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Houses Are 5.7x Income. How Is This Being Sustained?

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We all know prices are excessive in proportion to income. Mr Average is buying his Average house for more money than lenders will allow for his Average salary. How is he doing this?

OK, its anecdotal, but I was thinking. Amongst the 7 people I know under 40 who have bought in London, 6 I know were able to do so using inherited money. In 2 cases they were able to buy outright with no mortgage. The effect of this is to totally distort the market principles of 3.5x income, etc.

Maybe the game has changed. Familes with equity at the top of the market can liquidate Grandmas house to allow reentry at the bottom of the market. This is sustainable among the owning class, but would keep everyone else renting forever.

I think inherited money is the elephant in the room of the HPC debate.

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Completely agree, we are basically waiting for ours before we can buy and are "terrified" one of them will have a stroke and need long term care otherwise we are completely snookered.

Please tell me that was ironic............

Edited by colonel faulkner

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Completely agree, we are basically waiting for ours before we can buy and are "terrified" one of them will have a stroke and need long term care otherwise we are completely snookered.

wouldn't you just finish them off before the medics arrived ? ;)

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Completely agree, we are basically waiting for ours before we can buy and are "terrified" one of them will have a stroke and need long term care otherwise we are completely snookered.

What remarkable honesty :unsure:

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So in general old people are dying with a lot more money, yet they can not afford their own care anymore.

It doesn't make sense.

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Completely agree, we are basically waiting for ours before we can buy and are "terrified" one of them will have a stroke and need long term care otherwise we are completely snookered.

This a cruel reality.

I believe in a minimal inheretance (max tax) policy and more social equality, but that 'aint gonna happen.

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Its not sustained just by inheritance - not everyone's parents have died in the past 5 years...!

Its cheaper to to buy most things now compared to 10 yrs ago

Fridge £300 then, £300 now (bear in mind inflation)

Computer £1500 then, £500 now

etc.....

5.7 x salary is more affordable now than in 1990 say.

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Completely agree, we are basically waiting for ours before we can buy and are "terrified" one of them will have a stroke and need long term care otherwise we are completely snookered.

It is a shame that it has come to this. It should not be this way it makes it a real lottery.

I only wish they were 5.7 times income, more like 8 to 10 times down here in the south!!!

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It is a shame that it has come to this. It should not be this way it makes it a real lottery.

I only wish they were 5.7 times income, more like 8 to 10 times down here in the south!!!

TBH though many a couple started out married life living with his/her parents and i'm sure plenty would still be happy to do so today, I personally would quite like a live in babysitter but these blooming parents want to be off having a life of their own :rolleyes: and enjoying themselves :o

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Doesn't go with people living longer though. I suspect most people come into inherited money at a point in their lives when they already own a home.

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TBH though many a couple started out married life living with his/her parents and i'm sure plenty would still be happy to do so today, I personally would quite like a live in babysitter but these blooming parents want to be off having a life of their own :rolleyes: and enjoying themselves :o

OMG! Are you for real. Talk about money being the root of all evil!

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Completely agree, we are basically waiting for ours before we can buy and are "terrified" one of them will have a stroke and need long term care otherwise we are completely snookered.

One always prefer crinklies to go out quick. A long, lingering, painful expensive death is not good for anyone. (Speaking from experience). Especially for the deceased-in -waiting. I know which I'd prefer when my time comes.

And long term planning and decision making based on inheritances is not an unreasonable proposition. I'm set to inherit nothing but I have a substantial sum to apportion amongst siblings and their offspring. It's really vexed me recently -i'm thinking oof leaving everything to my neices/nephes in trust-not that I woudl tell them.

Wouldn't want them making plans around my demise... :ph34r::ph34r::huh:

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If inheritance begins to drive the market, then what does the future hold if people plan to use their houses as their pensions?

I cannot point to any specific news articles, but I seem to remember some news stories not so long ago reporting that due to lack of faith in pensions people are banking on their house for money in the old age - therefore no money to pass down ...

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Inheritance is not a new phenomenon. People have been inheriting from their parents for .. well for ever really, so why would it suddenly propel the property market here ? The reason for inflated prices is very obvious -easy and cheap money i.e its mostly borrowed and it won't last much longer.

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This is a new paradigm dickensien rentier society theory.

If it comes to pass then house prices will remain at this level forever and only those who have rich parents will be able to afford property. A new class divide will appear and those who don't own property will forever be the slaves to those who do.

I personally think it's unlikely and go for the 'cheap credit' explanation myself.

But this type of theory really illustrates why those who predict there WONT be a crash are in fact the real 'doom mongers'.

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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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