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While the French people resist the global market, I'm wondering whether we have been too quick encourage it.

Its looks as if British manufacturing might vanish completely as a result of more firms moving production over to china in an effort to compete against strong competition. Its ok making dirt cheap products to fuel the retail economy but what happens when people simply can't spend anymore on credit.

Unemployment is creaping up hill and so is inflation and for the British manufacturer costs of production are getting higher each month.

NHS is basically bankrupt, pensions are in crisis and to live in this little island costs a small fortune.

As China and India grows they will use more fuel become more wealthy and maybe eventually we will be working 100 hours a week making cheap electronics for them.

Can we really compete with China and India and will their growth be our demise, and as a nation what the hell are we going to do about it.

Personally I think the French are right to fight change and try and protect what they stand for.

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NHS is basically bankrupt, pensions are in crisis and to live in this little island costs a small fortune.

this is what i was wondering too. why DOES it cost so much to live here ?

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i can see why someone would pay $400k for a californian beach apartment. or a city flat in paris. or a spanish villa etc.

but what drives a 24k pa lancastrian to pay £180k for an average 3 bed semi in preston ?

or a 35k londoner to shell out £245k for a 2 bed flat.?

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i can see why someone would pay $400k for a californian beach apartment. or a city flat in paris. or a spanish villa etc.

but what drives a 24k pa lancastrian to pay £180k for an average 3 bed semi in preston ?

or a 35k londoner to shell out £245k for a 2 bed flat.?

Is there a possible answer in your question? :unsure:

The fact that they live where they live, gives them good local knowledge.

Presumably they do some research into renting v. buying - weigh as many of the pros and cons that they can think of and then some decide to buy some decide to rent.

You think the ones that buy get the wrong answer.

Just sit back and watch what happens in the years to come, no need to rub their nose in it though. ;)

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they always have paid more than their predecessors...HPI is not a modern phenomenon...price of ave home where i live.....................

1930 £500........

1960 £4000..........8 fold increase

1990 £70000........17.5 fold increase

now £200000.......2.8 fold increase

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While the French people resist the global market, I'm wondering whether we have been too quick encourage it.

80% of the CAC40's profits are earned outside France, so you can make the case that the French are highly enthusiastic advocates of the global market. Also, witness Chirac shamelessly shilling for Dassault in Saudi Arabia.

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Its looks as if British manufacturing might vanish completely as a result of more firms moving production over to china in an effort to compete against strong competition. Its ok making dirt cheap products to fuel the retail economy but what happens when people simply can't spend anymore on credit.

We are losing our industry to the US and other European countries as well as China and India. We could still compete with the Far East if the will was there. The problem is that our ability to compete is being undermined by bad taxes, bad laws and bad public administration.

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this is what i was wondering too. why DOES it cost so much to live here ?

In a nutshell, because the vast majority can afford it. Life is a war of attrition, its never easy - it never was and it never will be.

The system works by the have's taking as much off the have nots as is possible, they let the 'have nots' keep just enough to stop them from getting revolutionary.

The game is to become a 'have' and not a 'have not' because once you've got 'nowt' its bloody hard to work your way back up from this position.

If your unhappy about your lot, what are you doing about it ? You won't change the system, so either learn to be happy with your lot, or get a move on !

Tough but true. Life ain't fair.

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We are losing our industry to the US and other European countries as well as China and India. We could still compete with the Far East if the will was there. The problem is that our ability to compete is being undermined by bad taxes, bad laws and bad public administration.

What industries is the UK losing to the USA? 50% of the US job creation in the last 5 years has been in construction, mortgage lending or other housing related industries, while most of the rest has been low paid service workers such as in healthcare. The average US job now pays $9k less than 5 years ago, over 5 years the wage rise barely keeps up with inflation. Their employment numbers are about the same as 5 years ago, unfortunately the population is bigger by about 10 million. The Americans are bitching about losing their manufacturing jobs too.

Developed countries CANNOT compete with China, India, etc on price. It's just not possible, the difference is too large. They can compete on quality, timeliness, legal issues (not stealing your IP), and skill.

Developed world manufacturers, in today's world, must sell goods that are of high quality and require a skillset that is not available elsewhere. Biotech, pharmaceuticals, nanotech etc - build them well and sell them for a good profit. Do things others cannot do, and do it efficiently.

The problem is, that requires constant innovation and change, since the other countries will catch up, and in shorter and shorter time frames. One may then call for protectionism - don't let them sell here! - but overall that's bad for economies.

