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Is Owning A Piece Of The Earths Crust The Best - Invest?

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Playing Devils advocate, in an attempt to understand the direction of the property market.

Could it be argued that the masses have less and less faith in bits of paper, (cash and shares that have no fundamental utility value)?

Afterall, owning a piece of the crowded Earths crust will always have a utility value to someone, be they lodger or horse rider.

Cash on the other hand could become worthless should the capitalist system suffer a global shock.

Japanese and Argentinian Banks vanished taking peoples savings with them. Chinas could be next.

A rational investor might consider these remarks worthless, but remember, MOST PEOPLE ARE'NT PROFESSIONAL INVESTORS.

Is land / real estate a 'must have' solid long - term bet given the publics notion of the 'tangibility' of land and bricks?

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As a generalisation, for many people you're probably right.

Which seems to hold true even though property has had it's busts.

Perhaps because, as you say, it at least is still there.

I still don't understand why though, although I have my opinions on why.

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people say that land is a good investment as they don't make it anymore. This is true, but land prices are just as much subject to bubbles as houseprices - in fact they are linked, so whilst land is a good investment, it is better to buy when the prices are low, not high, like at the moment.

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Playing Devils advocate, in an attempt to understand the direction of the property market.

Could it be argued that the masses have less and less faith in bits of paper, (cash and shares that have no fundamental utility value)?

Afterall, owning a piece of the crowded Earths crust will always have a utility value to someone, be they lodger or horse rider.

Cash on the other hand could become worthless should the capitalist system suffer a global shock.

Japanese and Argentinian Banks vanished taking peoples savings with them. Chinas could be next.

A rational investor might consider these remarks worthless, but remember, MOST PEOPLE ARE'NT PROFESSIONAL INVESTORS.

Is land / real estate a 'must have' solid long - term bet given the publics notion of the 'tangibility' of land and bricks?

This is a resonably average investment strategy. But it relied on selling to the greater fool.

Better to buy the panic lowws following capitulation, when you can percieve that all sellers are out the greatest risk* is that the trend will change and you may enjoy the longest rise.

*risk this is a positive risk not the peril of the dictionary. In this case the risk of not buying the panic low is more than to buy it.

Edited by sp1

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Playing Devils advocate, in an attempt to understand the direction of the property market.

Could it be argued that the masses have less and less faith in bits of paper, (cash and shares that have no fundamental utility value)?

Afterall, owning a piece of the crowded Earths crust will always have a utility value to someone, be they lodger or horse rider.

Cash on the other hand could become worthless should the capitalist system suffer a global shock.

Japanese and Argentinian Banks vanished taking peoples savings with them. Chinas could be next.

A rational investor might consider these remarks worthless, but remember, MOST PEOPLE ARE'NT PROFESSIONAL INVESTORS.

Is land / real estate a 'must have' solid long - term bet given the publics notion of the 'tangibility' of land and bricks?

Yes, I think this is true to an extent. It's probably easier to sell someone a conservatory for 15k than it is to sell them a website for their Business for £15k: it is more "tangible".

I do think however it's a "fashion". Property has been "in fashion" for a number of years and has done very well. But it wasn't "in fashion" in the early 90s, and I don't think it will be "fashionable" for much longer.

The money comes in, is moved around, the smart money gets out and goes elsewhere and the mugs who came in at the end (a sizeable percentage of them being - I reckon - BTL and off plan flat buyers) get shafted, it's kind of how it's meant to work.

The same short termist "IRs couldn't possibly hit 15%, that's just silly" (when it happened not so long ago) applies to property "It never goes down". It's like selective or automatic amnesia blocking out a car crash. We look at the growth of the property market in recent years and kind of assume it will just keep going, after all it never really goes down, does it. Even if it does, it'll go back up again, won't it.

For the long term - replacing your pension with property - you'd need to be guided by real property values, not notional, so performance of property vs inflation is important - correct me if I'm wrong but doesn't UK property only just outperform inflation over the long term?

I do think people see their property as their pension (or, a forced savings account), I do imagine that in the future, property will not be handed down through generations, rather, people will spend most of their lives paying for a property and then most of the end of their lives progressively selling it back to the Bank to extract cash from it, so they own nothing at the end. This appears to be getting going now.

On top of that, we'll have a new scandal as people complain that their IO mortgage "won't pay off the house"... "we were told if we went IO, then we could get a 2 bed flat instead of the ex-LA one bed one, and our wages would rise so we'd have no problem, so it's everyone elses fault, nothing to do with buying beyond our means"

I wonder about the wisdom of moving from something intangible like a pension to something like property. Who is to say that the value of property is tangible? There are plenty of homeowners near here convinced their property is worth X, with 3 or 4 EA boards outside, while one a few doors down changes hands at X - 50k and they still cling to the notion that their house is worth X no matter what.

I do also wonder what the state of the UK will be in 25 years. If it's full of mostly old people with manufacturing decimated and most of the skilled stuff being done more competitively abroad, house prices would be so much lower than they are now in real terms that it would be a fairly miserable existence.

The UK has enjoyed something of a position of power and prestige for many years, but I fail to see what we have which will keep us competitive and just why the UK should be "desirable" on the World stage as a place to live and work, apart from the language. I'm not saying the UK doesn't have things going for it, but I don't see precisely what we have that no other Country can or will match or surpass in the next couple of decades.

Nobody could project 25 years ahead but if I were, I wouldn't put my money in property in the UK for the long term. But then, as you say, given the recent performance of pensions, I can see why people don't want to bank on those either.

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Afterall, owning a piece of the crowded Earths crust will always have a utility value to someone, be they lodger or horse rider.

No-one in Britain _owns_ land: they just rent it from the government through the council tax... which is only going to go up, up and up for the forseeable future because it's by far the easiest thing to tax. You can't just pick up your land and move away where the government can't find you.

Edited by MarkG

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  • 301 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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