The Real Cost Of Hpi

[enworb]

Good point. My sister and boyfriend have a massive mortgage, about £180K and it is knocking their ability to have kids and they can't afford to get married.

Myself and girlfriend on the other hand, getting married and will have kids shortly after. We don't have the massive mortgage hanging around our necks and wouldn't chain ourselves to one as it would effect the ability to get on with life.

It's a form of financial survival of the fittest, it's a good thing as in the future only those renting now will have kids and so future generations will grow up believing it is better to rent than pay overpriced house prices

I thought it cost less than £50 to get married in a registry office

As for only renters having kids, I doubt that. How many will inherit houses (or money from the sale) and so be able to afford to buy a place....and have children. I'm not sure what percentage of properties are occupied by owner occupiers, but a significant amount are owned outright, ie no mortgage.

Perhaps your sister is thinking furter ahead than your give her credit for.

[Nickolarge]

Yep, guess the punters/'marks' have never been taken into consideration. Things don't change. During WW2, black marketeers made vast fortunes out of making folks pay dearly - or do without - the little luxuries... like more than one egg per week or a pot of jam.

I guess their excuse is that they were only providing for their own, too.

Rationing was another government con. During the war we produced enough food to carry on as normal. To make matters worse they kept the rationing going for years after the war ended. Never believe a politician if the vote in a new power and claim they won't use it 'except for in an emergency'.

Edited May 19, 2007 by Nickolarge

[nick22abdn]

I'm new to this site but thought I's bring up some fundamentals that people on here seem to be missing.

Firstly, on the out and out attacks on BTL's they may or may not be aware that property is one of the major investment mechanisms in the UK and the world as a whole. No one on here seems to mind that we live in a capitalist, consumer society as we all have access to technology such as computers etc. Many also seem obsessed with the ability to enjoy life and go out for meals. In a capitalist society people are free to invest their own money however they see fit, no one seems to be overly concerned that the majority of commercial property is owned by investment houses and pension funds that will be providing for you in your retirement. Without such investments in property and stocks we would not be able to afford these luxuries.

People seem to be out of touch with reality - in the modern day, instant gratification society we live in people seem to expect ot be able to buy their own house, go on foreign holdiays, watch sky tv through plasma tv's, have a couple of cars etc whilst just working from 9-5 during the week!! About 70 years ago only 10% of the population were OO's and worked much longer hours in much harsher conditions in order to put food on their families table and possilby go on holdiay once a year to the next county. Does this self obsessed, lazy society really expect to be handed everything - if you want something work for it, dont complain about those who have got off their arses.

Addressing those who feel a crash would be a great thing. Middle aged people who have owned property for years really wouldnt be at all affected by this - the level of equity they have is hugely larger than could be wiped out in a crash. It would in fact be those FTB's who have little or no equity that would lose their properties - the very people you claim to be supporting.

Evidently the majority of user on here have a very basic if non existant knowledge of economics. If there were to be a crash of the proportions hoped for, the entire economy would cruble and crash as well. Those middle class homeowners would unlikely be less affected as the reason they are able to afford property prices is that they are well educated and in well paid jobs. In times of recession, these people with higher levels of human capital would be least affected by job losses and would be able to find new ones quickly. Those in less educated, less skilled jobs would be the hardest hit and would find their savings wiped out as they struggled to pay for basic essentials. The majority of the people on here seem to be in their thirties and stil cant afford a house - eveidently not the highest earners around or they would have bought years ago. As such they will actually be the hardest hit if prices fall (house prices are not isolated from the job market, exchange rate, or the economy as a whole as people seem to believe)

Prices are still affordable - I am 23 + bought my first flat a little over two years ago. However, I had to do something alien to people - compromise. I moved into a dump, lived without hot water for two months and worked two jobs. I now have a nice flat and due to price increases in Aberdeen over 50% equity (having started with a 100% mortgage). I may not have been able to afford foreign holidays of £100 a weekend in clubs but got my first place - the art of working for something you want. In fact, I have just bought a much larger property, being upgraded with luxury fittings which is substantially nicer than any rental on the market aside from top end properties in London. You may find renting cheaper but you have one life to live - you really want to spend it living in a shithole over which you have no control just to save yourself a couple of hundred a month?!!

Sorry for this rant but the idiocy of some people on here is unbelievable, strangely not many of the posts seem to be from those who are well educated and in high quality jobs - this in itself is quite telling. You may well be able to buy a property if the market crashes but basic econoics tels us that markets always move in cycles and you would probably be the most likely candidates for losing your property in the crash after that.

