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House Price Crash Forum

House Prices vs Salaries  

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  1. 1. When will the average UK house price return to less than 4x the single mean full time wage?

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On 04/05/2018 at 11:56, dropbear said:

The age of single wage multiples is over. Feminism  low interest rates/ cheap credit, high cost of living and materialism/stuff  brought women to the workplace, and their labour has been absorbed in to house prices. It’s a one-way ticket.

Single people with average income have no chance.

;)

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Nobody who does a full time job is being subsidised in my view, poor taste to look at it any other way. Just because many are paid a pittance doesn't make their work any less important. I suspect I'd be sacked from picking cabbages within the hour yet I'm probably paid 6+times what these people earn pro-rata. Those that are being subsidised are those who work a fraction of the time others do and yet get the state to top them up to the same level or higher than those who work full time. No real issue with those who don't wish to work full time, if you can afford to (and not have to rely on the state) then that is a lifestyle choice (one I wouldn't mind being able to do myself!). If you're gaming a broken system then I cant blame you either but at the same time you must accept the label of being carried by the rest of us.

 

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On 04/05/2018 at 11:56, dropbear said:

The age of single wage multiples is over. Feminism brought women to the workplace, and their labour has been absorbed in to house prices. It’s a one-way ticket.

Single people with average income have no chance.

And yet the dependency ratio is increasing and offsetting this..

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On 06/05/2018 at 00:06, dropbear said:

We’ve had around 3.8 million new immigrants since 1997 - the last time house prices were at 4x single income. It definitely puts upward pressure on prices.

 

73047FC8-E21F-4776-BAC2-317244194EF3.jpeg

Correlation is not causation.

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Trouble is ... house prices follow the trend and the trend is to calculate a multiple (4 or whatever) of two incomes.

However, that fails to take into account the fact that serious relationships aren't guaranteed (to exist or to work long term); it doesn't care about divorces, sickness, having children and even simply being too undesirable for the opposite sex. There's no guarantee that your wife/husband will manage to stay employed forever either.

So, in short, a large number of people are screwed - especially those who aren't....getting screwed.

I make good money, but I would struggle to buy a beautiful home in London by myself. With two incomes, though, it's .. a breeze. That's how things work and that's why 485k (what we're looking at right now) is suddenly acceptable. 

Feminism and its latest abortions (female quotas, positive discrimination etc) may have looked like a good idea, but they're a seriously rusty nail in the coffin of your hopes and dreams.

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15 hours ago, Si1 said:

Correlation is not causation.

Yes thanks for the observation. There must be millions of magic fairy beds in the sky above London, where these immigrants are living and most definitely not in Newham, Brent and Tower Hamlets.

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16 hours ago, Si1 said:

Correlation is not causation.

Indirect impact through demand for accomodation. The true impact is through fiscal policies since 1999, componded by QE (quantitative easing). Now we all wait for the impact from the unknown.

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1 hour ago, dropbear said:

Yes thanks for the observation. There must be millions of magic fairy beds in the sky above London, where these immigrants are living and most definitely not in Newham, Brent and Tower Hamlets.

You've just dug your little hole that bit deeper. 

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On 07/05/2018 at 16:24, Si1 said:

Correlation is not causation.

No it’s not but surely it can’t of helped ?

Bit like a reckless driver losing it on a roundabout with bald tyres and poorly set up suspension 

Not the ultimate cause of his/her downfall but certainly a contributing factor. I am renting in an area which I have known for over 40 years which is crowded, multi ethnic and more violent than I remember even 10 years ago. Without doubt volume of people - is a contributory factor to HPI in this area. Not totally causal but still causal alongside easy credit, QE etc 

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2 hours ago, GregBowman said:

No it’s not but surely it can’t of helped ?

Bit like a reckless driver losing it on a roundabout with bald tyres and poorly set up suspension 

Not the ultimate cause of his/her downfall but certainly a contributing factor. I am renting in an area which I have known for over 40 years which is crowded, multi ethnic and more violent than I remember even 10 years ago. Without doubt volume of people - is a contributory factor to HPI in this area. Not totally causal but still causal alongside easy credit, QE etc 

agreed

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I think the 80s saw the death of the first iteration of socialism, which was based upon a closed shop worker power mentality that could never survive the onslaught of globalisation. Now, I believe I am living through the waning of post-imperial globalist capitalism, but it won't die quickly.

