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Fancypants

Excellent Piece In The Guardian

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This one really pushed my buttons, perhaps due to my own particular personal circumstances.

Guardian

I think Mr Shapps should take a long look at these numbers - his avowed policy of righting the imbalances by having wages outstrip prices is all well and good, but where is the upward pressure on wages? And this is very much at odds with the approach at the BoE and the Treasury - i.e. that inflation is ok so long as we can continue to suppress wage inflation.

How much longer do they think this situation can be sustained? The riots were only the first wave of (admittedly inarticulate, confused, and self-serving) dissent. As more and more people grow up being locked out of the "property-owning democracy", I suspect that the social strains will grow greater and greater. I suspect something fairly nasty will have to happen to really wake the government up to the severity of this crisis. Simply placing the market into suspended animation and hoping the "growth fairy" miraculously turns up will not be enough.

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Alice Murphy, 27, and her boyfriend Michael have been saving for years for a deposit. The couple rent a one bedroom flat in Reading but desperately want to buy in London, where Alice works.

Youre competing with landlords paid Housing benefit over market rate, dear.

If you cant beat them, join them. Become a BTLer or a private 'social' tenant.

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Forever rising wages for those who are fortunate to have a job only makes the haves have more...the benefits increase to match and competition with the rest of the world decline....more off shoring, more with chips on shoulders, more feeling hard done by, more poor, more bad feeling, more pressures, more crime, more discord and fear. ;)

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Forever rising wages for those who are fortunate to have a job only makes the haves have more...the benefits increase to match and competition with the rest of the world decline....more off shoring, more with chips on shoulders, more feeling hard done by, more poor, more bad feeling, more pressures, more crime, more discord and fear. ;)

With respect I disagree. This is a generational thing. Prior generations are living way beyond their means and so are attempting to push the cost onto the next via a generational transfer of wealth through housing. They buy at 3 times wages, young people now buy at 10 times wages. They pocket the difference of 7 times wages. All you need do is enact policy to create a shortage of homes together with loose lending.

Having a high paid job now makes no difference. I'm in my mid 30s, earning a lot and yet I've never managed to increase my wages enough to catch up with the house-price curve. I'm earning in the top 5% of salaried workers but I can't buy a 2-bed in London within zone 3, except maybe somewhere where all my neighbours are on benefit, like Tottenham. Note I'm not talking about buying in Hampstead or Kensington, just an area where most people work.

The line between owning and not owning has been drawn around buying before and after 1997. Because most people buy their first house at the same sort of age this means the divide is also by age.

This generational gap will only get wider as the boomers retire, expecting the rest of us to keep them for 30 years as many will expect state benefits or final salary schemes that are not backed by real funds but rather drawn from company profits.

Hopefully the whole thing will blow up big time rather than dragging on and on until things get very bad.

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It's worth mentioning again. The electorate is getting YOUNGER not older. In 10 yrs time the majority of voters will have been born after 1976.

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This one really pushed my buttons, perhaps due to my own particular personal circumstances.

That article is pure property porn.

Much has been made of rising house prices, but the average deposit needed in the first place has actually risen more than twice as fast as house prices and almost four times as fast as income," said Bruno Genovese of First Direct. "This is why we are seeing first time buyers getting older, with more and more people struggling to get on the property ladder."

A banker stating that higher deposits are evil and people should be able to borrow more, so that prices rise and banks can make more money from us.

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It's worth mentioning again. The electorate is getting YOUNGER not older. In 10 yrs time the majority of voters will have been born after 1976.

Awesome. So we've had 15 years so far of policies that suite the current boomers, and we only have another 10 to go.

Hey - what's 25 years of working under a biased system? Blink of an eye. I'll wait another 10 years quietly as I know the boomers won't vote with their conscience so we must wait for a majority then we can start our own debtocracy.

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It's worth mentioning again. The electorate is getting YOUNGER not older. In 10 yrs time the majority of voters will have been born after 1976.

I agree, but with the minor nitpick that most of them haven't a clue what's going on. For years I myself accepted that house prices were sky-high in this country simply because it was a small island. It was only from the age of 35 onwards that I started to try and understand what was happening.

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Forever rising wages for those who are fortunate to have a job only makes the haves have more...the benefits increase to match and competition with the rest of the world decline....more off shoring, more with chips on shoulders, more feeling hard done by, more poor, more bad feeling, more pressures, more crime, more discord and fear. ;)

Well, to a limited extent, yes. But the real problem is - I think - that so much wealth is now in the form of profits rather than salaries. Capital utterly rules labour, and the rentier class grow fat off the efforts of others.