P.S. Before someone attempts to discredit this I will just point out that I have Master in Property + Economics and will soon start a PHD in Property, in addition to having a couple of BTL's and a property development company. This site appears to merely echo a financially inferior group of peoples opinions and crying of sour grapes against those who have actually done something and succeded with their lives!! If you want a property - work harder

[salamander]

Sorry for this rant but the idiocy of some people on here is unbelievable...

... I will just point out that I have Master in Property + Economics and will soon start a PHD in Property, in addition to having a couple of BTL's and a property development company.

I personally find the arrogance of some people on here unbelievable

[b0rk]

I'm new to this site but thought I's bring up some fundamentals that people on here seem to be missing.

Firstly, on the out and out attacks on BTL's they may or may not be aware that property is one of the major investment mechanisms in the UK and the world as a whole.

In a capitalist society people are free to invest their own money however they see fit, no one seems to be overly concerned that the majority of commercial property is owned by investment houses and pension funds that will be providing for you in your retirement.

Commercial property companies such as Land Securities or Hammerson are driven by yield not capital value growth which as you should know makes residential and commercial quite different markets. Comparing professional yield driven investment to appreciation driven gambling investment is like asking daddy or chips.

Addressing those who feel a crash would be a great thing. Middle aged people who have owned property for years really wouldnt be at all affected by this - the level of equity they have is hugely larger than could be wiped out in a crash. It would in fact be those FTB's who have little or no equity that would lose their properties - the very people you claim to be supporting.

True, but don't forget the amateur property investors who have used their equity as finance on amassing property portfolios.

If there were to be a crash of the proportions hoped for, the entire economy would cruble and crash as well.

Doesn't mean it won't happen particularly if house price stagnation/deflation was coupled to an overall slowdown in consumer spending. So much of the economy is indirectly fed by consumer spending that it wouldn't just be isolated to the high street.

Those middle class homeowners would unlikely be less affected as the reason they are able to afford property prices is that they are well educated and in well paid jobs. In times of recession, these people with higher levels of human capital would be least affected by job losses and would be able to find new ones quickly.

Okay, nice in theory but usually wrong in practice in a recession companies will typically look at re-evaluating overall staffing levels.

One obvious area for reduction is middle and senior management as they are cost heavy but value low. Why is this well if you look at what much of the middle tier of any company does then you will find it is focused on managing the lower tiers to generate value. This done by using the skills and knowledge held by the middle tiers to shape/guide/direct/mentor/manage whilst they themselves will actually create very little value. Should a company reduce the lower ranking staff then it naturally needs less middle management. Alternatively as workload drops during a downturn companies may feel more comfortable with increasing the number staff reporting to each remaining manager by eliminating some managers.

Management consultants have invented a name for these processes "downsizing", "rightsizing" and "delayering".

If you want a property - work harder

Do you have any idea just how arrogant that sounds.?

[Bearfacts]

Evidently the majority of user on here have a very basic if non existant knowledge of economics.

You may well be able to buy a property if the market crashes but basic econoics tels us that markets always move in cycles and you would probably be the most likely candidates for losing your property in the crash after that.

P.S. Before someone attempts to discredit this I will just point out that I have Master in Property + Economics and will soon start a PHD in Property, in addition to having a couple of BTL's and a property development company. This site appears to merely echo a financially inferior group of peoples opinions and crying of sour grapes against those who have actually done something and succeded with their lives!! If you want a property - work harder

Dear god I didnt know it was possible to combine arrogance and stupidity so well, are you a product of Eton by any chance ?!

Here you are boasting about your paper qualifications and refering to the rest of the users on this site as idiots , people about whom you know nothing but simply judge to be intellectually inferior because we don't happen to agree with your view point.

You say you bought your property about two years ago and then presumably your 'investment' properties ? You also say that markets move in cycles - well spotted - so where exactly do you think we are in the housing market cycle ? The Uk housing market has always moved in cycles of boom and bust usually lasting about 16-18 years from peak to peak. We are now in about year 17 since the last peak and you think buying now or in the last two years was the sign of intelligence !!!! IF you bothered to look at basic things like av price to av earnings ratios you would have realised that we are completely off the scale and due a large correction at any moment.

You may have a piece of paper to prove you can pass exams but you clearly have no common sense or more importantly experience. I lived through the last crash and at teh time owned a flat in West London. Unlike you I have seen it all before and there is no substitute for experience.

Incidentally I also have paper qualifications - yes a degree. I think your rant comes from a deep seated fear of the mistakes you have made in investing in property so late in the cycle.

