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Young People See The Housing Bubble

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The Spectator says the reason why the young are not buying is that they know housing is in a bubble: http://blogs.spectator.co.uk/coffeehouse/2013/06/why-dont-young-people-buy-homes-perhaps-they-spy-a-bubble/

It’s not hard to understand why teenagers growing up in houses that have lost a quarter of their value will be more suspicious of the idea of house ownership as a no-brainer financial investment.

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I have friends a bit younger than me. They are pretty clued in. They had their taste of debt with Uni loans and hate it. Don't want any more. They watch their pennies. Limit nights out. They live like frugul grandmas some of them

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The Spectator says the reason why the young are not buying is that they know housing is in a bubble: http://blogs.spectat...y-spy-a-bubble/

It’s not hard to understand why teenagers growing up in houses that have lost a quarter of their value will be more suspicious of the idea of house ownership as a no-brainer financial investment.

Yeah, because all those kids who grew up in the '90s and suffered in the same way refused to fall for it again and participate in the 2000's. And neither did their parents. :rolleyes:

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Yeah, because all those kids who grew up in the '90s and suffered in the same way refused to fall for it again and participate in the 2000's. And neither did their parents. :rolleyes:

Ah, but it was different in the 2000`s, money had been adapted so that if you bought property with it, it could only multiply. Actually I think the real reason the young are not buying is because they are skint, and houses prices are too high, many of them probably would if they could get the loans?

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I have friends a bit younger than me. They are pretty clued in. They had their taste of debt with Uni loans and hate it. Don't want any more. They watch their pennies. Limit nights out. They live like frugul grandmas some of them

Well, there's a surprise. Every generation has its misers and its spendthrifts, and shades between.

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Wait till the university students who have to pay £9000 fees start graduating.

The fiscal drag is going to be enormous.

Coincidentally at about the same the very first student loans start to get written off.

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I have friends a bit younger than me. They are pretty clued in. They had their taste of debt with Uni loans and hate it. Don't want any more. They watch their pennies. Limit nights out. They live like frugul grandmas some of them

This is exactly what happened to me. I graduated in 2004 and was surprised by how hard it was to clear £10k of RPI-linked student loans. When I was only making the basic automatic repayments I was hardly touching the principal because RPI was so high. Nominal wages are going nowhere, so debt principals are not shrinking 1970s-style. When my income went up I overpaid and cleared it. My friends whose incomes stayed flat are just as deep in debt as they were the day they left university.

Clearing a £10k debt when I only had myself to support was bad enough. £150k-£200k with a family to feed and interest rates not fixed for the life of the mortgage? No thanks banksters.

It goes without saying that today's graduates with £40k-£50k debts have much more to complain about. I just mean that my relatively small debt was an effective immunisation against a big mortgage.

Edited by Dorkins

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Young People See The Housing Bubble

The Housing-Bubble is everywhere. It is all around us. You can see it when you look out your window in your landlord's investment property/parents' home, or when you turn on your television. You can feel it when you go to work… when you go to church… when you pay your taxes. It is the world that has been pulled over your eyes to blind you from the truth. … That young people without bomad are slaves to banks, government and landlords and older owners who don't want to see their properties lose any of their hyperinflated value.

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Ah, but it was different in the 2000`s, money had been adapted so that if you bought property with it, it could only multiply. Actually I think the real reason the young are not buying is because they are skint, and houses prices are too high, many of them probably would if they could get the loans?

....and owned a permanent job that could repay the long loan along with everything else there is to pay for.....and the ones that do get a loan do not spend/waste money propping up the economy only keeping their fingers crossed that their new overpriced home will help make them (feel) richer.....wishful thinking in today's times. ;)

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....and owned a permanent job that could repay the long loan along with everything else there is to pay for.....and the ones that do get a loan do not spend/waste money propping up the economy only keeping their fingers crossed that their new overpriced home will help make them (feel) richer.....wishful thinking in today's times. ;)

Yep.

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Ah, but it was different in the 2000`s, money had been adapted so that if you bought property with it, it could only multiply. Actually I think the real reason the young are not buying is because they are skint, and houses prices are too high, many of them probably would if they could get the loans?

+1

I don't think attitudes have changed at all.

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I have met under 30s outside of HPC who have figured out that housing is in a bubble but they are a tiny minority. The vast majority would buy if they could get their hands on enough debt.

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I've asked a number of young people about their attitude to housing. Most would like to buy but have already given up on ever owning by their mid 20s. The ones recently based in the North of England were the only ones who seemed to think it was a possibility. All of those who live in London and the SE just laughed at the idea. Several mentioned working abroad as a distinct possibility. It seems that the young are going to get on with their lives rather than wait for the system to be fixed. Good for them I say.

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+1

I don't think attitudes have changed at all.

ipsos-mori-generations-immediately-buy-couple.png

There is a little difference there, with gen Y, but they are still young. My concern is that they will grow up and do like the "x", who appeared to have joined the trend in the past 2 years. BTW, why this sudden "x" change?? Not sure if this data makes sense, and is really reliable.

