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Demographics, Demographics, Demographics

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Demographic trends point to tax increases in 2010

Demographics in the UK have been favourable for property over the past 25 years. This is about to change

(dramatically).

So far so good:

That is to say the percentage of those in retirement relative to those in the population of working age has been static at around 25%.

And now for something completely different:

Starting in five years' time, as the post war baby boomers start to retire, the dependency ratio will rise dramatically to over 40%.

Old people:

(a ) Require less living space.

(b ) Are a net drain on the tax system

(c ) Are less productive

This adds up to a big reduction in demand for living space (and more sheltered accomodation), less disposable income (due to higher taxes) and lower average incomes (due to fewer people in full time employment). These trends also suggest that landlords may have to settle for much lower rents.

The current record house prices may survive for another year or two but they simply cannot survive a 15% rise in the dependency ratio.

In the long term house prices are dead!

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I would tend to agree with this in principle, in the sense that an ageing population will tend to have different housing requirements in the long run.

However, I don't think in practice you will see an obvious change - it will be very slow and may well be counterbalanced by the fact that all political parties, bar one, fully support massive open door immigration policies. They see that as the answer to the tax problem (short sighted baffoons IMHO).

It may be that all those thousands of yuppie flats that are being built at the moment for young people in town centres, actually eventually turn into 'ideal retirement complexes'

I think that house prices will stagnate in the short term and then due to demographics drift downwards in real terms over the longer term over 25 years. Personally, I don't see investing in a house as a 'pension' - BTL is fine as a business, where you are investing for the long term in many properties because at the end of the day the guy renting is buying your assets for you. It should be treated as a business just like any other business.

Still can't see where or when you will get your HPC - unless of course you measure it over 25 years, in which case I don't class it as a HPC, but there again you bears must be getting desperate by now and probably would call it a crash ! :lol:

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Demographics is a non - starter.

Immigration both legal and undocumented will see to that. Also immigrant communities tend to have more children.

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But many retirees will want to downsize and release equity to fund their retirement. They will be selling larger properties and competing for smaller ones with would-be FTBs, and of course they will be cash buyers. They might also invest some of their equity in BTLs to provide an income (bearing in mind that many people retiring now have 20 to 30 years of retirement to look forward to). As they will be cash buyers they will squeeze would-be FTBs even harder.

In some respects this is an appalling scenario. The lower end of the housing market will be put under enormous pressure while prices of bigger houses will fall, as very few people will be able to buy them. This could get very messy indeed with a huge rise in inter-generational tension.

Also with respect to pensions this move by Christine Farnish of the NAPF to allow exployers to reduce the pension liabilities they've already contracted into is indicative. If this does go through in some form or another employers will cut benefits for future retirees drastically, and eventually will start going after those who've already retired. As matters stand this looks like it's only a matter of time. And at some point the govt will have to act on public sector pensions. Veyr noticeable that one of the car components firms announcing closure/job losses recently said that a deal they put to the union including cuts in pension liabilities was rejected. Sooner or later workers may have to negotiate reduced benefits to keep their firms going, all of which will put mpore and more pressure on retirement incomes, and for many a consequent need to downsize.

This looks more and more like a desperate race to the bottom.

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Old people:

(a ) Require less living space.

(b ) Are a net drain on the tax system

(c ) Are less productive

This adds up to a big reduction in demand for living space (and more sheltered accomodation), less disposable income (due to higher taxes) and lower average incomes (due to fewer people in full time employment). These trends also suggest that landlords may have to settle for much lower rents.

The current record house prices may survive for another year or two but they simply cannot survive a 15% rise in the dependency ratio.

In the long term house prices are dead!

These old people will require services and products which will need people to sell and carry out. If the vast majority of the population is over 50 and sat on its **** retired then someone will have to do the work.

More sheltered accomadation, more rest homes and nursing homes, more hospitals and medical staff.

If people in the UK aren't having babies themselves (or those that aren't aren't working population) then new people need to come in to do these jobs. As there will be more people in the country the rents etc will stay up.

HOWEVER ... I don't think an aging population will be financially viable to the same extent so the jobs will have to be very poorly paid and there'll be no money for benefits for the chavs and chavettes who might get forced into working looking after old people.

Is there any country in the world already with a vast proportion of old people?

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The graphic here shows the clear effect of immigration, in the 1980's Ireland would have shown up much like eastern europe.

http://en.wikipedia.org/wiki/Demographics_of_Europe

Here are the projections for some populations to 2050, compare the US, UK & Poland

United States-> 1955-2050 http://www.census.gov/cgi-bin/ipc/idbpyrs....&out=d&ymax=250

UK -> http://www.census.gov/cgi-bin/ipc/idbpyrs....&out=d&ymax=250

Poland -> http://www.census.gov/cgi-bin/ipc/idbpyrs....&out=d&ymax=250

Germany -> http://www.census.gov/cgi-bin/ipc/idbpyrs....&out=d&ymax=250

Japan -> http://www.census.gov/cgi-bin/ipc/idbpyrs....&out=d&ymax=250

China -> http://www.census.gov/cgi-bin/ipc/idbpyrs....&out=d&ymax=250

India -> http://www.census.gov/cgi-bin/ipc/idbpyrs....&out=d&ymax=250

Ireland -> http://www.census.gov/cgi-bin/ipc/idbpyrs....&out=d&ymax=250

Russia is actually experiencing a decline

Life ebbs away from Russian villages

http://news.bbc.co.uk/1/hi/world/europe/3984951.stm

Russia's population falling fast

http://news.bbc.co.uk/1/hi/world/europe/4125072.stm

Demographics of Russia

http://en.wikipedia.org/wiki/Demographics_of_Russia

No Easy Answers Around the World to Population Decline

http://www.worldpress.org/Europe/1979.cfm

Population statistics from Japan

http://www.stat.go.jp/English/data/handbook/c02cont.htm

corrected link

Edited by Green Bear

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for years i have been telling people how the demographics are against europe and this country. but no one sees it. their hatreed for the usa is so strong that they think it is finished. but they are so wrong, it has an increasing population and that spells increasing economic success. not here in europe.

