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House Prices Are Not That High We Are Just Poor.

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Basically everyone is saying house prices are too high and compared to salary multiples i completely agree, the premise of my argument is so what! What we fail to see us that we are becoming poor as a nation.

Just like the welfare state/nhs will fail because we can no longer afford to pay for it we as a nation are going to be unable to afford good quality housing with all the mod cons! Just because we are used to being able to afford something in the past does not mean we will be able to do so in the future. If wage arbitration and globalisation mean that we can only have average salaries of 25k, then we can only really afford say 65k houses, i think even 3x multiples will soon be unaffordable due to inflation of essential items. We are a poor nation with a bloated financial sector that will collapse and not a large enough productive economy to sustain the standard of living inc housing that we are used to so the future will be kit houses on small plots! Get over it nobody owes us a high standard if living it has to be earn't and we ain't doing that.

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Basically everyone is saying house prices are too high and compared to salary multiples i completely agree, the premise of my argument is so what! What we fail to see us that we are becoming poor as a nation.

Just like the welfare state/nhs will fail because we can no longer afford to pay for it we as a nation are going to be unable to afford good quality housing with all the mod cons! Just because we are used to being able to afford something in the past does not mean we will be able to do so in the future. If wage arbitration and globalisation mean that we can only have average salaries of 25k, then we can only really afford say 65k houses, i think even 3x multiples will soon be unaffordable due to inflation of essential items. We are a poor nation with a bloated financial sector that will collapse and not a large enough productive economy to sustain the standard of living inc housing that we are used to so the future will be kit houses on small plots! Get over it nobody owes us a high standard if living it has to be earn't and we ain't doing that.

The largest part in the costs of a house is the land.

Edited by Hugh Janus

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The largest part in the costs of house is the land.

reverse calculation...the cost of the land is the sales price minus cost to build.

If the prices fell, then the big loser is the land value.

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Basically everyone is saying house prices are too high and compared to salary multiples i completely agree, the premise of my argument is so what! What we fail to see us that we are becoming poor as a nation.

Just like the welfare state/nhs will fail because we can no longer afford to pay for it we as a nation are going to be unable to afford good quality housing with all the mod cons! Just because we are used to being able to afford something in the past does not mean we will be able to do so in the future. If wage arbitration and globalisation mean that we can only have average salaries of 25k, then we can only really afford say 65k houses, i think even 3x multiples will soon be unaffordable due to inflation of essential items. We are a poor nation with a bloated financial sector that will collapse and not a large enough productive economy to sustain the standard of living inc housing that we are used to so the future will be kit houses on small plots! Get over it nobody owes us a high standard if living it has to be earn't and we ain't doing that.

An interesting way to look at it! The problem is we have govts who allow a false market in housing to arise, by very lax lending. That benefits only those who buy at the beginning of the cycle after a crash - ie 1994 to 97 buyers are best off at present. Our inability to prosper as an exporting nation/ + financial crisis, should have resulted in a fall in house prices and the underlying land price dropping a great deal. Only because of artificially held down rates and lending of 4 x incomes or more, has this market survived. None of the current policies including QE will prove to have helped - should not have happened except for about 1 yr after 2008. Sorry, but History will judge all of it and Carney to have been very wrong.

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Basically everyone is saying house prices are too high and compared to salary multiples i completely agree, the premise of my argument is so what! What we fail to see us that we are becoming poor as a nation.

Just like the welfare state/nhs will fail because we can no longer afford to pay for it we as a nation are going to be unable to afford good quality housing with all the mod cons! Just because we are used to being able to afford something in the past does not mean we will be able to do so in the future. If wage arbitration and globalisation mean that we can only have average salaries of 25k, then we can only really afford say 65k houses, i think even 3x multiples will soon be unaffordable due to inflation of essential items. We are a poor nation with a bloated financial sector that will collapse and not a large enough productive economy to sustain the standard of living inc housing that we are used to so the future will be kit houses on small plots! Get over it nobody owes us a high standard if living it has to be earn't and we ain't doing that.

Yes, wages have not risen enough for the majority, but if wages were to be doubled for everyone overnight, house prices would also double. It's the amount of credit being offered that is out of balance, this is what's pushing up house prices. Some people are dumb enough to take out 5-6 times income mortgages, and they outbid others for the houses. The sensible people are not willing to get that much into debt, at the moment the government have been protecting the people who over paid for houses, because the banks are in trouble, as soon as the banks rebuild their balance sheets normal business practices can resume.

Edited by enrieb

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reverse calculation...the cost of the land is the sales price minus cost to build.

If the prices fell, then the big loser is the land value.

Even easier - find two identical houses, one in London, one in, say, inner city bradford.

Difference in price is the difference in land value.

The OP is flat wrong. We don't have glamorous living beyond our means houses, in fact we have tiny houses compared to most similar countries. They almost certainly aren't worth even 65k as structures. They are expensive because land is used primarily as a mechanism for people farming. .

