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Why Stagnation Is Crap For Recent Homeowners

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Ok, final post of the evening...

This is why stagnation is crap for recent homeowners.

Stagnation means that the value of your home neither drops or falls. It stays the same (in nominal terms anyway); yes?

Well, let's say you have just bought a one bed flat. From here on in prices don't crash; they stagnate. Good news? Not exactly.

Inflation carries on regardless and with inflation comes wage rises.

Why on earth in 5 years time will someone just like you buy a crumby one bed flat when (because of wage inflation) a 2 bed terrace will be JUST AS AFFORDABLE as a one bed flat today?

Buyers don't usually go for the cheapest, they go for what they can afford.

How many recent property owners have thought about this? How many BTLers own these types of flats?

Hmmmmnnnnn...... :blink:

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The reason is simple.

Because of Stagnation and nothing rising or falling the only way to go up the ladder is to earn more money.

Wage inflation of any magnitude is unlikely, the floodgates to our borders are open and there are plenty of hungry mouths to feed in this big wide world. Mouths that would happily toil night and day to put a bowl of rice into the stomachs of their children.

Stagnation in my view is a good thing, its what the market should be about. I dont understand why prices continue to either go up or down, it just does not make sense.

A house should be a home, and the only profit made should be the work effort in its construction.

Making money from thin air, is something this Government have been far to quick to capitalise on. Its all paper money anyway and unless you liquidate pre crash then you are no better off anyway as its all relative.

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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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