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RichM

Why The Family Home Is Starting To Fill Up Again

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Why the family home is starting to fill up again

Funnily enough the wife and I had a conversation only yesterday about the possibility of moving in a friend from church who has a mortgage and no one else living with her. We get good-priced accom and space for a kid, she gets help with mortgage. Only an idea at the moment, but could be the way to go until prices moderate...

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What's interesting about this is the bulls' assumption that however high house prices get, peeps will do whatever it takes to buy one. So there is another way...and a lot more of this could kill hpi, for a long, long time.

I know this is going to get the "hpc cliche no.16" response from some, but how long can this irrational economic behaviour go on?

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Actually the illogical bull argument I like is the one about "it was hard in my day, you all waste money, if you weren't out there chavvin' it, you could afford the mortgage, so go buy"

Yes, but given that so many are now spending not saving, doesn't that mean that prices are more likely to fall than before...?

I mean, either FTB's are industrious savers who just can't afford property - in which case demand and prices will go down, or they are debt ridden lager louts who -erm, can't afford property, in which case...

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One of the biggest factors is going to be graduate debt. Things are alrady not too good - soemthing like £10-13K debt which is taking nearly a decade for the majority to pay off in full. Come next year tuition fees will increase that debt to maybe £20K a pop at the end of the course. A double income couple buying are now more likely to a be a double graduate couple - £40K of debt, sort of makes even the historic 3.5x single income HP ratio start to look susceptible with an environment of ever increasing energy, health and service costs and a consumer goods deflationary run that is about to come to an end as commodity prices rise and even China begin to struggle to reduce costs further.

There is absolutely no guarantee that property demand can no be elastic and go both ways up and down and the same can be said for migration (at least migration of people whose earnings power is anything like the level for even a cheap mortage or low-number shared rental).

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  • 302 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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