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ronnie

Housing As A Store Of Value

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have people(over last few decades) started to see property as their principal store of value rather than just somewhere to live? and if enough people are prepared to see house prices at such high levels isnt it a self fufilling cycle where unless theres a major economic downturn or massive increase in supply prices will stay high for long periods and they will accept low low rental yields as "a house is more than a place to live"

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have people(over last few decades) started to see property as their principal store of value rather than just somewhere to live? and if enough people are prepared to see house prices at such high levels isnt it a self fufilling cycle where unless theres a major economic downturn or massive increase in supply prices will stay high for long periods and they will accept low low rental yields as "a house is more than a place to live"

Unfortunately I think a lot of them have depleted the storeroom with MEW and now want the remaining goods to go up to cover whats gone.

A loaf of bread costs anything between 50p and 2 quid for the really fancy stuff. If all of the retailers of bread entered into an inflationary spiral and started more until it went up to 4 quid for a basic loaf, some people would still buy it, but at the low end of the economic spectrum people (people on salaries and wage, people with kids) would probably start looking for something else to eat, just to make ends meet. There is only one alternative. Rent.

I also suggest this principle extends to gas. People are likely to go back to wearing jumpers inside, and those that don't will have the gas cut off, and probably cry a lot and feel sorry for themselves before they realise that this won't ensure their survival. Its going to be a brave new world of back to the future.

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I'm sure many people view housing as a kind of enforced savings account. It's great that you can buy an essential asset, use it, live in it, and then when you sell it *generally* it's worth more than you paid for it over a long term.

However I don't see why prices twenty years on from now would be higher in real terms than they are now. If we go by history then they should be. But the World has changed so much, and is changing so fast, I wonder if in twenty years and in real terms property *in the UK* will be worth significantly less than now, perhaps, half. Time will tell...

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I think anything in the now almost global economy that ties you to one location is a massive hinderance.

Anything that makes you less mobile is bad, anything that makes you less adaptive to change is bad, anything that requires predictability beyond five or ten years is bad.

Get used to it.

The only thing that grows unabated is the pace of modern life, you have to work harder, faster, longer and smarter than those before you and those around you.

Advances mean more oportunities, that is all.

During the next economic cycle those who will succeed in the eyes of other will be those with the knowledge and means to seize such oportunities as and when they arise. This requires liquidity, mobility and understanding. Three things anyone would do well to protect.

The greater public may well find themselves in negative equity slave to the bank, whilst a new class of young well informed savers, exclusively seize all the oportunities forbid from them by their mortgages. There may well be an equity class divide in this country.

I can almost see a time when I get sick of hearing "It's not fair. I give my money to the bank and they give it to you, and you gamble with it, what makes you better than me?"

I will reply "I tried to warn you, don't you remember?"

And once again the banking cycle has sorted the financially illiterate from the financially astute.

The bank can then charge the financially illiterate mortgage repayments, and lend the money to the financially astute.

In times of tight credit it takes a certain level of understanding & proof to secure a loan.

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Unfortunately I think a lot of them have depleted the storeroom with MEW and now want the remaining goods to go up to cover whats gone.

A loaf of bread costs anything between 50p and 2 quid for the really fancy stuff. If all of the retailers of bread entered into an inflationary spiral and started more until it went up to 4 quid for a basic loaf, some people would still buy it, but at the low end of the economic spectrum people (people on salaries and wage, people with kids) would probably start looking for something else to eat, just to make ends meet. There is only one alternative. Rent.

I also suggest this principle extends to gas. People are likely to go back to wearing jumpers inside, and those that don't will have the gas cut off, and probably cry a lot and feel sorry for themselves before they realise that this won't ensure their survival. Its going to be a brave new world of back to the future.

I haven't looked recently, but I thought it was possible to buy a loaf of "economy" bread for about 20p or so. And I have eaten Aldi's cheaper bread, and thought it quite edible.

As I sit here, I have a hot water bottle inside my sweater. Quite warm and it can't cost that much to boil a kettle.

