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canbuywontbuy

What If We're In The Same Situation In 2020?

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Seriously - what if the world limps along in the same dysfunctional state for the coming years? Prop after prop is used to stave off a crash. A mini-crash staves off a meaningful crash. The mini-crash (20% house price drops) will be heralded as the "big crash" before prices recover back to their crazy norms. The UK might have a $4Trn national debt by 2020, but it's OK, because of more and more artifices that make it OK. House prices remain extortionate, but rising modestly in price (yet still higher than wage increases).Essentially, what we have is a perpetually maintained dystopia. We will continue to live in this bizarre charade of a healthy economy - where everything is borrowed from the future, because if it wasn't, we'd have an almighty crash in seconds.

When do you give in and buy, or emigrate or whatever?

Personally, I am emigrating this summer (Thailand, I've lived there before, know what to expect) - but would buy in the UK if there was a genuine crash (50% plus off prices). Sadly, I don't see it happening. I really do see the above as reality. I see that everything is essentially maintained as it is and that the government will do ANYTHING to maintain the status quo in one shape or another.

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Seriously - what if the world limps along in the same dysfunctional state for the coming years? Prop after prop is used to stave off a crash. A mini-crash staves off a meaningful crash. The mini-crash (20% house price drops) will be heralded as the "big crash" before prices recover back to their crazy norms. The UK might have a $4Trn national debt by 2020, but it's OK, because of more and more artifices that make it OK. House prices remain extortionate, but rising modestly in price (yet still higher than wage increases).Essentially, what we have is a perpetually maintained dystopia. We will continue to live in this bizarre charade of a healthy economy - where everything is borrowed from the future, because if it wasn't, we'd have an almighty crash in seconds.

When do you give in and buy, or emigrate or whatever?

Personally, I am emigrating this summer (Thailand, I've lived there before, know what to expect) - but would buy in the UK if there was a genuine crash (50% plus off prices). Sadly, I don't see it happening. I really do see the above as reality. I see that everything is essentially maintained as it is and that the government will do ANYTHING to maintain the status quo in one shape or another.

Good luck with your move to Thailand. I won't be far behind you with emigration to the southern EU in summer next year. Having reached FI this week I could go now but it sort of snuck up on me with Brexit et al and I'd already made plans including a new AST and some projects I want to finish even though they are taking their toll.

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Good luck with your move to Thailand. I won't be far behind you with emigration to the southern EU in summer next year. Having reached FI this week I could go now but it sort of snuck up on me with Brexit et al and I'd already made plans including a new AST and some projects I want to finish even though they are taking their toll.

Well done. You really have done well and I'll be interested to hear of your updates. I know you've accrued enough money to probably retire in the UK itself! :D

Well - onto the UK and the future. I worry about the UK in that successive governments have trashed the economy for short-term gain over and over and over. I don't ever see that changing. I don't see Theresa May saying "I'm going to have to give everyone genuine pain for 3 to 5 years while we re-grow the economy from the ground up" - no politician can ever say that, yet that's what we need. We need to scrap so many benefits, be super-strict on immigration AND the lazy indigenous.... and genuinely get back to surplus, pay off chunks of the national debt so our interest repayments (currently circa £1.4Bn a week) can be lowered while we are in the ZIRP world. Not to get on a rant again, but I don't want to be on this messageboard in even 1 years' time and everything is essentially the same (including my circumstances). If the UK won't change, I will.

Edited by canbuywontbuy

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Well done. You really have done well and I'll be interested to hear of your updates. I know you've accrued enough money to probably retire in the UK itself! :D

Well - onto the UK and the future. I worry about the UK in that successive governments have trashed the economy for short-term gain over and over and over. I don't ever see that changing. I don't see Theresa May saying "I'm going to have to give everyone genuine pain for 3 to 5 years while we re-grow the economy from the ground up" - no politician can ever say that, yet that's what we need. We need to scrap so many benefits, be super-strict on immigration AND the lazy indigenous.... and genuinely get back to surplus, pay off chunks of the national debt so our interest repayments (currently circa £1.4Bn a week) can be lowered while we are in the ZIRP world. Not to get on a rant again, but I don't want to be on this messageboard in even 1 years' time and everything is essentially the same (including my circumstances). If the UK won't change, I will.