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I have met under 30s outside of HPC who have figured out that housing is in a bubble but they are a tiny minority. The vast majority would buy if they could get their hands on enough debt.

Also, worth repeating

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I have met under 30s outside of HPC who have figured out that housing is in a bubble but they are a tiny minority. The vast majority would buy if they could get their hands on enough debt.

Yup. Where I work (a city known for tech in the SE, so eminently guessable) the young people earn (relatively) decent money - probably between 35-45k. Every single one of the 26-34 (except me) demographic is buying or looking to buy - at post 2007 prices. I used to be extremely vocal, I've stopped because it is futile. They are bending over backwards (or maybe a metaphorical bending forwards is more apt) for the sellers, afraid to make offers that aren't very, very close to asking price and believing all the EA hype. The sellers sound awful in general - one was hassling the poor chap handing over a quarter of a million who just wanted a point clarified and threatened him that he'd pull out if he asked any more questions (as well you would if you were spending a ridiculous sum like that), but everyone thinks that's just how it is and prices are going to take off.

I was head in hands the other day listening to talk about how their mortgage offer rate had a high interest rate (not enough deposit to get the best deals - though it was still a very healthy sum for a chap his age to have saved), but that in a couple of years when prices have risen they'll have the equity to have a better deal. Another is waiting for help to buy to kick in next year and saving furiously to 'take advantage'.

These are *incredibly* intelligent people in general, but as you say, if they can get their hands on the requisite debt, they go for it. I feel like a complete cassandra, and it's me who looks insane to them - probably because societal insanity has indeed affected my mentality. Meanwhile, the interest on my savings covers my rent (call me Gen Y Bruce), so who cares!

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Yup. Where I work (a city known for tech in the SE, so eminently guessable) the young people earn (relatively) decent money - probably between 35-45k. Every single one of the 26-34 (except me) demographic is buying or looking to buy - at post 2007 prices. I used to be extremely vocal, I've stopped because it is futile. They are bending over backwards (or maybe a metaphorical bending forwards is more apt) for the sellers, afraid to make offers that aren't very, very close to asking price and believing all the EA hype. The sellers sound awful in general - one was hassling the poor chap handing over a quarter of a million who just wanted a point clarified and threatened him that he'd pull out if he asked any more questions (as well you would if you were spending a ridiculous sum like that), but everyone thinks that's just how it is and prices are going to take off.

I was head in hands the other day listening to talk about how their mortgage offer rate had a high interest rate (not enough deposit to get the best deals - though it was still a very healthy sum for a chap his age to have saved), but that in a couple of years when prices have risen they'll have the equity to have a better deal. Another is waiting for help to buy to kick in next year and saving furiously to 'take advantage'.

These are *incredibly* intelligent people in general, but as you say, if they can get their hands on the requisite debt, they go for it. I feel like a complete cassandra, and it's me who looks insane to them - probably because societal insanity has indeed affected my mentality. Meanwhile, the interest on my savings covers my rent (call me Gen Y Bruce), so who cares!

+1

The young people I've known in the past couple of years are rabidly keen to buy flats/houses, on top of servicing their large student loans. They too think I'm mad to not buy and to be talking about the risks of bubbles and debt (but they've been too polite to say I'm mad).

And so far it's working out for them and I look like an idiot.

I've been weakening lately and am thinking of buying myself :(

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+1

The young people I've known in the past couple of years are rabidly keen to buy flats/houses, on top of servicing their large student loans. They too think I'm mad to not buy and to be talking about the risks of bubbles and debt (but they've been too polite to say I'm mad).

And so far it's working out for them and I look like an idiot.

I've been weakening lately and am thinking of buying myself :(

I am happy with my housing situation as it offers me incredible financial flexibility to do whatever the hell I like. 13 years ago straight out of uni I felt rather differently, and was saving like an utter demon to buy a place outright, only to see prices rising at £2-3 for every pound saved over the next 7 years.

The difference I think between me and them is I saved with the explicit intention to buy without debt and, now have a very reasonable sum and know exactly what it takes to save that much money, and what that sum represents in real terms of living a pretty simple life over a large part of my life.

Despite my username, I don't think denying myself luxuries any more is worth it. That the sum still wouldn't buy anything reasonable near Cambridge (outright) seems so ludicrous to me that it hardens my resolve. They on the other hand play with virtual sums, and have a much less realistic idea of the compromises that they will have to make to their lifestyle to pay for their boxes.. At least I made those compromises without the debt hanging over my head. Now I'm the one that's free - at least, that's the way to think that keeps me semi-sane.

edit typos.

Edited by Frugal Git

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Agreed. Most under 30s I know are doing whatever they can to get on the housing bubble - and, like others are reporting here, they are lapping up EA lies. They don't seem fazed by the idea of paying 1/4 million for a 1 BR flat way south of the river in London either.

Glad I am out of it now.

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I see Aldi have started taking on apprentices, noticed the lapel badge on the lad serving me had the words Store Assistant replaced by 'Apprentice'. On walking out I saw a poster advertising this new approach, proudly emphasising the now £5 an hour stipend for upto two years.

F*** that I thought and left.

I'll try my luck at Lidl now.

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  • 243 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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