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Houses: The Greatest Investment Delusion Known To Man

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It's not unknown for online newspapers to run deliberately contrarian stories to raise their hit count, but this one is closed to comments. Still, it's some nice bear food.

Comments seem open for me - maybe you're on a blacklist ;)

For this you cannot blame Mr and Mrs Average, whether driven by greed or fear. This is the result of a massive failure of public policy

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Which must make London / SE the even greater investment delusion known to man.

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For this you cannot blame Mr and Mrs Average, whether driven by greed or fear. This is the result of a massive failure of public policy: tight control of building land and massive subsidies to home-ownership, combined with a lax immigration policy. I am not saying that each of these is necessarily wrong but the combination of the three has been catastrophic – wasting resources, distorting the economy, leading to misery and frustration for millions of people and diverting their energies into the zero-sum game of climbing the housing ladder.

and he doesn't even blame the boomers :o

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The delusion comes about from not factoring in on going costs. Somehow the perennial refurbs get lost in the equation and it all becomes pure profit at the point of sale.

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zero-sum game of climbing the housing ladder.

I'm sure it enriches someone. I wonder who? B)

The whole UK economy seems to be engaged in a 'zero sum game'

Edited by aSecureTenant

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It nearly all revolves around bankers interests to the extent that the banking system actively undermines the competition in other sectors of the UK economy for example through lower levels of investment and harsh treatment of SMEs as well as larger businesses when they go through bad patches.

Edited by billybong

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In the comments, one person really needs to take a look at Japanese house prices. They make a wonderful assumption that a Tokyo resident who bought 24 years ago must be sitting on a nice bit of equity...

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I'm sure it enriches someone. I wonder who? B)

The whole UK economy seems to be engaged in a 'zero sum game'

Negative sum game. Everybody leaves with less than they started with.

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Dalek_dave in the comments is the gift that keeps on giving (although it won't do much for the average HPCer's blood-pressure).

The audience must have been full of Dalek_dave types for Osborne's keynote speech on the economy last September at 1 Commercial Street - a property development building site.

Edited by billybong

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Banks have pulled the greatest con trick of all time persuading people to borrow increasing amounts of money to buy houses.

They have captured our quality of life. The credit expansion required to push house prices higher mean that people sell at nominally higher prices but their real return is way less because the pounds don't buy as much. Meanwhile the banks get their mortgage payments and bonuses early on when the pounds are still worth more.

Boomers selling now would have been better off if house prices had only risen in line with wages, because the pounds they get when downsizing would have still bought more fuel, energy, food etc. All they do celebrating higher nominal house prices, is sentence their children and grandchildren to a life of debt slavery.

Joint income mortgages have turned women who didn't want to work into hamsters on wheels. Each spin of the wheel means higher bonuses for bankers. If houses didn't cost as much, there wouldn't be so much debt to service and any second incomes (from women who chose to work) could have been disposable income spent on luxuries, holidays, etc.

It's a Trianjugular grip. Banks, landowners and Governbankments have us by the throat. They all love higher house prices. Banks because they lend so make more money the more people borrow, cue longer mortgage terms to "help" people (pay even more interest). Landowners because high house prices revalue their land much higher (The UK is rare in that our upper chamber, the House of Lords, is unelected) Governbankments love rising house prices because it means people have to work more hours to buy one and the more hours they work the more tax they pay to a Governbankment that doesn't have any money of it's own, except what it takes from us in tax.

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Banks have pulled the greatest con trick of all time persuading people to borrow increasing amounts of money to buy houses.

They have captured our quality of life. The credit expansion required to push house prices higher mean that people sell at nominally higher prices but their real return is way less because the pounds don't buy as much. Meanwhile the banks get their mortgage payments and bonuses early on when the pounds are still worth more.

Boomers selling now would have been better off if house prices had only risen in line with wages, because the pounds they get when downsizing would have still bought more fuel, energy, food etc. All they do celebrating higher nominal house prices, is sentence their children and grandchildren to a life of debt slavery.

Joint income mortgages have turned women who didn't want to work into hamsters on wheels. Each spin of the wheel means higher bonuses for bankers. If houses didn't cost as much, there wouldn't be so much debt to service and any second incomes (from women who chose to work) could have been disposable income spent on luxuries, holidays, etc.

