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eurows

Maybe The British Way Of Life Is Just Changing

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Maybe there is another senario and we just have to accept it.

Maybe all those that are on the ladder will remain on the ladder.

Those that get left inheritance and life changing circumstances will be able to climb the ladder.

Everybody else will be left to rent on someones pension scheme.

and thats the way it will be. No houseprice crash. Just a change in the way we have been used to housing.

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Don't think so, the idea buying and owning for stability is so heavily ingrained into the British psyche (in no small part thanks to the consistent spin) and the rental sector so badly set up for long term stability that the conditions are not right for a step change. A lot of people would rather leave the country and sewt up elewhere - imagine a demographi bomb sitting there and then a good propertion of the wyoungsters sod off abroad - and why not, I doubt whether they will be too keen of working to 70 paying for a scoaiety in which they have little or no stake.

Despite all the above economics will out - a hopelessly expensive economy in which staff mobility is crippled by costs of attracting reasonable staff, the companies will leave first.

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Maybe there is another senario and we just have to accept it.

Maybe all those that are on the ladder will remain on the ladder.

Those that get left inheritance and life changing circumstances will be able to climb the ladder.

Everybody else will be left to rent on someones pension scheme.

and thats the way it will be. No houseprice crash. Just a change in the way we have been used to housing.

If that's the future for Britain the following will happen: mass emigration of young skilled workers leaving a country consisting of the non-owning-class-workshy to rent off the owning-class-workshy with government money.

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A new era perhaps? We've had the end of history, now we've come to the end of economic cycles. If you really do believe that we are now entering a new age, try reading Francis Wheen's 'How Mumbo-jumbo Conquered The World'.

Then again, some are suggesting that we are in the process of entering a Dickensian hell / new feudal age, where the masses are exploited by an economic and political elite.

As for - 'just having to accept it'?????????

Edited by gruffydd

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Maybe there is another senario and we just have to accept it.

Maybe all those that are on the ladder will remain on the ladder.

Those that get left inheritance and life changing circumstances will be able to climb the ladder.

Everybody else will be left to rent on someones pension scheme.

and thats the way it will be. No houseprice crash. Just a change in the way we have been used to housing.

Impossible! The whole thing DEPENDS on a huge volume of buyers paying sellers the "market" price for their houses. If what you say hapenned - then their would BE NO market!! i.e. House x, y or z would not actually be "worth" £300k - because no one will be paying £300k for it - i.e. it would only be worth what buyers ACTUALLY pay for it - and only "worth" £300k if the owner was able to sell it for that within a reasonable time i.e. within 2-3 months of puting it on the "market". People should never forget - a house is "worth" only what people will buy it for! In your example - there is actually no market!! And - it is close to what the ACTUAL market is like today: Very low volumes; lots of behind-the-scenes discounts of 10-30%; loads of sellers just cannot sell - [no buyers] etc. etc. i.e. The market is half dead - going on to dead soon.....

Edited by eric pebble

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You may be right, it's certainly a plausible scenario.

Following a mass emigration of those skilled enough and solvent enough to leave the UK, what would/will be left behind is a poorly educated, low paid mass underclass and a much smaller multiple property owning class, UK society would then closely resemble that in many less developed countries such as Mexico.

I don't see this as impossible at all, if homeowners simply refuse to accpet lower prices, then things could conceivably stagnate and fall slowly over time as inflation erodes values and the UK economy shrinks. I have posted before that I have a feeling that within 25years time the UK economy may well be of a similar size and structure to that of Portugal.

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A lot of people would rather leave the country and sewt up elewhere - imagine a demographi bomb sitting there and then a good propertion of the wyoungsters sod off abroad

Maybe I would have already - if it wasn't for the fact that there have been equivalent house price bubbles in all of the countries I would look at as an alternative. :(

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I'm only familiar with the Irish market. But it's seriously possible that eurows scenario can happen here. yes the long-term effects would be economically disasterous, but that wouldnt stop it happening in the medium term. I fear that in Ireland at least, the division of renters and owners for the next 20yrs is already decided. Ireland Inc simply will not tolerate lower trading prices for property. Those wanting to own property in the future will probably have to emigrate, and I forsee another cycle of economic cleansing from Ireland. UK is a different story, definitely more dynamic and heterogenous, and prices more reflective of demand/supply. but who knows? a crash is not guaranteed anywhere.

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Maybe there is another senario and we just have to accept it.

Maybe all those that are on the ladder will remain on the ladder.

Those that get left inheritance and life changing circumstances will be able to climb the ladder.

Everybody else will be left to rent on someones pension scheme.

and thats the way it will be. No houseprice crash. Just a change in the way we have been used to housing.

You really need to read up about the financial bubbles of the past 1500 years from Ancient Rome to Tulips to South Seas to dot.con. This bubble is no different. It will pop and the fall will be greater than the rise.

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I think we've had a bit of bad news today, but that doesn't mean the crash/correction is cancelled.

As has been stated above, there simply isn't the money to keep this bubble up. Eventually the lack of cash available will pop it.

