Years Of High House Prices And Its Psychological Impact

[canbuywontbuy]

I've had years and years of sitting on the sidelines because it's madness sinking your lifetime savings + taking out a massive mortgage for a 2 or 3-bed semi for your family when interest rates are on the floor and the economy is in the crapper, and you genuinely feel prices are 2 to 3 times over-valued, and there's a dozen black swans ready to tip the whole thing over. However, years of waiting have taken its toll on me....maybe you can relate to some or all of the following:-

• I have a general resentment toward the boomer generation. My dad's street is full of 4 and 5 bedders occupied almost exclusively by retired couples and widowers. I just see it as utter madness that housing is so disproportionate in the UK. The resentment is unfair, and I accept that. They did nothing wrong. The boomer generation were just doing their best for their families, and they're not to blame for government policy. However, I can't help this resentment. They lived in a to-never-be-repeated truly golden era. My resentment rises when I'm told to get on with it and just buy, because prices always rise.
• If house prices were truly reasonable, I could get on with my life in a more innocent way. I would never join a site called housepricecrash.co.uk and it probably wouldn't exist anyway. Nobody expects a house to be cheap, but when they are two or three times over what you consider fair value, and it's the biggest cost you'll ever outlay, then that gives you pause. Now I am trapped. Not by financial constraint or the inability to borrow (see my username), but from the idea that borrowing a shit-ton of money in today's economy is a massive gamble. It means I'm in a perpetual limbo, and as the years pass, being part of the "precariat" chips away at my original spirit (ambitious, aspirational) - now I feel that rather than me forcing my own momentum onto the world, it's forcing its momentum onto me. I am controlled, rather than in control. These days I am cynical, not aspirational. That is not good. Not good at all.
• The hue and saturation of the economy has shifted subtly over the years to the point now that you're forced to be a big gambler one way or the other. Nobody can make modest decisions any more, and yet we have modest wages with which to make our immodest gambles. Your decisions have to be bold and one-way, and they could end up being monstrous fu3k-ups. It's like playing Forex with massive leverage and not much actual money of your own. Your margin call is a heartbeat away. As someone who makes stuff for a living, and doesn't give a shit about investing, I hate this "new normal". So many "retail" investors are getting burned and will get burned.
• I've lived in 3 properties in the last 5 years. Say no more. I'm a fully signed-up member of the precariat.
• I have some envy towards immigrants in that they're in a good position. They have leverage between their home country and the UK. Even if they don't take advantage of it (and spend as much as they earn in the UK), it's there. I have no such leverage, and I have no country I can go to that will pay me 3 to 7 times the UK's minimum wage as their minimum wage. If that country existed, I'd be over there, just like EEs are in the UK. I'd be earning and saving for my property in the UK.
• the situation is so artificial - it's designed to create more and more greater fools. I resent being a part of it and will NOT be a part of it.

Ah no more....just thought it might be interesting to get some anecdotes on the psychological impact of delaying a fundamental decision for years and years because of an artificial constraint.

[dances with sheeple]

The flipside is that when it pops those who thought it always went up, like some natural escalator or something, are going to be devastated. Better to be depressed and debt free/renting cheaply than into a bank for 400k and flirting with NE IMO.

[HovelinHove]

I sympathize with you. I was in that position from 2003-2011 when I stepped out of the market after a divorce. It has to be one of the most destructive things in the UK, destroying the aspirations of anyone not already in the game. I have had 5 sane years in Canada where I had a 70%mortgage of 2 times my income and owned a 4+1 bed house with a pool (detached of course). I will soon be heading back to the UK for family reasons...I am hoping that things will turn at some point otherwise I will soon feel depressed again.

[canbuywontbuy]

The flipside is that when it pops those who thought it always went up, like some natural escalator or something, are going to be devastated. Better to be depressed and debt free/renting cheaply than into a bank for 400k and flirting with NE IMO.

True, but "she cannae hold on fer much longer, cap'n" in my situation - getting so sick of it.

[Barnsey]

You've pretty much summed up my exact thought process, which is becoming more agitated every week, particularly the resentment factor. I know it's not healthy but simply unavoidable when faced "them" on a daily basis. The pre retirement colleagues being the grumpy ones yet blissfully unaware of their wonderful final salary pension probably ceasing to exist by the time I get a bite, the actual price of their house in 2016 and so on.

I'm appreciating renting without ties, trying to enjoy life and saving at a modest pace should our wishes actually materialise in the near future. The winds of change are certainly blowing our way all of a sudden!

[RentingForever]

You'll destroy yourself by focusing solely on the (many) negative aspects of all this. We're mostly powerless with respect to the political/economics decisions behind this, so what's the use of putting all your energy into railing against it?