As the cost of houses and higher education have spiralled, human behaviour has adapted to fit. The very people who you want to be having more kids (those with an intellect and a work ethic) seem to have fewer or leave it later in life. Their kids will inherit earlier and divide wealth between fewer of themselves, which simply perpetuates the existing inequalities. We have a culture of home ownership and landlordism, and the 3rd highest wealth inequality out of 55 leading countries, that cannot be reversed overnight.

Even if Labour win in 2022, they seem wedded to old ways of thinking and focused more on income than wealth inequality. They prefer to focus on social housing than the entirely legitimate aspiration of many younger working people to own.

A generation of ordinary people locked out of home ownership and into shit insecure rentals is politically abandoned in the wilderness. A chunk of them have bought into the debtslave mentality and taken on ruinous mortgages, so are now VI's on the side of "anything but a crash". The Tories are the party of them, and generation X and boomer aspiration, and appear willing to self destruct before they change.

I think we'll have a crash of sorts, as we always seem to eventually, but it won't deliver that 4x multiple, which would require 50% off. I can't see that happening. I think we'll see between 15% & 30% off the average.

If we ever do get back to the 4x multiple, it will require a clear out and a change of thinking in politics on both sides of the house, and only happen through drastic policy change, but that's a big if.

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56 minutes ago, disenfranchised said:

I think the 80s saw the death of the first iteration of socialism, which was based upon a closed shop worker power mentality that could never survive the onslaught of globalisation. Now, I believe I am living through the waning of post-imperial globalist capitalism, but it won't die quickly.

As the cost of houses and higher education have spiralled, human behaviour has adapted to fit. The very people who you want to be having more kids (those with an intellect and a work ethic) seem to have fewer or leave it later in life. Their kids will inherit earlier and divide wealth between fewer of themselves, which simply perpetuates the existing inequalities. We have a culture of home ownership and landlordism, and the 3rd highest wealth inequality out of 55 leading countries, that cannot be reversed overnight.

Even if Labour win in 2022, they seem wedded to old ways of thinking and focused more on income than wealth inequality. They prefer to focus on social housing than the entirely legitimate aspiration of many younger working people to own.

A generation of ordinary people locked out of home ownership and into shit insecure rentals is politically abandoned in the wilderness. A chunk of them have bought into the debtslave mentality and taken on ruinous mortgages, so are now VI's on the side of "anything but a crash". The Tories are the party of them, and generation X and boomer aspiration, and appear willing to self destruct before they change.

I think we'll have a crash of sorts, as we always seem to eventually, but it won't deliver that 4x multiple, which would require 50% off. I can't see that happening. I think we'll see between 15% & 30% off the average.

If we ever do get back to the 4x multiple, it will require a clear out and a change of thinking in politics on both sides of the house, and only happen through drastic policy change, but that's a big if.

I think we need a mix of capitalism and socialism. The human race evolved as tribes. Within the tribe there is social support and protection of itself and the weaker, youngest and oldest members. At the same time internally there is trade in goods and favours utilising both physical and social capital.

 

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1 hour ago, Si1 said:

I think we need a mix of capitalism and socialism. The human race evolved as tribes. Within the tribe there is social support and protection of itself and the weaker, youngest and oldest members. At the same time internally there is trade in goods and favours utilising both physical and social capital.

Yes we do, and we have it to an extent - but the balance has been tilted because New Labour were not socialists. Their policies mainly paid off the working class and poor with handouts to secure their vote, whilst making it worse for them in the long run as austerity has gradually squeezed - it was all rather like the Democrats do with the black community in the USA.

The balance now favours capital to the point where it's flight outside the tax system is tolerated, even joked about by the then Chancellor on TV (Osborne made a jest about dodging inheritance tax).

There isn't enough money or inclination to be sufficiently socialist to serve most of the people better (even though that inclination is building) without dealing with tax evasion and avoidance and the massive intergenerational inequality that has built up. 

Endeavour has to gain more power over capital, or we really are screwed and all bets are off.