I'm starting to lose interest in it all TBH. My world is about to change and I'm very happy not to have to worry about it. It would have been so easy to discourage all the moral hazard and even to sort peoples fears that caused Brexit yet our leaders were just weak and arrogant. It's such a shame to watch this great country disappear but it's soon not going to be my problem. I'll save my energies for my newly adopted home.

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I'm starting to lose interest in it all TBH. My world is about to change and I'm very happy not to have to worry about it. It would have been so easy to discourage all the moral hazard and even to sort peoples fears that caused Brexit yet our leaders were just weak and arrogant. It's such a shame to watch this great country disappear but it's soon not going to be my problem. I'll save my energies for my newly adopted home.

Well, you and me both. I'm sick to the back teeth with it all. I've repeated myself so many times, including how much I love the UK in many ways, but the economic quagmire I've seen over the last 10 years plus has pushed me "over the edge" in terms of where to live in the future.

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Well, you and me both. I'm sick to the back teeth with it all. I've repeated myself so many times, including how much I love the UK in many ways, but the economic quagmire I've seen over the last 10 years plus has pushed me "over the edge" in terms of where to live in the future.

We're both very fortunate to have options though and for that I am thankful. I feel sorry for those who are priced out and stuck whether through their own fault or otherwise. It doesn't look very rosy for them going forwards. The ladder is going to just be continually pulled up and it's likely they'll "die at their zero hours contract job" but I'm sure GDP will be great.

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The ladder is going to just be continually pulled up and it's likely they'll "die at their zero hours contract job" but I'm sure GDP will be great.

Yeah, that's how it's been reported by the media over the last 10 years already. GDP / not being in recession are the two key (meaningless) metrics. Deficit and national debt are sidenotes. Over the last 10 years, I've seen ONE SINGLE ARTICLE (this one: http://www.telegraph.co.uk/finance/economics/10849333/Interest-bill-on-UKs-1.27-trillion-debt-to-hit-1bn-a-week.html ) - on how much the UK actually pays in interest on its national debt. It was written in May 2014 and the media seem not to care about this at all. The £350M a week on the EU was a big deal, but paying circa 5 times that on interest (on zero return back to the UK, including not paying a penny down on the national debt pile) per week is an irrelevancy to the politicians, the media, and even the public. The fundamentals are rotten to the core.

Edited by canbuywontbuy

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How much of that debt interest is in fact pensions?

That is to say, the debt interest is paid on gilts, which are the underlying assets that back annuities. Thus, pension payments are part of the interest paid on government debt. The question is, how big a part?

Edited by porca misèria

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How much of that debt interest is in fact pensions?

That is to say, the debt interest is paid on gilts, which are the underlying assets that back annuities. Thus, pension payments are part of the interest paid on government debt. The question is, how big a part?

Do you mean pension liabilities? (sorry if I'm misunderstanding...). My understanding is the national debt is an aggregate of months and months of structural debt (deficict) - it's REAL debt. Pension liabilities are an extra to the national debt. From here:-

http://www.nationaldebtclock.co.uk/

...factoring in all liabilities including state and public sector pensions, the real national debt is closer to £4.8 trillion, some £78,000 for every person in the UK.

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If the current situation pertains another 4 years then I can cope, and rather see it as an investment buying opportunity. I am in a nice 3 bed house at competitive affordable rent, in a pleasant job with a sensible commute and hours, in god's county, and would put down more pension savings while qe continues to support my landlord in his rather low yield investment.

Of course it all rather depends on what you're saying will remain the same.

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This has got me thinking about my strategy. I'e been saving up a deposit for the past 5 years or so, declining to buy in 2011 and feeling increasingly anxious about what to do next. I was planning to buy this summer but like a lot of people i'm sitting things out for a bit.

One thing I worry is how long a crash might take. Going on historical data, eg the 80s, peak to trough looks like on average 7 or 8 years to bottom out. Even if a 50% crash happens in the UK, the chances of this taking less than 5 years seem pretty slim, and it's a pretty grim realisation that I might have to rent for another 5 years to time the market right.

And just for arguments sake, it takes 8 years to bottom out. If after 5 years, prices are still heading downwards, will you still buy, given that the bottom might be 3 years away and it would cost you 1000s?