Billy Shears

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I haven't looked recently, but I thought it was possible to buy a loaf of "economy" bread for about 20p or so. And I have eaten Aldi's cheaper bread, and thought it quite edible.

As I sit here, I have a hot water bottle inside my sweater. Quite warm and it can't cost that much to boil a kettle.

Billy Shears

If you look at the nutritional content of that loaf, and compare it to a £1 loaf of wholegrain bread, you will see why it is 20p. :rolleyes:

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I think anything in the now almost global economy that ties you to one location is a massive hinderance.

Anything that makes you less mobile is bad, anything that makes you less adaptive to change is bad, anything that requires predictability beyond five or ten years is bad.

Get used to it.

The only thing that grows unabated is the pace of modern life, you have to work harder, faster, longer and smarter than those before you and those around you.

Advances mean more oportunities, that is all.

During the next economic cycle those who will succeed in the eyes of other will be those with the knowledge and means to seize such oportunities as and when they arise. This requires liquidity, mobility and understanding. Three things anyone would do well to protect.

Some nice ideas here. I liked the first half of the post a lot. Paradigm shift! (but not in a good way for fixed asset holders).

The greater public may well find themselves in negative equity slave to the bank, whilst a new class of young well informed savers, exclusively seize all the oportunities forbid from them by their mortgages. There may well be an equity class divide in this country.

I can almost see a time when I get sick of hearing "It's not fair. I give my money to the bank and they give it to you, and you gamble with it, what makes you better than me?"

I will reply "I tried to warn you, don't you remember?"

And once again the banking cycle has sorted the financially illiterate from the financially astute.

The bank can then charge the financially illiterate mortgage repayments, and lend the money to the financially astute.

In times of tight credit it takes a certain level of understanding & proof to secure a loan.

Second half: Isn't this the wrong way round? The homeowner gets together a load of their own money and a load of money borrowed from the bank. They put it all on a dud which is then a ball and chain preventing them from moving jobs or seeking other investment opportunities.

frugalista

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Guest Winners and Losers

I haven't looked recently, but I thought it was possible to buy a loaf of "economy" bread for about 20p or so. And I have eaten Aldi's cheaper bread, and thought it quite edible.

As I sit here, I have a hot water bottle inside my sweater. Quite warm and it can't cost that much to boil a kettle.

Billy Shears

I'm going to cry. I did turn the heating off early tonight though and put my dressing gown on - thinking about that big British Gas bill coming..

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I think anything in the now almost global economy that ties you to one location is a massive hinderance.

Anything that makes you less mobile is bad, anything that makes you less adaptive to change is bad, anything that requires predictability beyond five or ten years is bad.

Get used to it.

The only thing that grows unabated is the pace of modern life, you have to work harder, faster, longer and smarter than those before you and those around you.

Advances mean more oportunities, that is all.

During the next economic cycle those who will succeed in the eyes of other will be those with the knowledge and means to seize such oportunities as and when they arise. This requires liquidity, mobility and understanding. Three things anyone would do well to protect.

Some nice ideas here. I liked the first half of the post a lot. Paradigm shift! (but not in a good way for fixed asset holders).

The greater public may well find themselves in negative equity slave to the bank, whilst a new class of young well informed savers, exclusively seize all the oportunities forbid from them by their mortgages. There may well be an equity class divide in this country.

I can almost see a time when I get sick of hearing "It's not fair. I give my money to the bank and they give it to you, and you gamble with it, what makes you better than me?"

I will reply "I tried to warn you, don't you remember?"

And once again the banking cycle has sorted the financially illiterate from the financially astute.

The bank can then charge the financially illiterate mortgage repayments, and lend the money to the financially astute.

In times of tight credit it takes a certain level of understanding & proof to secure a loan.

Second half: Isn't this the wrong way round? The homeowner gets together a load of their own money and a load of money borrowed from the bank. They put it all on a dud which is then a ball and chain preventing them from moving jobs or seeking other investment opportunities.

frugalista

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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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