Strategies For The Average Joe

[pamaris]

Hi,

I am a US citizen. DH is British. We moved to the US in 2002 and will soon be moving back to the UK with our 2 kids. Our family ties are in Manchester, and we are open to moving wherever DH can find a decent job in Northern England. We will have no assets but also no debt. We will not think about buying a home for at least 2 years. I am trying to make sense of the housing situation in the UK, and make a plan accordingly.

My MIL bought her 3BR semi in 1975 for £8500! Adjusted for inflation, that is equivalent to about £44000 in today's currency. To me, that sounds like a reasonable price for a home. For some reason, though, the housing economy in the UK is just not reasonable.

I am just wondering what a reasonable strategy would be for our family. DH will get about £32k per year. I suppose we will just rent for a few years, and purchase when all the people with IO mortgages get their homes repossessed and can no longer keep up with the payments? Do you guys expect the crash to create reasonable prices in accordance with average wages?

Any thoughtful advice is appreciated. I am not optimistic about inflation, wages and housing in the UK, but I am even less optimistic about the state of the US economy.

Thank you.

[oracle]

Hi,

I am a US citizen. DH is British. We moved to the US in 2002 and will soon be moving back to the UK with our 2 kids. Our family ties are in Manchester, and we are open to moving wherever DH can find a decent job in Northern England. We will have no assets but also no debt. We will not think about buying a home for at least 2 years. I am trying to make sense of the housing situation in the UK, and make a plan accordingly.

My MIL bought her 3BR semi in 1975 for £8500! Adjusted for inflation, that is equivalent to about £44000 in today's currency. To me, that sounds like a reasonable price for a home. For some reason, though, the housing economy in the UK is just not reasonable.

I am just wondering what a reasonable strategy would be for our family. DH will get about £32k per year. I suppose we will just rent for a few years, and purchase when all the people with IO mortgages get their homes repossessed and can no longer keep up with the payments? Do you guys expect the crash to create reasonable prices in accordance with average wages?

Any thoughtful advice is appreciated. I am not optimistic about inflation, wages and housing in the UK, but I am even less optimistic about the state of the US economy.

Thank you.

inflation will not be a problem,IR's will.

the best thing you can do is sit tight and keep your job while the rest of the numpties run around like headless chickens.

average wages are WELL below what the official stats are...they are probably more like 20k.p.a....but these are likely to be squeezed with more immigrants entering the country.

just hope you have a job which is reasonably immune from cheap labour.

[pamaris]

inflation will not be a problem,IR's will.

the best thing you can do is sit tight and keep your job while the rest of the numpties run around like headless chickens.

average wages are WELL below what the official stats are...they are probably more like 20k.p.a....but these are likely to be squeezed with more immigrants entering the country.

just hope you have a job which is reasonably immune from cheap labour.

Well, Dh is an interior designer for an architecture firm. So, the "cheap labor" in his sector is at the lower level, in construction, where structures are fitted out and built, but not really at the level he is in the process. It is highly doubtful that an immigrant from Eastern Europe is going to have the qualifications to compete with him, even if said immigrant was willing to work for cheap.

[oracle]

Well, Dh is an interior designer for an architecture firm. So, the "cheap labor" in his sector is at the lower level, in construction, where structures are fitted out and built, but not really at the level he is in the process. It is highly doubtful that an immigrant from Eastern Europe is going to have the qualifications to compete with him, even if said immigrant was willing to work for cheap.

given that construction will be going tit's up shortly surely they will be in competition from all the newbuild architects....that in itself will be a downward pressure on wages....the trick of re-vamping stores has been pulled already here.

[pamaris]

given that construction will be going tit's up shortly surely they will be in competition from all the newbuild architects....that in itself will be a downward pressure on wages....the trick of re-vamping stores has been pulled already here.

Not sure I agree with that. Retail shops must reinvent themselves again and again, because they are not selling tangible products; they are selling an intangible brand. As long as consumers are willing to pay for such nonsense, stores will be revamped again and again. An immigrant from Bulgaria is not going to be in touch with the consumer audience in a way that will effectively promote the brand. In this way, DH is protected from cheap labor. Also, an uneducated labouror is not going to have the technical, software or engineering knowledge required to compete in his particular niche.

Dh has also worked on hospitals, petrol stations, council tax offices, hotels, corporate offices, casinos and flats. There is always something to be built. It is not just retail. At this point, an immigrant labouror may be able to hammer in the nails, but I don't think they are skilled enough to lay out construction drawings.

However, if you are right, there is not much we can do is there.

Edited September 6, 2006 by pamaris

[CrashDive]

inflation will not be a problem,

Don't agree.

IR's will.

Do agree.