What is needed is a level playing field in world trade. Companies should not be able to outsource abroad to avoid local labour or environmental laws. Have agreed and enforceable rules, and you've made it a little easier for the Westerner to have a decent wage, while protecting the poorer worker from toxic waste in their water (though they probably won't thank you for that). Western nations in return need to do things like stop subsidising agriculture in a way that kills the 3rd world.

Another problem with globalisation is that while overall profits are up, they are going to a very small number of people. International agreement is needed to tax the winners in all this to a) compensate in some way the losers, and B) pay for continued infrastructure development in all countries. Western countries need to keep their edge by investing in education for their workforces (not communications degrees, but training for things that will make us money through export), and creating business and research environments to encourage innovation and growth. Less public expenditure on 'Council Wellness Directors' and more on skilled tradesmen, engineers, and scientists.

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In a nutshell, because the vast majority can afford it. Life is a war of attrition, its never easy - it never was and it never will be.

You didn't really answer his question. You're wheeling out your tired old "get off your ass and do something" reply which might have some merit in it but which is not an appropriate reply in this case.

Whether you're a winner or loser, why does life in Britain appear to be such bad value for money given the overcrowding, crap weather, crap food, shoddy housing stock etc.?

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In a nutshell, because the vast majority can afford it. Life is a war of attrition, its never easy - it never was and it never will be
.

I lived in California for several years returning to the UK last July. House prices average around $230k in the US and earnings are about 50% higher with much lower taxes.

So why is the UK the most expensive house market in the world in relation to earnings and why do people continue to pay irrationally exhuberant prices?

Because they can borrow what they do not earn and hope that inflation in proces will eventually take care of it.

When they can't borrow enough or if interest rates rise the bust side of the boom follows.

1.2 Trillion pounds of personal debt suggests that we cannot afford what we spend.

Edited by Realistbear

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I lived in California for several years returning to the UK last July. House prices average around $230k in the US and earnings are about 50% higher with much lower taxes.

So why is the UK the most expensive house market in the world in relation to earnings and why do people continue to pay irrationally exhuberant prices?

Because they can borrow what they do not earn and hope that inflation in proces will eventually take care of it.

When they can't borrow enough of it interest rates rise the bust side of the boom follows.

1.2 Trillion pounds of personal debt suggests that we cannot afford what we spend.

OK - where in CA? I'm sitting here in Silicon Valley and you can buy NOTHING for $230k. An 800 sq ft, 2 bd, 1bth with a teeny garden starts at $600k. A 3bd/3bth near me is offered at $1.4 million. San Francisco, LA, and San Diego are worse. Realtor fees for purchase are usually 6%.

Average salary in the US may be about $50k, but median is about $27k - a few very rich people skew things up. Houseprices in bumfck Alabama cannot be compared to those in NYC or SF, you have to look at regional markets. And house prices are low in Alabama for a reason.

The lending situation here is identical to the UK - banks are giving money to anyone that can breathe. The nearest lender to me has a poster in the window '100% loans, 0% down: No asset verification, no income verificiation'. Liar loans again except it's worse because many illegal immigrants are getting these loans for $750k and can just walk when it gets bad.

Salaries are higher but this is an expensive place to live. I regularly travel to London, NYC, and Tokyo and prices here are comparable to those cities.

Federal taxes start at 28%, CA state taxes are basically 10%, social security 6.25%, sales tax at 8.25%, plus property taxes at 1.25% of purchase price every year (so even a starter home costs you $7500 per year). Write-offs are pretty much worthless these days as the AMT (Alternative Minimum Tax, brought in to prevent rich bastards dodging tax in the 70s but wasn't indexed to inflation) catches anyone on a middle class income.

Roads in CA are a piece of shit, potholes everywhere, and the schools are crap. Remember you also have to pay your medical insurance which if your lucky will run you a thousand a year, plus the same again in costs - unlucky and you either go without coverage or pay $5k to $10k. US as a country is going into debt in a way that makes Gordon Brown look like scrooge.

About the only difference between the CA situation and UK just now is the weather - no way is the grass that much greener here.

Edited by MadJock

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What industries is the UK losing to the USA?

We are losing pharmaceutical and fine chemical industries to the US, and particularly bio pharmaceutical manufacturing. The loss is insidious because it relates to new build decisions within established companies. Very few new drugs or chemicals are assigned to the UK and the construction of new pharmaceutical facilities here has almost come to a dead halt. Ireland and the US by contrast are very bouyant.