and to those who say that the immigrents will increase our numbers they are wrong. most come from europe and they will go home. they are not here to stay, just for the cash. and from the third world, they are a burdeon on the state and if truth be know contribute little or nothing.

when the baby boomers hit retirement, hold on to your hats becasue what the havent taken aslready they will.

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and to those who say that the immigrents will increase our numbers they are wrong. most come from europe and they will go home. they are not here to stay, just for the cash. and from the third world, they are a burdeon on the state and if truth be know contribute little or nothing.

The EU-25 is demographically doomed, it doesn't matter if we shift Czechs or Slovenians over to the UK, all we do is the exacerbate the decline in their native lands, it's rather like shuffling deckchairs on the Titanic.

In many countries the future trends are going to make matters worse, as we see in the UK, we now take delight and pride in denying our young people basic requirements such as decent housing, despite the all too apparent abundance of land, materials and labour, we ignore all this and blame them for buying £120 iPod's. We load them up with debt right from the start, and that's before you get on to loading them up with other peoples' pension and entitlement liabilities. Even small houses require joint-incomes to support the mortgage and low inflation means the debt will linger on for years, none of the above are conducive to counter current demographic trends.

The only answer is to import population and allow countries like Turkey into the EU, this is inevitable, if you need a workforce of fresh faced 18 year olds in 2030 and they weren't born in 2012 there's nothing you can do about that, the banks can print money out of thin air, you can't do that with people.

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They do to encourage breeders quickly. Mass immigration from anywhere - how likely is that now after the "shock" Labour got at the last election? We've had it a lot already and i reckon that secretly NL must realise it hasn't really helped them that much. Other than a few extra voters.

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"We load them up with debt from the start"

I see the pending collapse of many of Britain's up-start universities. I see the University "thing" coming off in a big way with world interest rates rising: No ability to borrow = no students = no university.

Throw in the realisations on the (lack of) value of a degree now, plus the debt disadvantage from the student's viewpoint and the "cant tell the difference" problem from an employer's viewport, and it's only a matter of time.

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They do to encourage breeders quickly. Mass immigration from anywhere - how likely is that now after the "shock" Labour got at the last election? We've had it a lot already and i reckon that secretly NL must realise it hasn't really helped them that much. Other than a few extra voters.

A quick few extra voters in a country (England) where NL lost the popular vote is a very good thing, the migration flows have only just started and will run at these levels for a number of decades, this is the only way we can fund the entitlements the boomers have promised themselves. Whether a young immigrant population will happily slave away for poor wages whilst paying high taxes to fund a bunch of asset and entitlement rich old white people is another matter. However if you look at the public sector for example the government have promised unfunded riches to the unions so we'll have to find out whether it's sustainable or not, this is a cultural issue that comes second to economic concerns.

As for the malcontented white underclass, hrm, well they'll have to be persuaded to set aside their fears, the most effective way is for government to threaten them with benefit withdraw, use the stick and carrot approach.

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If there are no death duties, no inheritence taxes, and far more boomers than their children, then we might see the emergence of a new timid landed gentry: couples who have each inherited a couple of properties from their parents. I wonder if having three or four freehold properties will cause people to push back and enjoy an easier lifestyle, to have fewer children so as not to have to spread the inheritence too thinly over the next generation?

Not everyone will use their assets as collateral to borrow to start a business; many will be happy to suckle off the cashflow all their adult life. Can having a couple of properties and being moderately well-off actually blunt one's hunger to push life to its limits and strive for bigger and better things? Or does it depend more on the psychological profile of the individual?

Your thoughts?

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Huh ??

I thought the world was steadily being overrun by human beings and the global population in 50 years was going to be 100 billion trillion gazillion ?! :D

So too many people is suppsed to be bad ..... and now too few people is supposed to be bad ..... what's the solution ??

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The way UK laws are going it will soon be the case that if a Man stands next to a Woman in a supermarket queue he will be obliged not only to hand over his home, his car and all his savings to her but also then have to hand his wage packet over to her for the rest of his Life.

Ironic that the gender that is most keen on marriage, and often desires more than anything else to be married, is bringing about a series of circumstances where they are driving away Men.

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I thought the world was steadily being overrun by human beings and the global population in 50 years was going to be 100 billion trillion gazillion ?! :D

So too many people is suppsed to be bad ..... and now too few people is supposed to be bad ..... what's the solution ??

Many parts of the world are undergoing a massive population boom, but that doesn't include Europe or the former USSR which face demographic decline, if you look at Russia itself it's already happening, look to Eastern Europe and Italy next. It will affect the US and even China after that as their one child policy catches up with them (the '4-2-1' problem). The solution is to import the excess of young people from the booming parts of the world to an aging Europe, it's the only way the latter can maintain their welfare states and unsustainable dependency ratios once the boomers retire. The only other option is to settle for less, and if you look at our unions or the whimsical protesters in France for example, you know that's just not going to happen.

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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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