As for Ireland, it really doesn't matter what the sellers will stand for! They don't set the market!

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I'm only familiar with the Irish market. But it's seriously possible that eurows scenario can happen here. yes the long-term effects would be economically disasterous, but that wouldnt stop it happening in the medium term. I fear that in Ireland at least, the division of renters and owners for the next 20yrs is already decided. Ireland Inc simply will not tolerate lower trading prices for property. Those wanting to own property in the future will probably have to emigrate, and I forsee another cycle of economic cleansing from Ireland. UK is a different story, definitely more dynamic and heterogenous, and prices more reflective of demand/supply. but who knows? a crash is not guaranteed anywhere.

The answer is simple.

The rentier class just turn round and refuse to pay their rent en-masse.

It takes months to get them out but within 3-4months the country would be on its knees with landlords defaulting on mortgages > lower house prices eventually!

A similar scenario is where the rentier class refuse to pay more than say, £150.00 per month rent, en-masse > lower house prices.

Play the Banks @ their own game - if you cut off/reduce the money supply going back to them for mortgages - blah blah!

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I think we've had a bit of bad news today, but that doesn't mean the crash/correction is cancelled.

As has been stated above, there simply isn't the money to keep this bubble up. Eventually the lack of cash available will pop it.

As for Ireland, it really doesn't matter what the sellers will stand for! They don't set the market!

The 'market' in Ireland is asymmetrical in the extreme. It has never and will never function on the basis of a freely set supply/demand equilibriim. The owner/supply side of the market is akin to a cartel. Yes distressed sellers could break ranks, but I reckon measures will be put in place to prevent this (heavy subsidies for distressed mortgage holders etc.). My conclusion for the Irish bubble annoys and disappoints me, however if the most likely outcome given the facts.

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I don't think the OP is necessarily saying that this is going to happen, just that the possibility is there.

Why does the idea make everybody so emotional?

It only takes a generation of high prices before renting becomes the social norm.

There's no need for a mass exodus, or a hysterical panic.

It intrigues me that people are so bound to property ownership.

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I don't think the OP is necessarily saying that this is going to happen, just that the possibility is there.

Why does the idea make everybody so emotional?

It only takes a generation of high prices before renting becomes the social norm.

There's no need for a mass exodus, or a hysterical panic.

It intrigues me that people are so bound to property ownership.

True, but you start off from where you start off - Englishman's home is his castle and all that - this is heavily ingrained and not going to go away with a shrug of the shoulders - you can also bet that those involved with shoving debt down the throats of the consumer will not do a an about face and start saing that renting is the way to go.

Oh another thing - just imagine what would happen to consumer expenditure if there really was a mass shift to renting - renters spend a tiny fraction of the money that owners do on the the updating, repair and fursnishing of the propety in which they reside. The retail trade based on housing goods would shrink massively - in fact we may already be seeing the effects of this as one sector of the market has already been expunged of fresh blooding with the disappearance of the FTB.

Edited by OnlyMe

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IMO things are changing, as property has gone up in value more and more people have started to get lodgers, stay at home with mum and dad or live in houseshares, as the crash starts to unfold this will occur more... This produces more rental supply and reduce the costs of renting

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I don't think the OP is necessarily saying that this is going to happen, just that the possibility is there.

Why does the idea make everybody so emotional?

It only takes a generation of high prices before renting becomes the social norm.

There's no need for a mass exodus, or a hysterical panic.

It intrigues me that people are so bound to property ownership.

because theres no infrastructure to house a population in rental accomadation.

only a string of cheesy, greedy boomers with any old tim pot property and climbing rising rents.

i dont see a political party staying in power for very long if they attempted this.

people are fed up.

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The answer is simple.

The rentier class just turn round and refuse to pay their rent en-masse.

It takes months to get them out but within 3-4months the country would be on its knees with landlords defaulting on mortgages > lower house prices eventually!

A similar scenario is where the rentier class refuse to pay more than say, £150.00 per month rent, en-masse > lower house prices.

Play the Banks @ their own game - if you cut off/reduce the money supply going back to them for mortgages - blah blah!

WELL SAID that man!! That's the spirit! Not enough people understand that they can take matters into their own hands where there is a WILL to just say "NO!".

However - Many are missing the point! The whole houseprice thing DEPENDS on a huge volume of buyers paying sellers the "market" price for their houses. If what you say hapenned - then their would BE NO market!! i.e. House x, y or z would not actually be "worth" £300k - because no one will be paying £300k for it - i.e. it would only be worth what buyers ACTUALLY pay for it - and only "worth" £300k if the owner was able to sell it for that within a reasonable time i.e. within 2-3 months of puting it on the "market". People should never forget - a house is "worth" only what people will buy it for! In your example - there is actually no market!! And - it is close to what the ACTUAL market is like today: Very low volumes; lots of behind-the-scenes discounts of 10-30%; loads of sellers just cannot sell - [no buyers] etc. etc. i.e. The market is half dead - going on to dead soon..... JUST like a Pyramid Selling Scam [i wonder why....!!?] - IF the buyers onto the bottom rung dry up, becasue they are unable to afford prices/do not want to be ripped off anymore - the whole thing quickly dies!!! etc. etc. Let no one forget!!!! If their are no buyers in large numbers/volumes..... it ALL dies!! As it is showing signs of now...... No buyers/no sales/ no money!!! It' all about TURNOVER...... Without that - their is NO MARKET!!!!!!!!!