It's a Trianjugular grip. Banks, landowners and Governbankments have us by the throat. They all love higher house prices. Banks because they lend so make more money the more people borrow, cue longer mortgage terms to "help" people (pay even more interest). Landowners because high house prices revalue their land much higher (The UK is rare in that our upper chamber, the House of Lords, is unelected) Governbankments love rising house prices because it means people have to work more hours to buy one and the more hours they work the more tax they pay to a Governbankment that doesn't have any money of it's own, except what it takes from us in tax.

Don't forget the media who make money from the Property adverts & existing home-owners who can gain via MEW.

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Banks have pulled the greatest con trick of all time persuading people to borrow increasing amounts of money to buy houses.

They have captured our quality of life. The credit expansion required to push house prices higher mean that people sell at nominally higher prices but their real return is way less because the pounds don't buy as much. Meanwhile the banks get their mortgage payments and bonuses early on when the pounds are still worth more.

Boomers selling now would have been better off if house prices had only risen in line with wages, because the pounds they get when downsizing would have still bought more fuel, energy, food etc. All they do celebrating higher nominal house prices, is sentence their children and grandchildren to a life of debt slavery.

Joint income mortgages have turned women who didn't want to work into hamsters on wheels. Each spin of the wheel means higher bonuses for bankers. If houses didn't cost as much, there wouldn't be so much debt to service and any second incomes (from women who chose to work) could have been disposable income spent on luxuries, holidays, etc.

It's a Trianjugular grip. Banks, landowners and Governbankments have us by the throat. They all love higher house prices. Banks because they lend so make more money the more people borrow, cue longer mortgage terms to "help" people (pay even more interest). Landowners because high house prices revalue their land much higher (The UK is rare in that our upper chamber, the House of Lords, is unelected) Governbankments love rising house prices because it means people have to work more hours to buy one and the more hours they work the more tax they pay to a Governbankment that doesn't have any money of it's own, except what it takes from us in tax.

+100

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Boomers selling now would have been better off if house prices had only risen in line with wages, because the pounds they get when downsizing would have still bought more fuel, energy, food etc. All they do celebrating higher nominal house prices, is sentence their children and grandchildren to a life of debt slavery.

Good point.

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Squared. You really have to be pretty thick or one of a very small cohort to think HPI has done you any favours.

Sadly lots of people think it is wonderful - even in many cases people who have lost from it, think it is great.

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Governbankment!

Gotta love dc's portmaneau creations.

Funny how that one only seems to have been noticed by some regulars in the past week. I've been using it since 2012:

https://www.google.co.uk/search?q=governbankment+democorruptcy+hpc+site:www.housepricecrash.co.uk&biw=1920&bih=961

My "trianjugular grip" is new today and has no matches on a google search. :lol:

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Banks have pulled the greatest con trick of all time persuading people to borrow increasing amounts of money to buy houses.

They have captured our quality of life. The credit expansion required to push house prices higher mean that people sell at nominally higher prices but their real return is way less because the pounds don't buy as much. Meanwhile the banks get their mortgage payments and bonuses early on when the pounds are still worth more.

Boomers selling now would have been better off if house prices had only risen in line with wages, because the pounds they get when downsizing would have still bought more fuel, energy, food etc. All they do celebrating higher nominal house prices, is sentence their children and grandchildren to a life of debt slavery.

Joint income mortgages have turned women who didn't want to work into hamsters on wheels. Each spin of the wheel means higher bonuses for bankers. If houses didn't cost as much, there wouldn't be so much debt to service and any second incomes (from women who chose to work) could have been disposable income spent on luxuries, holidays, etc.

It's a Trianjugular grip. Banks, landowners and Governbankments have us by the throat. They all love higher house prices. Banks because they lend so make more money the more people borrow, cue longer mortgage terms to "help" people (pay even more interest). Landowners because high house prices revalue their land much higher (The UK is rare in that our upper chamber, the House of Lords, is unelected) Governbankments love rising house prices because it means people have to work more hours to buy one and the more hours they work the more tax they pay to a Governbankment that doesn't have any money of it's own, except what it takes from us in tax.

Top notch posts like this one are why I keep coming back to this site :)

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Negative sum game. Everybody leaves with less than they started with.

That has probably been true this century. Ironically I'd say anyone buying between 1992 and 1997, particularly in the midst of no stamp duty in a falling market has not lost out. I'd be surprised if anyone in London/South East really makes on property these days. With stamp duty of 3-7% and associated fees thrown in when buying/selling, you'd need a 10% gain just to get even.

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