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I agree, but with the minor nitpick that most of them haven't a clue what's going on. For years I myself accepted that house prices were sky-high in this country simply because it was a small island. It was only from the age of 35 onwards that I started to try and understand what was happening.

Yep. I had a guy deliver my Tesco order the other day. He was about 23. He was living in a crap part of London subletting a council flat illegally from the real tenant. Said he was embarrassed to show people where he lived.

I told him I was going to start a political party that would crash house prices and make homes affordable for people like him. We couldn't really talk about it much as he had no idea about any of it. All he knew was that he could barely afford to live on his wage. Which is fair enough - good luck to him but as long as the majority are like this the situation will continue. Same for all those who bought at the right time and have no real understanding of why they are suddenly rich beyond their wildest dreams. They just know they don't want this trip to end.

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Deposits required are too high, rents too high to save for a deposit. Does the article even address the fundamental problem that property has been allowed to boom but not bust. Typical guardian as they are a VI when it comes to HPI. Deposits are 27% because the banks expect prices to fall by 27%.

From the article "But prices in the areas we are looking in just seem to be going up and up and mortgages harder to get. The couple are considering getting a "very big mortgage" and buying a property where they could take in a lodger to help pay for the loan. "It's hard to know what to do. It sounds awful but I have friends who are just waiting for older relatives to die so that they can inherit the money to enable them to buy somewhere to live,"

Yet the guardian does not say prices should be allowed to fall.

I think it invites the reader to draw their own conclusions. Which is what I like about it.

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Yep. I had a guy deliver my Tesco order the other day. He was about 23. He was living in a crap part of London subletting a council flat illegally from the real tenant. Said he was embarrassed to show people where he lived.

I told him I was going to start a political party that would crash house prices and make homes affordable for people like him. We couldn't really talk about it much as he had no idea about any of it. All he knew was that he could barely afford to live on his wage. Which is fair enough - good luck to him but as long as the majority are like this the situation will continue. Same for all those who bought at the right time and have no real understanding of why they are suddenly rich beyond their wildest dreams. They just know they don't want this trip to end.

In Norwich - one supermarket worker I talked to is a laid off Toyota trained car mechanic.

Does a roaring trade in after hrs car mechanics/servicing to supplement minimum wages.

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This one really pushed my buttons, perhaps due to my own particular personal circumstances.

Guardian

I think Mr Shapps should take a long look at these numbers - his avowed policy of righting the imbalances by having wages outstrip prices is all well and good, but where is the upward pressure on wages? And this is very much at odds with the approach at the BoE and the Treasury - i.e. that inflation is ok so long as we can continue to suppress wage inflation.

How much longer do they think this situation can be sustained? The riots were only the first wave of (admittedly inarticulate, confused, and self-serving) dissent. As more and more people grow up being locked out of the "property-owning democracy", I suspect that the social strains will grow greater and greater. I suspect something fairly nasty will have to happen to really wake the government up to the severity of this crisis. Simply placing the market into suspended animation and hoping the "growth fairy" miraculously turns up will not be enough.

...don't know why anyone is saving for a deposit to buy a house right now....anyone without a mortgage or who can come out of a sale 'above water' should sell now while there are people like this Guardian writer willing to buy..... :rolleyes:

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It is depressing that the lady featured in this article does not have the sense to realise that it is house prices and not the deposit requirement that is the ultimate hurdle here

Unfortunately, if 100% mortgages were still common-place, mugs like her would still be clambering over themselves to buy 1 bedroom slave boxes in Stretford just to "fit in"

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Awesome. So we've had 15 years so far of policies that suite the current boomers, and we only have another 10 to go.

Hey - what's 25 years of working under a biased system? Blink of an eye. I'll wait another 10 years quietly as I know the boomers won't vote with their conscience so we must wait for a majority then we can start our own debtocracy.

Yep. That's the jist of it. Gives me some comfort that the dice might be loaded in favour of my daughter, in so far as you can't predict anything.

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The average deposit paid is now higher than it was in 1995/96...

Since B2L mortgages cam into play, and people could reinvest capital in a market propped up by government and banking policy.

Some bugger's struggling to raise £50 to put a house on old kent road, meanwhile you remortgage Mayfair and Park Lane to buy every other property, but instead of not being able to claim rent, the government will pay you to let somebody on housing benefit live in your property...

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Awesome. So we've had 15 years so far of policies that suite the current boomers, and we only have another 10 to go.