There are plenty of countries with higher household debt, and higher HPI than the UK, so if there is going to be a HPC my fear is that there will be a slow global unwinding rather than a sudden brexit inspired crash?

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5 years at 12000 pa rent is 60,0000. Depending on where you're located and what rent you're paying, are you likely to see a 60,000 drop in HP. Do thou want to rent for 5 years. I suspect the answer is no to both (unless perhaps you are looking to buy big house in london\se). I would start looking and try to grab a house at a discount, while there is fear of hpc.

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5 years at 12000 pa rent is 60,0000. Depending on where you're located and what rent you're paying, are you likely to see a 60,000 drop in HP. Do thou want to rent for 5 years. I suspect the answer is no to both (unless perhaps you are looking to buy big house in london\se). I would start looking and try to grab a house at a discount, while there is fear of hpc.

You're not actually very good at maths are you.

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5 years at 12000 pa rent is 60,0000. Depending on where you're located and what rent you're paying, are you likely to see a 60,000 drop in HP. Do thou want to rent for 5 years. I suspect the answer is no to both (unless perhaps you are looking to buy big house in london\se). I would start looking and try to grab a house at a discount, while there is fear of hpc.

60k DEBT is roughly 120k real money over life of mortgage.

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60k DEBT is roughly 120k real money over life of mortgage.

You're clearly dealing with Albert Einstein here, not worth making a fool of yourself ;)

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Same in 5 years?

Thatll be another 20% of GDP debt on the national debt.

Things cannot continue as they are.

That'll be 15 years of low growth and fck finances to cover 's Browns 5 years of vote-for-me!

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60k DEBT is roughly 120k real money over life of mortgage.

Yep, people seem to forget this. The same as they forget the stamp duty and all of the maintenance costs, as well as everything spend on decorating!

That rent ain't looking like dead money now!

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5 years at 12000 pa rent is 60,0000. Depending on where you're located and what rent you're paying, are you likely to see a 60,000 drop in HP. Do thou want to rent for 5 years. I suspect the answer is no to both (unless perhaps you are looking to buy big house in london\se). I would start looking and try to grab a house at a discount, while there is fear of hpc.

Cat got your tongue?

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Same in 5 years?

Thatll be another 20% of GDP debt on the national debt.

Things cannot continue as they are.

That'll be 15 years of low growth and fck finances to cover 's Browns 5 years of vote-for-me!

I could well see things carrying on as they are. No way would I have thought that we would have 7 solid years of ZIRP, with now the BoE looking to slash the base rate rather than increase it. Mass immigration will be a thing for at least another 4 or 5 years. This is a managed decline into a zombie state - certainly there'll be no protests from the younger generations (goodness knows how they're being brainwashed, maybe by Zuckerburg's inane grin?).

Edited by canbuywontbuy

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Same in 5 years?

Thatll be another 20% of GDP debt on the national debt.

Things cannot continue as they are.

That'll be 15 years of low growth and fck finances to cover 's Browns 5 years of vote-for-me!

I hope you are right but change is very difficult, even if we had geniuses in charge of us, which I doubt.

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ONS: Budget deficit for 2016/17 set to be much higher than forecast.

Britain’s budget deficit is on course to be much higher this year than the government hoped, despite an unexpectedly large fall in public borrowing last month, official figures show.

The Office for National Statistics said public borrowing in June stood at £7.8bn, compared with £10bn in the same month last year and the £9.5bn predicted by the City.

Although the smallest June deficit for nine years allowed the new chancellor, Philip Hammond, to say the economy was in good shape to cope with the aftermath of the Brexit vote, the ONS figures show that deficit reduction in the first three months of the 2016-17 financial year was slower than forecast in George Osborne’s March budget.

Osborne envisaged borrowing being cut by around a quarter in the current year. But during the first three months of the financial year, slow growth in tax receipts meant there was an improvement of just over 8%.

The ONS said public sector net borrowing – the government’s preferred measure of the size of the budget deficit – stood at £25.6bn in April to June 2016, compared to £27.9bn in the same months in 2015. Assuming a similar performance for the year as a whole, the deficit would total almost £70bn, rather than the £55bn forecast by the Office for Budget Responsibility.

https://www.theguardian.com/business/2016/jul/21/budget-deficit-set-to-be-much-bigger-than-hoped-ons-figures-show?CMP=twt_gu

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