You need to feel in control, so look at what freedoms your situation gives you compared to owning. You're much more flexible when new job opportunities come up. You're not saddled with debt. You presumably have some money so how can you put that to a good use that benefits you? Most importantly, once you get out of the mindset that you have to 'own' then it's quite freeing mentally. For example I'm thinking (at 48!) of packing in the job, travelling for a while, then coming back to retrain with a masters. All that is not only possible when you have the flexibility of renting, it's something you wouldn't even think of if you had a mortgage. One life - live it actively how you want to, not passively how you feel you're forced to.

But yeah, sometimes all you want to do is rail against the system. Nothing wrong with that, just don't let it run your life. You *are* in control, you can choose how you live it.

Edited July 8, 2016 by RentingForever

[Untoward]

I've had years and years of sitting on the sidelines because it's madness sinking your lifetime savings + taking out a massive mortgage for a 2 or 3-bed semi for your family when interest rates are on the floor and the economy is in the crapper, and you genuinely feel prices are 2 to 3 times over-valued, and there's a dozen black swans ready to tip the whole thing over. However, years of waiting have taken its toll on me....maybe you can relate to some or all of the following:-

• I have a general resentment toward the boomer generation. My dad's street is full of 4 and 5 bedders occupied almost exclusively by retired couples and widowers. I just see it as utter madness that housing is so disproportionate in the UK. The resentment is unfair, and I accept that. They did nothing wrong. The boomer generation were just doing their best for their families, and they're not to blame for government policy. However, I can't help this resentment. They lived in a to-never-be-repeated truly golden era. My resentment rises when I'm told to get on with it and just buy, because prices always rise.
• If house prices were truly reasonable, I could get on with my life in a more innocent way. I would never join a site called housepricecrash.co.uk and it probably wouldn't exist anyway. Nobody expects a house to be cheap, but when they are two or three times over what you consider fair value, and it's the biggest cost you'll ever outlay, then that gives you pause. Now I am trapped. Not by financial constraint or the inability to borrow (see my username), but from the idea that borrowing a shit-ton of money in today's economy is a massive gamble. It means I'm in a perpetual limbo, and as the years pass, being part of the "precariat" chips away at my original spirit (ambitious, aspirational) - now I feel that rather than me forcing my own momentum onto the world, it's forcing its momentum onto me. I am controlled, rather than in control. These days I am cynical, not aspirational. That is not good. Not good at all.
• The hue and saturation of the economy has shifted subtly over the years to the point now that you're forced to be a big gambler one way or the other. Nobody can make modest decisions any more, and yet we have modest wages with which to make our immodest gambles. Your decisions have to be bold and one-way, and they could end up being monstrous fu3k-ups. It's like playing Forex with massive leverage and not much actual money of your own. Your margin call is a heartbeat away. As someone who makes stuff for a living, and doesn't give a shit about investing, I hate this "new normal". So many "retail" investors are getting burned and will get burned.
• I've lived in 3 properties in the last 5 years. Say no more. I'm a fully signed-up member of the precariat.
• I have some envy towards immigrants in that they're in a good position. They have leverage between their home country and the UK. Even if they don't take advantage of it (and spend as much as they earn in the UK), it's there. I have no such leverage, and I have no country I can go to that will pay me 3 to 7 times the UK's minimum wage as their minimum wage. If that country existed, I'd be over there, just like EEs are in the UK. I'd be earning and saving for my property in the UK.
• the situation is so artificial - it's designed to create more and more greater fools. I resent being a part of it and will NOT be a part of it.

Ah no more....just thought it might be interesting to get some anecdotes on the psychological impact of delaying a fundamental decision for years and years because of an artificial constraint.

I really enjoyed reading this post. You have bottled a lot of my own frustrations and feelings of betrayal / anger / anguish.

I do not blame or resent a generation, they are our Parents and Grandparents and many of them are acutely aware of the great theft. I think we are well-versed in the reasons for our predicament and we should be venting at the Bank/Political alliance that has pushed us back to serfdom. Not Friends and Family.

Ironically, if I had never found this fecking site, I would have bought an incredible house on the River Avon in Bristol for £250,000 in 2011. I cannot even imagine what it is "worth" now. The whole situation was insane in 2008 when i found this site and I do not think anybody could have predicted that things would get as out of control and destructive as the current position.

Anyway, to keep ourselves sane, repeat after me..... LIAR LOANS. BUT THEY ONLY WANTED A HOME. JUST RENT IT OUT, INNIT!

Edited July 8, 2016 by Untoward

[Untoward]

You'll destroy yourself by focusing solely on the (many) negative aspects of all this. We're mostly powerless with respect to the political/economics decisions behind this, so what's the use of putting all your energy into railing against it?

