Jump to content
House Price Crash Forum
Sign in to follow this  
Fence

HPI - House Price Illusion

Recommended Posts

So I've been doing this building malarkey for a while now.  Specially the stone and lime stuff - have the burns and A&E visits to prove it.  So I can knock you up something quite cheap or something very cheap, or something dinner party expensive.  I'm also a bit of a prat.  I know I am because somebody regularly tells me that, including me, like that floorboard, screw, and heating pipe only last Thursday.

So forgive me if this is a pratish question but how can your house be worth quids to you, certainly more than what we build it for, including the green stuff we put it on.  See, I was thinking, if I had a bottle of water in a desert I could say it's worth a zillion pounds but I still have to drink it.  Like a house, unless you're a BTL nance, you still have to live in it.  Few actually downsize to any great extent so that leaves you carted out in a crate.  So it's not like a bar of the shiny or wodge of the queen's.  You can have that, but you don't need it, so it does have real quid value.

Not content with being a bit of a prat, I decide to go in feet first and start thinking of all those people, so the ONS smarties say, getting the vapours about their house value being their wealth, asset, retirement, blah blah.  I then contrast that thought with the bankers and co with their real bars and wodges and think this is a con.  There's a bunch thinking they're rich when they're not, living in an illusion created by those who are indeed rich thanks to it.

Then there's one of me girl friends (really just friend given me marital) who points out the affordability problem which only makes it worse.  High house prices which benefit no-one (except bankers, etc) particularly those who own them and those who want them.  Slowly, I start getting confused who's the prat.  But then I remember that floorboard.

Sure a house is worth a lot as a home to you, but in real money, nah.

Share this post


Link to post
Share on other sites
35 minutes ago, Fence said:

So forgive me if this is a pratish question but how can your house be worth quids to you, certainly more than what we build it for, including the green stuff we put it on.  See, I was thinking, if I had a bottle of water in a desert I could say it's worth a zillion pounds but I still have to drink it.

Land stays in the same place, can be divided into sections and it doesn’t deplete in size the more you’re on it.

We pay for the distribution and maintenance of water, nobody can own the rights to it. If water behaved the same way as land we would have legal rights to ownership over it, speculation in water (the more thirsty people are the more expensive it is, similar to the correlation between homelessness and high house prices / rent) water benefits (like housing benifits), and bank lending on it. This would all be seen as normal. 

Not enough people die for the land financialisation issue to be seen as a problem by the majority. Then again, state support makes that ambiguous to compare to a hypothetical situation in which water is treated financially like land and people where to get water benefits, therefore deaths from dehydration wouldn’t be as many either. Same for air.

Ideally of course, the adult world would be more equivalent to what school is (supposed to be) like, where kids that work harder get better grades.

That’s my view!

Share this post


Link to post
Share on other sites
20 hours ago, Arpeggio said:

Land stays in the same place, can be divided into sections and it doesn’t deplete in size the more you’re on it.

We pay for the distribution and maintenance of water, nobody can own the rights to it. If water behaved the same way as land we would have legal rights to ownership over it, speculation in water (the more thirsty people are the more expensive it is, similar to the correlation between homelessness and high house prices / rent) water benefits (like housing benifits), and bank lending on it. This would all be seen as normal. 

Not enough people die for the land financialisation issue to be seen as a problem by the majority. Then again, state support makes that ambiguous to compare to a hypothetical situation in which water is treated financially like land and people where to get water benefits, therefore deaths from dehydration wouldn’t be as many either. Same for air.

Ideally of course, the adult world would be more equivalent to what school is (supposed to be) like, where kids that work harder get better grades.

That’s my view!

OK got me there.  Had a lie down but, to be honest, none the wiser.  But you don't like people dying so that's good enough for me.  My point is I reckon you're only rich, quid wise, if you've got more stuff than you need.  You need a house so that don't make you rich.  But the guy that built you the house, sold you the mortgage, etc, well he's already got a house so you've made him rich.  Sure, when you die your kids, cat charity, or whatever may become rich but that's too late for you.  It's a con and you're risking being a prat if you get the vapours over rising prices.  Of course, you're not a prat if your a BTL, you're a nonce, but now I'm getting technical.