P.S re the teacher of 21 who ownes properties - I am recounting a colleagues comments - my recollection may not be 100% accurate - she obviously is a little older than 21. Even us teachers have to pass qualifications !

Edited May 20, 2007 by Bearfacts

[Casual Observer]

and will soon start a PHD in Property,

Is this the epitome of Mickey Mouse degrees?

A PhD in property, ffs!

How long's the course? 3 hours?

[edwardbear]

Was it possible to do PhDs in property at the peak of the last bubble?

Possibly a sign that the bubble has reached enormous proportions, even by historical bubble standards?

[Guest X-QUORK]

Regarding nick22abdn's first post...

AWOOGA!

Come on guys, don't feed the trolls.

[mrhappy]

I find the fact that someone who has just finished studying a masters (which would take you upto 22 or 23 with a year out) has managed to buy properties and BTL's whilst not working (or working part time) thats a sign of worrying lending, either that or ******** one of the two

[Guest X-QUORK]

I find the fact that someone who has just finished studying a masters (which would take you upto 22 or 23 with a year out) has managed to buy properties and BTL's whilst not working (or working part time) thats a sign of worrying lending, either that or ******** one of the two

A wise man once said:

"If it looks like bullsh*t, and smells like bullsh*t, it probably is bullsh*t."

[19 year mortgage 8itch]

Is this the epitome of Mickey Mouse degrees?

A PhD in property, ffs!

How long's the course? 3 hours?

Nah, at least a couple of weeks, all those repeats of property ladder, location location, relocation relocation, homes under the hammer etc, etc. There's quite a bit of "research" to do.

Back to the OP, high house prices shouldn't stop you from having a family, everyone should get on with their lives and worry about houses later

[Bearback]

Nah, at least a couple of weeks, all those repeats of property ladder, location location, relocation relocation, homes under the hammer etc, etc. There's quite a bit of "research" to do.

Back to the OP, high house prices shouldn't stop you from having a family, everyone should get on with their lives and worry about houses later

Yes, you can always house your family in a tent.

[19 year mortgage 8itch]

Yes, you can always house your family in a tent.

I thought this discussion was about pricing young couples and families out of buying their own homes not the unavailability of affordable family housing for rent throughout the country.

If you can afford to rent a place of a satisfactory standard (as seems to be the case for most people) and have children, then get on with it.

[Mr. Gruff]

http://www.abdn.ac.uk/business/ugradprop.php

Good grief!

That's dreadful, and it's not even RGU!!

Of course, without the property boom, I wonder what would happen to that course...

I don't think that Nick22abdn understands that most people on here know that a property crash is bad news for the economy. Most people on here, I suspect, accept that a real price crash is inevitable and want to be in a better position when it does happen, rather than hoping other people suffer.

ETA:AWOOGA indeed!

Edited May 23, 2007 by Mr. Gruff

[CrashedOutAndBurned]

Sorry to disagree with you on this one, but it is not a decision between having kids and having a home. It is a decision between having kids and having a mortgage.

Nonsense. This isn't continental europe where your rent's just another cost like the gas bill. It's brutal. Friends who just happen to be 5-10 years older than us have mortgage payments of £350-£500, while we face renting a smaller, cramped hovel for £800PCM or 'buying' one for £1200.

To have kids and not live in genuine poverty we'd need a council house or a time machine and there's probably more chance of getting a time machine. Okay, we don't earn that much but out jobs are graduate level. A women I knew bought a one bed flat in the south east for 45k in 1999 while earning 11k working in McRetail. Night and day, night and day.

Edited May 23, 2007 by CrashedOutAndBurned

[@contradevian]

A women I knew bought a once bed flat in the south east for 45k in 1999 while earning 11k working in McRetail. Night and day, night and day.

Well there you have hit the nail on the head. When I bought my first house in 1981 (for about £11k - prices rising strongly)

I certainly wasn't rich. I was a trainee accountant on around £3.5-4k a year.

In fact none of the people in the street were wealthy by any standard. Most had routine factory/office jobs if they weren't retired. Now it would require a professional couple with two professional incomes to buy the same house (those same properties now are worth £180k). That is a measure I think of how the economy is failing and how people are working harder and harder for less and less.

So when people say "its different now" they are right, but not in the way the mean.

[rnicoll]

It is wrong and completely irresponsible to put off having children because you don't own your own home.

Yours, Bomber Brown - baby > child > well adjusted adult thats lived in rented property all his life.

How on earth is it irresponsible?