Edited by eric pebble

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Cheer up dudes.

Aug 2004 HPI = 20% ish.

Today HPI = 3.0%.

...At this rate of change, by this time next year we'd be looking at about - 15% YOY.

on_track.JPG

Rubbish graph of UK Halifax % HPI '84 to earlier this year. Not updated yet but we are now at about 3% so it all looks on track to me.

post-3147-1128597163_thumb.jpg

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You’re inflating house prices into “the British way of Life”.

Most people here believe that house prices are cyclical and are therefore at some points in time “cheap” at other points “expensive” and occasionally “bloody ridiculous”. When we get to the latter point entry for first time buyers becomes prohibitive and over a fairly short period of time there is an over correction to “cheap”.

My own life experience bears this out. I lived in rented flats for a little over 17 years and only bought in 1987 because friends were telling me if I didn’t get on the ladder I would never buy a place of my own. When the market collapsed in 1991 prices had risen to about 30% higher than I had paid. They then bounced along the bottom for the next few years. I eventually moved in with my girlfriend in 1998 and rented out my flat. A year later we purchased the flat below for only ten thousand more than I had paid in 1987.

I am not impressed by the people who say its different this time because I can’t see what’s changed.

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Maybe there is another senario and we just have to accept it.

Maybe all those that are on the ladder will remain on the ladder.

Those that get left inheritance and life changing circumstances will be able to climb the ladder.

Everybody else will be left to rent on someones pension scheme.

and thats the way it will be. No houseprice crash. Just a change in the way we have been used to housing.

This will never happen and the proof is as simple as the reason this sort of society went out with the ark...

We live in a representitive democracy (it's not perfect I know) which will be elected by the majority (roughly!)

The majority would be the have-nots again in the above scenario and thus dead certain election winner for any party who would rectify the situation!

Cheer up, it will NEVER happen! :)

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True, but you start off from where you start off - Englishman's home is his castle and all that - this is heavily ingrained and not going to go away with a shrug of the shoulders.

My frame of reference is Munich, where I lived and worked for a few years. In my company there were lots of high earners for whom renting was the only choice: not because they couldn't afford to buy but because the idea simply didn't enter their minds. I was renting a 1-bed (55sqm) flat with a terrace and private garden in the nicest part of town - next to a castle and its grounds - for £350/m. And Munich is considered expensive.

I think if there were rent controls in London (as there are in Munich) such that rents in Z1-2 were on average £400/m then people (Londoners) would soon forget that claptrap about an Englishman's home being his castle. It would stop the BTL boom in its tracks too: negative yield.

I'm not advocating that this happens, just trying to think outside the box and challenge dogmatic beliefs (as is my wont).

This will never happen and the proof is as simple as the reason this sort of society went out with the ark...

Not true, as discussed above. Did you ever live abroad?

Edited by Nijo

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Maybe there is another senario and we just have to accept it.

Maybe all those that are on the ladder will remain on the ladder.

Those that get left inheritance and life changing circumstances will be able to climb the ladder.

Everybody else will be left to rent on someones pension scheme.

and thats the way it will be. No houseprice crash. Just a change in the way we have been used to housing.

No matter who owns the home, they still have to be bought.. and unless very rich men buy all with cash..

Well then the money is borrowed and the economy cannot support current purchase costs or the rents neccesary to support these loans..

Fact..

Someone has to but them.. and they only go up if people are prepared to loose money to rent them to you..

but then why would they do that.. and why would they go up..

It was a speculators market..

simple as that.. no more complicated..

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No matter who owns the home, they still have to be bought.. and unless very rich men buy all with cash..

Well then the money is borrowed and the economy cannot support current purchase costs or the rents neccesary to support these loans..

Fact..

Someone has to but them.. and they only go up if people are prepared to loose money to rent them to you..

but then why would they do that.. and why would they go up..

It was a speculators market..

simple as that.. no more complicated..

Different thing I know, but did I read somehere that the classic car market (many years ago) collapsed because costs got higher and higher ... and it was finally realised that there was no 'next person' willing to pay the higher cost.

I know people need houses more than they need cars ... but surely if costs keep rising, then eventually there will be no more money to pay for it - unless new money is fed in - but where from?

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Not true, as discussed above. Did you ever live abroad?

No, I never lived abroad.

I was just talking about the UK.

Renting society in UK? No chance. Both main parties believe in OO and this will be the case for many many years to come. Even if they have to repeat the whole excercise of building council (or housing association) property and flog it cheap again. They will do it because it wins the vote.

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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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