Edited by Fence

Share this post


Link to post
Share on other sites
20 minutes ago, Fence said:

OK got me there.  Had a lie down but, to be honest, none the wiser.  But you don't like people dying so that's good enough for me.  My point is I reckon you're only rich, quid wise, if you've got more stuff than you need.  You need a house so that don't make you rich.  But the guy that built you the house, sold you the mortgage, etc, well he's already got a house so you've made him rich.  Sure, when you die your kids, cat charity, or whatever may become rich but that's too late for you.  It's a con and you're risking being a prat if you get the vapours over rising prices.  Of course, you're not a prat if your a BTL, you're a nonce, but now I'm getting technical.

What I meant was that people would complain if water was financialized the same way that land is, but water can't be because it doesn't behave physically in the same way as land. My comparison comes from my assumption that land could be classed as necessary for life as other things are such as water, food and air.

That's probably what I should have said.

Share this post


Link to post
Share on other sites
11 minutes ago, Arpeggio said:

What I meant was that people would complain if water was financialized the same way that land is, but water can't be because it doesn't behave physically in the same way as land. My comparison comes from my assumption that land could be classed as necessary for life as other things are such as water, food and air.

That's probably what I should have said.

Tidy.  Ta.

Share this post


Link to post
Share on other sites

A bar of the shiny or wodge of the Queen's is no less illusory or price-erratic. Money is a slippery temptress and life's a work of imagination, after all.

Maybe best to follow Micawber's advice to young Copperfield:

"Annual income twenty pounds, annual expenditure nineteen pounds nineteen shillings and six pence, result happiness. Annual income twenty pounds, annual expenditure twenty pounds and six pence, result misery."

Share this post


Link to post
Share on other sites
14 hours ago, thehowler said:

Money is a slippery temptress and life's a work of imagination, after all.

Very nice bit of tatter there indeed.  Certainly on a par with that Dickie stuff.  Hope you don't mind me using it quite a bit in 2018.  Apart from the opportunity for a free pint down the pub, it would be a great line for the next punter who has a problem with my quote.  I could bung you the odd sheep if it works out.

To be honest, I don't think this little thread of mine is going anywhere and frankly it involves a lot of stress.  That Mr D over on the Deflation thread must have nerves of steel.  But until then I feel I must keep the rudder on an even keel, especially as I know how the loss of a rudder in Honduras can lead to a sunken boat.  But that's for another time.

Enough to say I think you're taking the moral view here which is good at this time of year.  Apparently I'm a non conformist which might explain why I cut the grass and share the odd cider but don't actually enter the Church.  But the pressure's always on at xmas.

My point lacks the morals, just that you can spend wodges and bars but not that house price.

 

Edited by Fence

Share this post


Link to post
Share on other sites
29 minutes ago, GinAndPlatonic said:

All edited very nicely though..as usual

Why thank you Ginny, if I may be so bold.  I do indeed like to keep a tidy workspace.  Not easy with these mobile keyboards and me builder's hands.  Down at the Burger King right now having a flexitarian day to celebrate getting the car back up the hill.  All quite an adventure.  Take care.

Share this post


Link to post
Share on other sites
On 11/12/2017 at 10:20 PM, Fence said:

So forgive me if this is a pratish question but how can your house be worth quids to you, certainly more than what we build it for, including the green stuff we put it on.

Because the seller can.

Its all about status and perception. If you are seen having a nice car, lots of holidays fancy clothes the perception of a higher status than you could normally afford is quite appealing. 

Its not necessarily how big your house is, but how much you "bought" it for or how much you sold it. Be seen spending lots on a house is perceived as higher wealth, when in fact its just normally higher debt.

Its been said before debt = Wealth. 

The stigma of debt is long gone and its expected to have 10's of thousands owed on credit (cards,car finance, etc) on top of a mortgage

Share this post


Link to post
Share on other sites

Also when people was allowed to MEW for any reason (Holiday, car, pay of debts, etc) they passed the extended mortgage on to the buyer, this helped create the debt bubble we see now

Share this post


Link to post
Share on other sites
1 hour ago, Monkey said:

Its all about status and perception

Exactly, an illusion.

And you still have to live somewhere. 