You need to feel in control, so look at what freedoms your situation gives you compared to owning. You're much more flexible when new job opportunities come up. You're not saddled with debt. You presumably have some money so how can you put that to a good use that benefits you? Most importantly, once you get out of the mindset that you have to 'own' then it's quite freeing mentally. For example I'm thinking (at 48!) of packing in the job, travelling for a while, then coming back to retrain with a masters. All that is not only possible when you have the flexibility of renting, it's something you wouldn't even think of if you had a mortgage. One life - live it actively how you want to, not passively how you feel you're forced to.

But yeah, sometimes all you want to do is rail against the system. Nothing wrong with that, just don't let it run your life. You *are* in control, you can choose how you live it.

Bloody well said that Man.

[Democorruptcy]

I feel sorry for children.

High house prices just mean people have to work more hours to buy one. It's not a case of you get what you pay for, the house is the same, they all just cost more in terms of money and life sacrificed to buy it. When a single income could buy a house, it must have been a better life for children. They would see more of their parents and any second income would be by choice and disposable. Now the children are watching two stressed out slaves on a debt wheel, that in a lot of cases must lead to arguments about money. Then look at what's facing the children when they grow up! Houses of multiple occupancy and work until they drop with no retirement.

[Atma]

I too have waited for the madness to stop. I have a real sense that now at last it is slowing down. I hate debt which I had for years when I had a mortgage and it was a heavy burden. I looked at website today right move now loads of properties that look like I could live in them. I went to see mortgage man yesterday who was going on about the houses always sell and keep their price. I know from fact that is not true I have seen two recessions when they couldn't give them away. I got an email from him about not being downhearted about brexit. It's the only thing that gives me hope and they say it's all about sentiment and it must have dawned on f t b that it's not the best time to buy. I am one of your baby boomers and I am renting . I feel resentment too but towards the vested interests that have taken this country for a ride with the motive of greed. So often on this website they go on about older people and it's not helpful. I have worked all my life and what I live on is peanuts compared to a lot of younger people. It's also divisive blaming one section of the population. I read today in the times the housing section article where she is scathing of people who want discounts off properties. She called it a game that property owners have to endure... I know in my bones that properties will drop.

Fewer buy to let.. Loads of properties out of range for ordinary people.. Scare from Bretix. Doom in media. Debt is one of the worse nightmares to endure. Sleepless nights, panic attacks, no joy, mental health issues as a result and I have seen lots of that too. So I hope that you can sleep easy at night without worry about debt. Material things don't make you happy anyway , although housing is a basic need. Be patient as the winds are changing I know this.

[GreenDevil]

Nicely put rant.

The whole situation is one giant fek up.

I blame the bankers and this new paradigm of Zirp qe to infinity fek up.

You can't blame the boomers, though you may want to, blame the politicians and the bankers. They put us where we are today.

[Untoward]

Atma, thank you for posting. It is really good to get your input. You hit the nail on the head about debt and it's destructive side. Fortunately, I have been debt free for a decade and it is exactly the reason for holding back on a house purchase. It can put stress on relationships but my Wife is fantastic and although not an obsessive HPCer like myself, she understands the risks involved with a gigantic debt. In our fifth rental in 12 years.

[Scunnered]

The flipside is that when it pops those who thought it always went up, like some natural escalator or something, are going to be devastated bailed out with taxpayers' money.

Hope that helps!

[Patient London FTB]

Keep buggering on everyone. Buy-to-let implodes from now on.

[Agentimmo]

I've had two job offers in last 16 years to move from France back to UK. Southeast. Career wise...excellent. however, due to rampant HPI I refused both times. With hindsight, best decisions I ever made. HPI has destroyed the UK.

[billybong]

There's the years of ever increasing house prices resulting in effective impoverishment at most levels and generally for the benefit of politicians, builders, bankers, property developers etc and along with other VIs. Then there's the pension swindles for the benefit of the VIs and then there's the savings thievery for the benefit of - you guessed it.

To mention just a few things just to start with.

For sure Cameron et al will be making speeches demanding stuff like "kick out resentment" - that would be in addition to his recent call to "kick out hatred" - well he would wouldn't he.

Edited July 8, 2016 by billybong

[canbuywontbuy]

There's the years of ever increasing house prices resulting in effective impoverishment at most levels and generally for the benefit of politicians, builders, bankers, property developers etc and along with other VIs. Then there's the pension swindles for the benefit of the VIs and then there's the savings thievery for the benefit of - you guessed it.

To mention just a few things just to start with.

For sure Cameron et al will be making speeches demanding stuff like "kick out resentment" - that would be in addition to his recent call to "kick out hatred" - well he would wouldn't he.

This is it. Nothing stays the same. Nobody lives in a vacuum. We are all affected by everything. When savings rates are 0.5% for 8 years, people are affected. When house prices are unaffordable for 20 years, people are affected. We're not porcelain statues. Our minds are altered. Our habits change. How many of us go to DIY stores now? How many of us even think about DIY? What about aspiration? What about incentives to improve our lives via earning more money?