Hey - what's 25 years of working under a biased system? Blink of an eye. I'll wait another 10 years quietly as I know the boomers won't vote with their conscience so we must wait for a majority then we can start our own debtocracy.

What choice do you have? Are you going to take to the streets like the young Greeks? Hasn't done them any good at all. Vote for politicians who want lower house prices and an end to intergenerational buck passing? Oh that's right, there aren't any, and even if there were they would lose to candidates who support the status quo.

All the under 35s can do for now is try to educate friends and family of the same age group as to the true nature of what's happening. I've found many people to be extremely receptive to the message, which tells me that the anti-Ponzi time is coming. Other than that, we ought to stay sane and enjoy life.

Edited by Dorkins

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What choice do you have? Are you going to take to the streets like the young Greeks? Hasn't done them any good at all. Vote for politicians who want lower house prices and an end to intergenerational buck passing? Oh that's right, there aren't any, and even if there were they would lose to candidates who support the status quo.

All the under 35s can do for now is try to educate friends and family of the same age group as to the true nature of what's happening. I've found many people to be extremely receptive to the message, which tells me that the anti-Ponzi time is coming. Other than that, we ought to stay sane and enjoy life.

Agree about staying sane and enjoying life. Think I might do that soon in another country.

I had a job I didn't like a year back. I was frustrated - I just thought: I can't change this, so change companies. Really like where I am now. I think I will apply this at the country level.

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With respect I disagree. This is a generational thing. Prior generations are living way beyond their means and so are attempting to push the cost onto the next via a generational transfer of wealth through housing. They buy at 3 times wages, young people now buy at 10 times wages. They pocket the difference of 7 times wages. All you need do is enact policy to create a shortage of homes together with loose lending.

Not quite the whole story, We also had eye-watering interest rates. Don't for a minute think we had any chance to pocket the other "7x" as you put it.

We had three HUGE advantages (as I see it).

No student debt

Wage inflation that only lagged a little behind house price inflation.

House prices were still about 3-4 x income, not yet inflated by LIAR LOANS (which NO boomer was allowed).

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Yep. I had a guy deliver my Tesco order the other day. He was about 23. He was living in a crap part of London subletting a council flat illegally from the real tenant. Said he was embarrassed to show people where he lived.

I told him I was going to start a political party that would crash house prices and make homes affordable for people like him. We couldn't really talk about it much as he had no idea about any of it. All he knew was that he could barely afford to live on his wage. Which is fair enough - good luck to him but as long as the majority are like this the situation will continue. Same for all those who bought at the right time and have no real understanding of why they are suddenly rich beyond their wildest dreams. They just know they don't want this trip to end.

Sales volumes say no. When Eurozone blows (days away?) people in the UK will have the illusions of the last decade wiped away big time. The coming property crash will literally make people fall to their knees and weep, but as said on here many times, that is now a sideshow.

Edited by dances with sheeple

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Awesome. So we've had 15 years so far of policies that suite the current boomers, and we only have another 10 to go.

Hey - what's 25 years of working under a biased system? Blink of an eye. I'll wait another 10 years quietly as I know the boomers won't vote with their conscience so we must wait for a majority then we can start our own debtocracy.

I sympathise with your frustration and sense of exclusion but let's get the problem analysed correctly. Age is an irrelevence. The divide is between rich and poor, or if you will capital and labour, as Fancypants points out. However even capital itself has even been subverted. By that I mean saving up and investing in something productive is a guaranteed way to poverty. Far better take a punt on property, water company shares, armaments or some PMs.

Accordingly the majority of capital isn't even employed usefully anymore, but understandably used in a purely speculative fashion,about as conducive to the benefit of mankind as playing poker. We are living through a time of ideological dogma with no organised alternative. If there are thosands who, like you, imagine the battle lines are drawn between those over forty five and those under, we are in more trouble than I ever imagined.

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With respect I disagree. This is a generational thing. Prior generations are living way beyond their means and so are attempting to push the cost onto the next via a generational transfer of wealth through housing. They buy at 3 times wages, young people now buy at 10 times wages. They pocket the difference of 7 times wages. All you need do is enact policy to create a shortage of homes together with loose lending.

So I agree some prior generationals are earning more than is necessary...top of their pay scales, blocking jobs, too old to learn new tricks.