You could cut house prices in half tomorrow and it would make very little real difference except to FTBs.

But it would 'cause it's an illusion.

Edited by Fence

Share this post


Link to post
Share on other sites
On 12/13/2017 at 4:36 PM, Fence said:

You could cut house prices in half tomorrow and it would make very little real difference except to FTBs.

 

One letterism: MBS

Another word: Derivatives

Result: Total financial collapse.

Then: liberty.

Share this post


Link to post
Share on other sites
8 hours ago, Locke said:

ohDKCIOh.jpg

Then please correct me. 

We only pay for the maintenance and distribution of water. The only example I can think of is a controversial coveting of water for industrial use in one part of the world which is vehemently opposed.

I’m also aware that it’s illegal to collect rain water in certain parts of the US, yet the lobbyists still sell only the distribution and maintenance.

To me neither came close enough to the rights to water being commercially available in the same way as land.

Share this post


Link to post
Share on other sites
On ‎12‎/‎12‎/‎2017 at 7:56 PM, Fence said:

 But the guy that built you the house, sold you the mortgage, etc, well he's already got a house so you've made him rich.  

Nah the user got rich not the pusher. The UK public own 6 trillion in housing wealth. Btw the market cap of the chief domestic pusher...Lloyds (owns Halifax etc) has a market cap of 48 billion less than 1% of the value of the housing Ponzi. Actually owning a bank has been a one way losing position for the last 20 years. You've got to be a drug user not a dealer to get rich. I guess it serves those bloody bank shareholders right that they made  Guardian readers filthy rich on property.

Lloyds the mortgage  pusher lost 90% of its value since the mid nineties. Taylor Wimpey the biggest builder lost 70% of its value since 2007 Aunty Nellie made a million for the cat's home and did nicely thank you as her house quadrupled since 2000.  Wasn't the builders and bankers that made the money, it was the land under our feet.

 

https://www.theguardian.com/money/2017/nov/29/value-of-uks-housing-stock-soars-past-6tn

Edited by crashmonitor

Share this post


Link to post
Share on other sites
2 hours ago, crashmonitor said:

Nah the user got rich not the pusher. The UK public own 6 trillion in housing wealth. Btw the market cap of the chief domestic pusher...Lloyds (owns Halifax etc) has a market cap of 48 billion less than 1% of the value of the housing Ponzi. Actually owning a bank has been a one way losing position for the last 20 years. You've got to be a drug user not a dealer to get rich. I guess it serves those bloody bank shareholders right that they made  Guardian readers filthy rich on property.

Lloyds the mortgage  pusher lost 90% of its value since the mid nineties. Taylor Wimpey the biggest builder lost 70% of its value since 2007 Aunty Nellie made a million for the cat's home and did nicely thank you as her house quadrupled since 2000.  Wasn't the builders and bankers that made the money, it was the land under our feet.

 

https://www.theguardian.com/money/2017/nov/29/value-of-uks-housing-stock-soars-past-6tn

Sorry, don't work for me. 

Me point is it aint real if you can't have it, which you can't 'cause you've gotta live somewhere. 

And MEW is just more debt.  House might be the old collateral, so homeless if you **** up, but it's still just more debt. 

Kinda like what that bloke said on Question Time last night (see Persy thread).

And bankers extract the dosh from the banks via bonuses, etc.  Sure, the shareholders get shafted too but not the bankers, etc.

Never seen a rich drug user, least long term.  Not that'll ever let one on site.  Had one that was clean for many years and he was truly amazing, but once said how all his old mates were dead.

Each to their own.

Edited by Fence

Share this post


Link to post
Share on other sites
On ‎13‎/‎12‎/‎2017 at 3:29 PM, Monkey said:

Its been said before debt = wealth

 

our debt is their wealth....

Share this post


Link to post
Share on other sites
6 hours ago, Fence said:

Me point is it aint real if you can't have it, which you can't 'cause you've gotta live somewhere. 

And MEW is just more debt.  House might be the old collateral, so homeless if you **** up, but it's still just more debt.

The only kind of wealth where in order to access it you have to take on debt and pay interest on it. A rather expensive way of being wealthy, makes savings with interest below inflation look good.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 406 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.