBear

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There is a high correlation between house prices and inflation, with house prices leading by about 12 months. Pipeline inflation pressure is building, depsite all this talk of deflation. Yet the economy is slipping into recession, so there may be a case for negative real rates.

I believe it is a possible scenario but will see.

As I understand it, if the economy is heading for recession as you say, thats not good for wage inflation, and if inflation carries on up, stagflation scenario may raise its ugly head.

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Lets not forget that if the BOE's remit is not followed then the curency value will drop which will mean the cheap goods which have counter-balenced low inflation will go up, we then start 'importing inflation'

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Its a great deal my friends. Best buy as much land as possible on this small island. Properties arent crashing, they will go hang up there.

But it's because you're just a little bit unsure you've done the right thing that you've looked up this site today? Why else would you Google House price crash?:lol:

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Lets not forget that if the BOE's remit is not followed then the curency value will drop which will mean the cheap goods which have counter-balenced low inflation will go up, we then start 'importing inflation'

Don't worry, our great manufacturing base with light regulation and cheap labour will come along and save the day :lol::lol:

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There is a high correlation between house prices and inflation, with house prices leading by about 12 months. Pipeline inflation pressure is building, depsite all this talk of deflation. Yet the economy is slipping into recession, so there may be a case for negative real rates.

I believe it is a possible scenario but will see.

oh! Where were you a decade ago when the Japanese chancellor needed your assistance in tackling

falling property prices and inflation and interest rates. Give him a call, when you're finished, I think

the dutch need your pearls of wisdom. Maybe they are just overcomplicating things over there. Yes,

that's it. Missing the trees for the woods. ;)

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Its a great deal my friends. Best buy as much land as possible on this small island. Properties arent crashing, they will go hang up there.

Oh! And Japan of course, although it has nearly double the population of the UK, is at least

abundent in land, roughly the size of Australia, I think. Oh no, wait, that's the US I am thinking

of. Oh right, that's it, Japan is not much bigger than Britain. Ouch, nasty that was, falling

property prices, interest rates and near 0% inflation on small, crowded island. Still, good

point you made there.

Boomer

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Oh! And Japan of course, although it has nearly double the population of the UK, is at least

abundent in land, roughly the size of Australia, I think. Oh no, wait, that's the US I am thinking

of. Oh right, that's it, Japan is not much bigger than Britain. Ouch, nasty that was, falling

property prices, interest rates and near 0% inflation on small, crowded island. Still, good

point you made there.

Boomer

eerm - have you been to Japan, have you seen what constitutes a "home" compared to UK :unsure:

2 x 6 by 6ft rooms + bathroom which is 3 by 3 for a family of 4 on a 20 floor block of concrete = $350K US please :o

no wonder there was a bigg and longgg crashed flat market.

nothing like market sentiment for a UK "home" , apples being compared with oranges debate again.

I am for buying as soon as , b*****ks to renting ********-isis paralysis.

lostinrent

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eerm - have you been to Japan, have you seen what constitutes a "home" compared to UK :unsure:

2 x 6 by 6ft rooms + bathroom which is 3 by 3 for a family of 4 on a 20 floor block of concrete = $350K US please :o

no wonder there was a bigg and longgg crashed flat market.

nothing like market sentiment for a UK "home" , apples being compared with oranges debate again.

I am for buying as soon as , b*****ks to renting ********-isis paralysis.

lostinrent

Hi,

Now come on, there is no need to swear. It's just a debate. Your point was that Britain is a small crowded island and it would not be possible for houses to fall in those types of circumstance. Well, japan is about the same size, much more crowded, wealthier, with very easy credit. They had 10 years of house price falls. Read the old threads relating to the last crash here as well. The population is very close to levels of about ten years ago, and there was a big crash in the UK back then despite the 'crowded' argument that was dusted off back then. The argument dissapeared during the crash.

OK, a closer comparision. Well, there are only a few nations ahead of us in the cycle but there are other comparisons. Holland is a small European nation, wealthy, more densely populated. They were about 30 months ahead of us. The economy stagnated under the attempts to prop up the housing bubble for a good 2-3 years, just the same way the UK is now. They have been in mild crash now for about 18 months,after a very nasty economic slump trying to prop up houses. Not my opinion, the Dutch chancellor went to the press regretting the decision to allow house prices to explode and then falling ransom to property speculators. Australia are also in an uneasy position economically, needing to ease rates for the economy but unable to because of housing fears - big falls have already occured in the major cities. Both those nations displayed the same traits as the UK now, slumping consumer demand, increasing indebtedness, stagnating or falling house prices. Even in the US, who are most likely ahead of us, the hottest spot, Calafornia, has entered crash. The housing price boom several industrial countries encountered was artificially engineerd, none more so than the UK. The arguments and links to those sources are well posted here in previous threads. The challenge is, can you counter those arguments with a substantial reposte. I think this forum is a debate on houseprice crashes, investment and where we are going from here. If you can, it adds to the debate, it may help people make clearer decisions in the face of a very biased UK media.

Boomer

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Robin Hood and lostinrent, go on then get in there and fill your wellies. Everybodies got to learn sometime, and somtimes some people need to learn the hard way....Goodluck....you'll need it .....NEXT :rolleyes:

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  • 301 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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