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4 hours ago, Si1 said:

I think we need a mix of capitalism and socialism. The human race evolved as tribes. Within the tribe there is social support and protection of itself and the weaker, youngest and oldest members. At the same time internally there is trade in goods and favours utilising both physical and social capital.

 

oh FFS.

we have been living under a corporatist/socialist hybrid for the past 20 years at least. It is NOT the states job to micromanage everything from the luminescence of your lightbulbs to how many plastic bags you throw out.

 

 

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3 hours ago, disenfranchised said:

Yes we do, and we have it to an extent - but the balance has been tilted because New Labour were not socialists.

 

actually they were...very much so.Under blair you basically had oswald moseley.

Their belief is that the state rules the inividual.the individual is part of the collective.You can window dress it up as national socialist(blair),international socialist(corbyn)..but the underlying rule is the same.

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7 minutes ago, oracle said:

oh FFS.

we have been living under a corporatist/socialist hybrid for the past 20 years at least. It is NOT the states job to micromanage everything from the luminescence of your lightbulbs to how many plastic bags you throw out.

 

 

A mix of sh1t socialism and sh1t capitalism.

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1997 average house was £60k mortgages of 3x Main £18k plus 1x Second £6k = £60k

Now BoE happy with 15% of mortgages over 4.5x household income. At say £25k Main and £20k Second now that's £203k.

House prices have tripled because so has lending.

Apply 1997 rules 3 x £25k plus 1x £20k gives £95k so now the average house is now more than double.

Banks 1 People with Disposable Second Incomes 0

JIMJAMs= Joint Income Mortgages Just About Managing

 

 

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16 hours ago, Democorruptcy said:

1997 average house was £60k mortgages of 3x Main £18k plus 1x Second £6k = £60k

Now BoE happy with 15% of mortgages over 4.5x household income. At say £25k Main and £20k Second now that's £203k.

House prices have tripled because so has lending.

Apply 1997 rules 3 x £25k plus 1x £20k gives £95k so now the average house is now more than double.

Banks 1 People with Disposable Second Incomes 0

JIMJAMs= Joint Income Mortgages Just About Managing

3x1+1 was the lending practice of the time, rather than enforced by legislation though? 

The banks are the cause of this mess by abandoning that standard, light touch Labour & their BoE cronies allowed it to occur. 

New Labour is dead and the Blairites have no power, but the banks..?

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On 09/05/2018 at 19:07, Si1 said:

A mix of sh1t socialism and sh1t capitalism.

that's how they keep interest rates artificially low.

you need to look at regulation as a form of indirect taxation...it has a detrimental effect on all sectors of the economy.

you can't produce as much because of all the pointless form-filling, you can't consume as much because of all the pointless fines and jobsworths paid to enforce/collect of new laws.

 

just get out of the bloody way,and keep it simple(and PROPERLY ENFORCED)..no armies of accountants or lawyers arguing semanics of nuances in legalese.

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3 hours ago, Democorruptcy said:

I agree lower lending multiples were never forced legislation. We just had the FSA, BoE sitting on their hands while NR went as far as 125% mortgages.

NR dealing 125% mortgages is not a problem- so long as:

1) liabilities are all on the lender

2)said lender has a sufficient slush fund to deal with delinquency without handouts from anyone else(ie taxpayer)

 

free market takes it's course.....you want 125% loan, ok but it's wonga rates of interest to cover the risk.

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On 04/05/2018 at 11:56, dropbear said:

The age of single wage multiples is over. Feminism brought women to the workplace, and their labour has been absorbed in to house prices. It’s a one-way ticket.

Single people with average income have no chance.

It does show that there is something wrong with the system, after all women working has not made food more expensive.

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On 06/05/2018 at 00:06, dropbear said:

We’ve had around 3.8 million new immigrants since 1997 - the last time house prices were at 4x single income. It definitely puts upward pressure on prices.

 

73047FC8-E21F-4776-BAC2-317244194EF3.jpeg

I fail to see why this is so controversial, I bought a flat in 2001 and so I could move up the ladder I decided to rent out  rooms - all the lodgers were immigrants.  Without their money I would not have been able to move up the ladder at the inflated prices that were around in 2006.  Of course without their effect on the housing ladder I would have been able to move up the ladder without spending so much money so they did not help me really!

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