Having a high paid job now makes no difference. I'm in my mid 30s, earning a lot and yet I've never managed to increase my wages enough to catch up with the house-price curve. I'm earning in the top 5% of salaried workers but I can't buy a 2-bed in London within zone 3, except maybe somewhere where all my neighbours are on benefit, like Tottenham. Note I'm not talking about buying in Hampstead or Kensington, just an area where most people work.

Beggars can't be choosers, start living in a undesirable place, then work yourself up if that is what you want...5% of the population can't want to live in hampstead if they did only <0.5% could afford to live there.

The line between owning and not owning has been drawn around buying before and after 1997. Because most people buy their first house at the same sort of age this means the divide is also by age.

Most people in British history rented, fact.....Most 1st time buyers who bought in recent past bought with a £2k deposit fees added to mortgage debt....go back 30 years a large 10% deposit was required and interest rates were 10% no paying the interest only.....that is what has pushed prices up.....today the rates are low but the debt is larger.........if you can't afford to save for a 10% deposit, you can't afford to buy, I mean buy not rent paying the interest only.

This generational gap will only get wider as the boomers retire, expecting the rest of us to keep them for 30 years as many will expect state benefits or final salary schemes that are not backed by real funds but rather drawn from company profits.

Why should anyone be expected to be kept.....the boomers will have to spend their houses to live....if they do the youngsters will have to save a deposit like many boomers did, while living in a one bed bedsit...their parents did not help them, they never expected them to.

Hopefully the whole thing will blow up big time rather than dragging on and on until things get very bad.

Why prolong the pain.....life is short, or better still life is a bitch, then you die. ;)

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The divide is between rich and poor, or if you will capital and labour, as Fancypants points out. However even capital itself has even been subverted. By that I mean saving up and investing in something productive is a guaranteed way to poverty. Far better take a punt on property, water company shares, armaments or some PMs. Accordingly the majority of capital isn't even employed usefully anymore, but understandably used in a purely speculative fashion, about as conducive to the benefit of mankind as playing poker. We are living through a time of ideological dogma with no organised alternative.

+1, great stuff. We need a new economic system suitable for the 21st century; free market industries that are societally productive, not destructive.

I've not read this yet, but it's next on my list:

The New Capitalist Manifesto: Building a Disruptively Better Business

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So I agree some prior generationals are earning more than is necessary...top of their pay scales, blocking jobs, too old to learn new tricks.

Beggars can't be choosers, start living in a undesirable place, then work yourself up if that is what you want...5% of the population can't want to live in hampstead if they did only <0.5% could afford to live there.

Most people in British history rented, fact.....Most 1st time buyers who bought in recent past bought with a £2k deposit fees added to mortgage debt....go back 30 years a large 10% deposit was required and interest rates were 10% no paying the interest only.....that is what has pushed prices up.....today the rates are low but the debt is larger.........if you can't afford to save for a 10% deposit, you can't afford to buy, I mean buy not rent paying the interest only.

Why should anyone be expected to be kept.....the boomers will have to spend their houses to live....if they do the youngsters will have to save a deposit like many boomers did, while living in a one bed bedsit...their parents did not help them, they never expected them to.

Why prolong the pain.....life is short, or better still life is a bitch, then you die. ;)

Disagree. This is back to the old "housing ladder" crud. As house prices will now remain static in real terms, if inflation stays fairly low then when you buy a dump you stay in it. Saving for a 10% deposit was done against a lower wage multiple. Back then it was 10% of a mortgage against 3 times earnings. Now it's 10% against a mortgage that is 5 times earnings times two people. It doesn't take a mathematics genius to work out that in real terms this generation are working harder for the same thing - a roof over their heads. That is a gap - a gap full of money. Where is that gap going? Banks and the owners of the house - a transfer of wealth from one generation to the next.

It simply is harder for young people now. My dad in-law was like you - just get on the ladder. I informed him that with his basic council job he would have been renting a room shared with 4 other people aged 30. By that time he had 3 kids. Had he been my age now he'd have delayed starting a family and his life may have been very different.

The boomers are being subsidised. They are getting over-generous pensions (on average) that everyone agrees are unsustainable (final salary schemes - no new entrants please!, retirement age up!).

Houses have gotten more expensive in real terms. FTBs are pledging more in real terms in mortgage agreements. They pay back the debt over the long term but the seller gets the cash (assuming they own outright) today. That money is going somewhere and it's from one generation to another.

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In Norwich - one supermarket worker I talked to is a laid off Toyota trained car mechanic.

Does a roaring trade in after hrs car mechanics/servicing to supplement minimum wages.

Where and who? Might have some work for him :)

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  • 338 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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