No wonder younger generations are just hunched over their phones now - even giving up on clubbing and pubs (in general) - too expensive, forget it. Even renting - forget it, stay at home with my parents. The government are inadvertently training us to be tight ba4tard poundshoppers.

Edited July 8, 2016 by canbuywontbuy

[Will!]

Ah no more....just thought it might be interesting to get some anecdotes on the psychological impact of delaying a fundamental decision for years and years because of an artificial constraint.

I've made a virtue of necessity and used the flexibility of renting to move around the country; this has given me greater breadth of experience than my peers. I'm at a point in my career where that advantage is about to become a disadvantage with regard to promotion (not staying in one place for years means that I'm 'not one of us') but my track record of being willing to relocate to further my professional education has helped to secure me a promotable job in Sydney! The housing situation in the UK also made me think about working long-term overseas much more seriously than would have been the case if I'd bought a house.

I've also had to rethink my ideas about retirement. I used to think that when I was 65 I'd move to somewhere with a Blue Flag beach in south Spain or Portugal and that would be that. I now realise I'll likely be working until I'm at least 70 and so I need to find a pattern of work that is sustainable.

Edited July 8, 2016 by Will!

[t1234]

Good thread, I have definitley benefited by not have the commitment of a mortgage which has let me take more risk both in going self employed and taking work overseas. However I long for a place that I can call my home, a base. My current plan is to buy my retirement place in France or Spain near the med and live/work out of there as much as I can because at least there you get some value for your money. In reality though I would buy in Greater London if I could get a house at any decent value. My work is in London and I am not willing to spend 4 hours a day travelling to work - I have tried it and its not for me. I have worked hard and earn by any standard a very good wage a top 1% apparently, after all this I can't seem to improve my lot - its very depressing so I don't dwell on it. If I had kids I would steer them away from this country.

[999house]

Driving around London in the sunshine was very difficult for me today. Its a beautiful city. But the reality of living in it is very different. Sensible rent suburb is an hour away from the centre. The customer service in local shops is dreadful. Everybody is miserable or doesn't give a fook. As the poster above said, Ive also worked hard, multiple degrees yet can't afford a sensible 1 bed flat.

Am moving to the continent this month. Hope and pray it turns out alright.

[999house]

This is it. Nothing stays the same. Nobody lives in a vacuum. We are all affected by everything. When savings rates are 0.5% for 8 years, people are affected. When house prices are unaffordable for 20 years, people are affected. We're not porcelain statues. Our minds are altered. Our habits change. How many of us go to DIY stores now? How many of us even think about DIY? What about aspiration? What about incentives to improve our lives via earning more money?

No wonder younger generations are just hunched over their phones now - even giving up on clubbing and pubs (in general) - too expensive, forget it. Even renting - forget it, stay at home with my parents. The government are inadvertently training us to be tight ba4tard poundshoppers.

Only have to look at Lidl and Aldi. Most people wouldn't be seen dead in those shops 10 years ago.

[Barnsey]

Only have to look at Lidl and Aldi. Most people wouldn't be seen dead in those shops 10 years ago.

Absolutely, the middle class have been brainwashed since 2008 into accepting much lower standards for everything, the shift from eating out to "dine in" deals, couponing/cashback, budget hotels and flights, Gumtree/eBay and so on.

A financial cleansing in a way since the devastation, and yet house prices have never been higher in many places, sacrificing everything else in life to pay a mortgage at record low mortgage rates. Even PCP is a lowering of expectations, some people have always bought new cars but now they'll never own them.

Edited July 9, 2016 by Barnsey

[200p]

It sounds like stockholm syndrome.

[Dorkins]

If I could buy a 3 bed semi in the town where I live (small town in SE England, equidistant between my work and my girlfriend's, neither of us work in London) for £150k it would give us so much freedom. Between our savings and our ability to live well below our means we could easily clear the mortgage in 3-4 years, we would have enough space for our growing family so we wouldn't need to think about upsizing in future. No hassle from landlords or estate agents, no need to be dual FTE wageslaves while our children are growing up, much less stress about job instability or even wanting to change jobs sometimes, financial spare capacity to save for the future etc etc.

But no, those 3 bed semis are £600k+, that door is not open. Why on earth would I ever vote Labour/Conservative/LibDem when all 3 of those parties were happy to slam that door shut in my generation's face for cynical electoral reasons?

Edited July 9, 2016 by Dorkins

[DrMartinSanchez]

Only have to look at Lidl and Aldi. Most people wouldn't be seen dead in those shops 10 years ago.

Lidl was so much better when it was for "poor people" only.

No problem finding a parking space, no waiting at the till.

But now everyone's become poor, it's crammed all the time