Tuesday, June 1, 2010

City wire tells it like it is.

Property bubbles steal from the next generation

An excellent summary of the situation.

Posted by chrisch @ 05:26 PM (2256 views)
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6 thoughts on “City wire tells it like it is.

  • Of course bubbles steal from others – that’s why they are there.

    I come from an engineering background and believe in the principal of adding value to make money. Buy something, make it into something more useful, sell it on.

    All of the “markets” do is distort prices – they create bubbles. The parasites take my earnings and divert them into their own pockets without adding value to anything I do. Oil bubble, housing bubble, steel bubble, any bubble – the high earnings of these parasites are coming from you and me.

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  • mark wadsworth says:

    Indeed.

    The Home-Owner-Ists always say “You can’t tax our property gains, as we want to leave our housing to the next generation”, what they are actually doing is exactly the reverse. They are heaping the tax burden and the debts onto the next generation.

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  • And the next generation are totally screwed unless something drastically changes. I must admit my whole belief in STR was on the back of the younger generation being given a bite at the cherry. It would seem the country is prepared to go broke before that is allowed to happen though.

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  • gone-to-colombia says:

    And to our childrens, childrens children –
    All right Stan don´t labour the point

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  • A good summary of how we’ve gotten UK plc stuffed to the eyeballs with debt. Not a very happy bit of reading.

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  • tenant super says:

    The comment about giving the next generation a chance on the basis of merit rather than inheritance is partially true. For those whose parents are very wealthy and can buy them a des res (like the blairs bought their children) it is true but they are a minority.
    For us, if both parents died tomorrow, we would each get about £100k (since Darling raised the tax limit to £600k) . If my parents had an average size family (3 rather than 6 children) we would get £200 K each. The £100k gives an excellent deposit; £200k enables us to buy a decent family home with a very small or no mortgage.

    However, my parents at 59 and 66 are in excellent health and I would be surprised if they are both no longer here in 20 years since longevity runs on both sides. By then, their eldest child will be 56 and the youngest will be 41. All but the youngest (who will be on the cusp) will be long past having children. So with people living longer, an inheritence is pretty useless for buying your kids a family home. Unless they’re willing to downsize, what they do instead is take a chunk of equity from their home but this is really the same as the children borrowing that ludicrous salary multiple themselves. The house is simply insurance or collateral and the mortgage interest slavery is the same.

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