Developed countries CANNOT compete with China, India, etc on price. It's just not possible, the difference is too large. They can compete on quality, timeliness, legal issues (not stealing your IP), and skill.
Not true! The scope for improving manufacturing economics using things like process intensification make the labour cost issue pale into insignificance. There is also enormous scope for developing new products. The UK has had a historical advantage in R&D. Our position however is slipping fast. Over the last 10 years, our R&D spend has fallen disastrously. Added to this, Chemistry departments are shutting down all over the country (Sussex looks like being the latest victim). We could be world leaders in many aspects of manufacturing but this government has made it impossible to plan. Changes to legislation and tax have just become arbitary and vexacious. Edited by dog

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We are losing pharmaceutical and fine chemical industries to the US, and particularly bio pharmaceutical manufacturing. The loss is insidious because it relates to new build decisions within established companies. Very few new drugs or chemicals are assigned to the UK and the construction of new pharmaceutical facilities here has almost come to a dead halt. Ireland and the US by contrast are very bouyant.

Not true! The scope for improving manufacturing economics using things like process intensification make the labour cost issue pale into insignificance. There is also enormous scope for developing new products. The UK has had a historical advantage in R&D. Our position however is slipping fast. Over the last 10 years, our R&D spend has fallen disastrously. Added to this, Chemistry departments are shutting down all over the country (Sussex looks like being the latest victim). We could be world leaders in many aspects of manufacturing but this government has made it impossible to plan. Changes to legislation and tax have just become arbitary and vexacious.

Do you have any links for pharmaceuticals moving to the US? I'm very interested in expanding industries here (I live in CA).

I should have been more precise when I said the West can't compete on price. I meant 'price of labour', which I had hoped was clear from the remaining comments. I absolutely agree with you that improving the technology will allow a competitive price of a completed product, and that continued training and R&D are essential to this. Being better, not 'cheaper', is the only way for the West to stay ahead. I'm in engineering and despair of the US, UK and EU in their short sightedness (although the EU is improving, it's still not fast enough.)

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OK - where in CA? I'm sitting here in Silicon Valley and you can buy NOTHING for $230k. An 800 sq ft, 2 bd, 1bth with a teeny garden starts at $600k. A 3bd/3bth near me is offered at $1.4 million. San Francisco, LA, and San Diego are worse. Realtor fees for purchase are usually 6%.

Average salary in the US may be about $50k, but median is about $27k - a few very rich people skew things up. Houseprices in bumfck Alabama cannot be compared to those in NYC or SF, you have to look at regional markets. And house prices are low in Alabama for a reason.

The lending situation here is identical to the UK - banks are giving money to anyone that can breathe. The nearest lender to me has a poster in the window '100% loans, 0% down: No asset verification, no income verificiation'. Liar loans again except it's worse because many illegal immigrants are getting these loans for $750k and can just walk when it gets bad.

Salaries are higher but this is an expensive place to live. I regularly travel to London, NYC, and Tokyo and prices here are comparable to those cities.

Federal taxes start at 28%, CA state taxes are basically 10%, social security 6.25%, sales tax at 8.25%, plus property taxes at 1.25% of purchase price every year (so even a starter home costs you $7500 per year). Write-offs are pretty much worthless these days as the AMT (Alternative Minimum Tax, brought in to prevent rich bastards dodging tax in the 70s but wasn't indexed to inflation) catches anyone on a middle class income.

Roads in CA are a piece of shit, potholes everywhere, and the schools are crap. Remember you also have to pay your medical insurance which if your lucky will run you a thousand a year, plus the same again in costs - unlucky and you either go without coverage or pay $5k to $10k. US as a country is going into debt in a way that makes Gordon Brown look like scrooge.

About the only difference between the CA situation and UK just now is the weather - no way is the grass that much greener here.

Carlsbad, near San Diego. Medians on the coastal strip more in line with the UK at around $500k (but medians falling fast--see www.sandicor.com). Agreed about traffic and general deterioation in quality of life--that's why we left!

Taxes are much lower though--I was paying PT of $2700 p.a. on a 3 bed detached with Ocean view(bought for $248k in 1998--prop 13 kept them low) whereas in the UK my council taxes are 50% HIGHER for a smaller house in the country. Federal Tax very low as you can deduct mortgage interest and PT. Sales tax not a problme because I bought large items online and no state tax is payable (good 'ol eBay). We bought a new Honda Accord for $19k--about half what it costs in the UK etc etc.

People that bought into the CA market after 2000 will be in big trouble. Recent buyers who opaid $800k for a tract home may lose 300k in the correction. We were there in 1989 and watched it happen back then.

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Carlsbad, near San Diego. Medians on the coastal strip more in line with the UK at around $500k (but medians falling fast--see www.sandicor.com). Agreed about traffic and general deterioation in quality of life--that's why we left!