Edited by (Blizzard)

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Even easier - find two identical houses, one in London, one in, say, inner city bradford.

Difference in price is the difference in land value.

The OP is flat wrong. We don't have glamorous living beyond our means houses, in fact we have tiny houses compared to most similar countries. They almost certainly aren't worth even 65k as structures. They are expensive because land is used primarily as a mechanism for people farming. .

and, financialisation spanks up the price making everyone who wants to buy and has normal payday resources, can only do so with a loan...we are all trapped by bailing out the lenders...when in reality, we dont need them to financialise basic shelter at all.

Its not us that are poor, its the banks making us so.

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and, financialisation spanks up the price making everyone who wants to buy and has normal payday resources, can only do so with a loan...we are all trapped by bailing out the lenders...when in reality, we dont need them to financialise basic shelter at all.

Its not us that are poor, its the banks making us so.

Yep. In fact, house prices are pretty much just a measure of how much economically productive people have to pay to support the parasitical classes.

If anything, the fact we can support such mental prices suggests that our economy is surprisingly strong. Imagine what we could afford if prices were reasonable.

Edited by (Blizzard)

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Yes, wages have not risen enough for the majority, but if wages were to be doubled for everyone overnight, house prices would also double. It's the amount of credit being offered that is out of balance, this is what's pushing up house prices. Some people are dumb enough to take out 5-6 times income mortgages, and they outbid others for the houses. The sensible people are not willing to get that much into debt, at the moment the government have been protecting the people who over paid for houses, because the banks are in trouble, as soon as the banks rebuild their balance sheets normal business practices can resume.

UK banks aren't making 5-6x mortgages available again, Osborne's trillion pound borrowing orgy and market subsidies are responsible for sustaining the UK's housing bubble. The moment the govt can no longer roll over its debts cheaply the market will collapse and take the economy with it. There will be no return to business as usual.

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Basically everyone is saying house prices are too high and compared to salary multiples i completely agree, the premise of my argument is so what! What we fail to see us that we are becoming poor as a nation....

I would say both. We are becoming poorer and poorer as a nation. But the price of our houses is very high - compare like for like with other countries.

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Well it does not take the IQ of the proverbial Chinese Archbishop to realise that wages and house prices are moving on opposite directions and that the only way to fill the gap is with more debt. Sooner or later one of those two has got to give.

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...Get over it nobody owes us a high standard if living it has to be earn't and we ain't doing that.

We should lay down and take it? Just accept we've been shafted and ripped off, as they sold all our assets and devalued our labour, captured our democracy, whilst pacifying us with a dumb media, with the usual misdirection and distractions. :unsure:

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The UK is an extremely wealthy country. OP is confusing money with wealth. Money isnt wealth but a future claim on wealth. The issue is distribution with the wealth concentrated in very few hands. We could make everyone wealthier (I.e by allowing housing costs to fall so more people have access to housing) but we don't via various mechanisms designed to keep the wealth in fewer hands and prevent it expanding (partly why the government has such difficulty getting decent levels of growth).

Other long terms indicators such as education (our ability to produce high quality goods and services) and healthcare (our well being - an important aspect of wealth) are flashing red too.

It is the govts focus on GDP in the aggregate rather than average living standards which is the problem.

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Basically everyone is saying house prices are too high and compared to salary multiples i completely agree, the premise of my argument is so what! What we fail to see us that we are becoming poor as a nation.

Just like the welfare state/nhs will fail because we can no longer afford to pay for it we as a nation are going to be unable to afford good quality housing with all the mod cons! Just because we are used to being able to afford something in the past does not mean we will be able to do so in the future. If wage arbitration and globalisation mean that we can only have average salaries of 25k, then we can only really afford say 65k houses, i think even 3x multiples will soon be unaffordable due to inflation of essential items. We are a poor nation with a bloated financial sector that will collapse and not a large enough productive economy to sustain the standard of living inc housing that we are used to so the future will be kit houses on small plots! Get over it nobody owes us a high standard if living it has to be earn't and we ain't doing that.

Having just been to the pub (like the author?), I agree with most of this.

Apart from the exclamation marks.

Where's the "bump when drunk thread"? See you there...

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If the housing market was not rigged by the Government and Banksters house prices would deflate.

If I am selling expensive items and my customers are becoming poorer, I would need to lower my prices otherwise nobody is going to be able to afford my goods and sales collapse.

The problems is that wages are deflating and governments won't allow assed deflation to match the wage deflation.

In reality wage deflation should not be a problems and we should build a system that can cope with it.

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I think OP has a point.