Taxes are much lower though--I was paying PT of $2700 p.a. on a 3 bed detached with Ocean view(bought for $248k in 1998--prop 13 kept them low) whereas in the UK my council taxes are 50% HIGHER for a smaller house in the country. Federal Tax very low as you can deduct mortgage interest and PT. Sales tax not a problme because I bought large items online and no state tax is payable (good 'ol eBay). We bought a new Honda Accord for $19k--about half what it costs in the UK etc etc.

People that bought into the CA market after 2000 will be in big trouble. Recent buyers who opaid $800k for a tract home may lose 300k in the correction. We were there in 1989 and watched it happen back then.

You may have just managed to dodge AMT - it's really not possible today, most of your deduction would be lost. Prop13 is an abomination that needs to die for CA to correct its budget defecit, but that won't happen until Armageddon since those that benefit most are also most likely to vote.

I've noticed a very different view of the USA by immigrants from the UK depending upon when they first arrived. The pre-1997 arrivals all love the salaries/taxes/standard of living/people etc and think it's far better than the UK. Post-1997, view the system much more like your average Brit views things in the UK - taxes too high, priced out of the market, running faster just to stand still. We just don't see a big difference between the two. Plus they've been completely bonkers here for 5 years and are only just now waking up to the fact.

Prices are indeed dropping - Realtor Scum are now comparing to 2004 rather than 2005 since YoY apprecitation went negative in many places. I even just saw an ad for the National Association of Realtors that had one guy say 'I couldn't use the name Realtor ® until I had completed ethics training.' I haven't laughed that much in a while.

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You may have just managed to dodge AMT - it's really not possible today, most of your deduction would be lost. Prop13 is an abomination that needs to die for CA to correct its budget defecit, but that won't happen until Armageddon since those that benefit most are also most likely to vote.

I've noticed a very different view of the USA by immigrants from the UK depending upon when they first arrived. The pre-1997 arrivals all love the salaries/taxes/standard of living/people etc and think it's far better than the UK. Post-1997, view the system much more like your average Brit views things in the UK - taxes too high, priced out of the market, running faster just to stand still. We just don't see a big difference between the two. Plus they've been completely bonkers here for 5 years and are only just now waking up to the fact.

Prices are indeed dropping - Realtor Scum are now comparing to 2004 rather than 2005 since YoY apprecitation went negative in many places. I even just saw an ad for the National Association of Realtors that had one guy say 'I couldn't use the name Realtor ® until I had completed ethics training.' I haven't laughed that much in a while.

I agree with you. Had we not bought in 1998 (2 years after the recovery in 1996) we would have been priced out completely. Interest Only mortgages have driven the CA market for 5 years (Dataquick say 80% of loans in 2005 were non-fixed rate "creative" type loans) and all those cheap loans will be coming home to roost this year and next. And with IR double what they were 5 years ago a lot of people are going to be selling on a falling market. The UK is in a very similar position and shared the 1989-96 experience.

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Whether you're a winner or loser, why does life in Britain appear to be such bad value for money given the overcrowding, crap weather, crap food, shoddy housing stock etc.?

I don't think it does appear to be such bad value - its all relative, and if it was so bad, then millions wouldn't be trying to flock here.

Some older middle class white folks appear to be off to their ghettos in Spain, but I think thats more to do living the dream in the sunshine than anything else.

Housing stock as a whole seems much better than 30 years ago.

Overcrowding - completely agree, immigration should be stopped NOW.

Crap weather - it is warming up though, global warming and all that !

Crap food - blame Macdonalds and all those horrible kebab shops, curry houses etc - these things have not enriched our culture in my opinion.

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I agree with you. Had we not bought in 1998 (2 years after the recovery in 1996) we would have been priced out completely. Interest Only mortgages have driven the CA market for 5 years (Dataquick say 80% of loans in 2005 were non-fixed rate "creative" type loans) and all those cheap loans will be coming home to roost this year and next. And with IR double what they were 5 years ago a lot of people are going to be selling on a falling market. The UK is in a very similar position and shared the 1989-96 experience.

Yep, 80% is what I'm seeing, have a look at this LA Times article

http://*******.com/fl5oj

But First Federal has taken to them like few others. Of all the home loans that Washington Mutual held at the end of 2005, 52% were option ARMs, the company said in its annual report to the Securities and Exchange Commission. Golden West and Downey said more than 90% of their loans were option ARMs. At First Federal, 100% of residential mortgages were option ARMs.

For those of you not familiar with option ARMS, they allow options to pay capital plus interest, interest only, or to lump the interest each month onto the capital - negative amortisation.

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Crap weather - it is warming up though, global warming and all that !

Them what know what they're talking about use "climate change", not global warming.

If the polar ice melts and the warm water from the equator stops circulating north, the UK is going to get a great deal colder, not warmer.

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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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