Consider Argentina. Before WW2 it was one of the World's most prosperous countries with living standards equivalent to Western Europe at the time. Buenos Aires has many beautiful, grand apartment buildings built in this era standing testament to this - they called the city the Paris of the Americas. The average Argentinian family at the time would have had a pretty nice home. Nowadays things are quite different for the average family there, living in cramped and poor housing. What happened? Their industries were decimated and their economy ruined by poor management, corrupt government and social conflict, particularly exploitation of the country's resources by the ruling elite. At some point the average Argentinian went from being able to afford a nice home to not being able to do that. It's not that house prices went 'too high'. They just got poor. Their economy doesn't have the capacity to construct and maintain 'Western' standard accommodation any more. Are 'high' house prices in the UK really a symptom of a similar long term decline, rather than just a temporary bubble due to low interest rates?

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If the housing market was not rigged by the Government and Banksters house prices would deflate.

If I am selling expensive items and my customers are becoming poorer, I would need to lower my prices otherwise nobody is going to be able to afford my goods and sales collapse.

snip.

nonsense...you just offer them cheaper credit and your prices can rise to the moon...or beyond I tell Ye.

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Are 'high' house prices in the UK really a symptom of a similar long term decline, rather than just a temporary bubble due to low interest rates?

No. Compare house price inflation over the last 20-30 years with other necessities like food or clothing.

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land is used primarily as a mechanism for people farming. .

Yes. What is insidious is the way that a lifetime (and eventually, several lifetimes') worth of debt slavery is pushed to people under the guise of 'getting on the ladder' and eventually owning freehold property outright.

At least medieval serfs and Victorian industrial workers weren't lied to - they knew they were slaves.

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No. Compare house price inflation over the last 20-30 years with other necessities like food or clothing.

Yes. House price inflation over the last 20-30 years has been used to compensate for and disguise a secular fall in the UK's international standing. Just look at the enormous trade deficit. Even our food and clothing is imported. The comparison with Argentina is well made. A Third World economy based on borrowing and consumption.

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Basically everyone is saying house prices are too high and compared to salary multiples i completely agree, the premise of my argument is so what! What we fail to see us that we are becoming poor as a nation.

Just like the welfare state/nhs will fail because we can no longer afford to pay for it we as a nation are going to be unable to afford good quality housing with all the mod cons! Just because we are used to being able to afford something in the past does not mean we will be able to do so in the future. If wage arbitration and globalisation mean that we can only have average salaries of 25k, then we can only really afford say 65k houses, i think even 3x multiples will soon be unaffordable due to inflation of essential items. We are a poor nation with a bloated financial sector that will collapse and not a large enough productive economy to sustain the standard of living inc housing that we are used to so the future will be kit houses on small plots! Get over it nobody owes us a high standard if living it has to be earn't and we ain't doing that.

Some truth to that. It should be obvious to many that Britain is in decline.

The UK economy looks more and more like a third world economy with a tiny elite, a tiny middle class and a large majority struggling to make ends meet.

I found this article in interesting

Let's admit it: Britain is now a developing country

How can any nation that came up with the BBC and the NHS be considered in the same breath as India or China? Let me refer you to one of the first lines of The Great Indian Novel by Shashi Tharoor, in which a wise old man warns International Monetary Fund officials and foreign dignatories: "India is not, as people keep calling it, an underdeveloped country, but rather, in the context of its history and cultural heritage, a highly developed one in an advanced state of decay."

Stop thinking of development as a process that only goes in one direction, or which affects a nation's people equally, and it becomes much easier to see how Britain is going backwards.

Even banana republics have cash: it just ends up in the hands of a very few people – ask the bank managers of Switzerland or the hotel concierges of Paris. In Britain, we have become used to having our resources skimmed off by a small cadre of the international elite, who often don't feel obliged to leave much behind for our tax officials. An Africa specialist could look at the City and recognise in it a 21st-century version of a resource curse: something generating oodles of money for a tiny group of people, often foreign, yet whose demands distort the rest of the economy. Sure, Britain has iPads and broadband – but it also has oversubscribed foodbanks. And the concept of the working poor that has dominated political debate since the crash is also something straight out of development textbooks.

Nobel laureate Amartya Sen defined development as "the removal of various types of unfreedoms that leave people with little choice and little opportunity of exercising their reasoned agency". Yet when it comes to social mobility, Britain now has the worst record of all advanced countries – and will soon be overtaken by the newly rich countries of east Asia.

And it's when wealth is concentrated in too few hands that the forces of law and order get used as a militia for the elite – and peaceful dissent gets stamped upon. That's why police are now a presence on our business-friendly university campuses; it also explains why Theresa May had the front to try to deport Trenton Oldfield for disrupting a student rowing competition (sorry, the Boat Race).

This isn't a sub-Rhodesian moan about Britain going to the dogs. But as my colleague Larry Elliott said in his most recent book, Going South, the sooner we puncture our own complacency at having created a rich economy for the few, and think of ourselves as in dire need of a proper economic development plan, the better.

Otherwise, we're well set to corner the world market in pig semen. The United Kingdom of spoink.

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