Thursday, January 3, 2013

Too many old people; not enough young people to buy their overpriced cr*p

Demographic timebomb puts paid to hopes of house price revival

Most households continue to believe that, in time, the UK property market will recover, and that, given even more time, we will eventually return to the easy property gains of recent decades. This belief may, in turn, be one of the reasons why housing transactions remain so depressed, at roughly half their pre-crisis high and some 35pc below their 20-year average; those who might sell hold back because they think that if they wait long enough, peak 2007 prices will again return.

Posted by sibley's b'stard child @ 10:43 AM (2892 views)
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20 thoughts on “Too many old people; not enough young people to buy their overpriced cr*p

  • mark wadsworth says:

    I’m slightly in two minds about this “immigrants drive up house prices” meme, for the simple reason that during the bubble period, house prices were going up everywhere, including in net emigration countries (e.g. Poland).

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  • Too many old people; not enough young people to buy their overpriced cr*p

    Basically the 50s and 60s generation have completely raped future generations in almost every conceivable way. They don’t even have the advantage of looking young any more…..

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  • hpw
    “advantage…..????”

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  • Cashrichassetpoor says:

    Personally I believe that although the housing bubble was mainly caused by lax government control of the lending market I still believe that another cause was lack of supply. Since the downturn house building has decreased so there is even less supply. In time the baby boomers will start dying off en masse releasing some more housing but that won’t be for 10-20 years. So unfortunately I think high house prices are here to stay for the forseeable future.

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  • I think the Elephant in the room is the quality of the housing stock. Theres lots of small to large house built at the turn of the century that are rapidly approaching being beyond economical repair, damp, subsidence etc….just age, and to compound this in the last 10 years just to cash in builders have thrown up undersize poor quality material rabbit hutches with questionable longevity (not 100 years thats a fact)
    You cant blame homeys for thinking the markets rosey and their care home fees are in the properdee, after all they are pumped full of rubbish and given the rosey house price picture they so wish to see… i wonder if they think about there kids.grandkids?

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  • righttoleech says:

    Better the evil mothers did look young……they could enjoy their dotage gang raping each other and spare their delightful offspring

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  • mark wadsworth says:

    ST, if I understand that chart correctly, the glut will go on for another twenty years, i.e. the number of people retiring each year will go up and up until today’s 46 year olds retire (that is the biggest cohort). After that, the number retiring each year will go down again.

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  • the vampire squid pushed world asset prices up, sold up, crashed them down, bought them up, now wants them pushed up again ! outright corruption on a world scale

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  • hpwatcher, “Basically the 50s and 60s generation have completely raped future generations in almost every conceivable way. They don’t even have the advantage of looking young any more…..”

    What a nasty, spiteful sentiment. Surely you must be able to see that the ebbs and flows markets are not primarily due to the philanthropy or selfishness of individual consumers, but due to the incompetence, stupidity and corruption of those who control us all – politicians, bankers, big business, regulators etc.

    Furthermore, had you been in a position to make £100k profit during the boom, would you have turned it down for the sake of the next generation. If the answer is yes, then you deserve elevation to the sainthood. If the answer is no, then I’ll add the charge of hypocrisy to what I said to you above.

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  • Warner started out so strongly with an original idea about demographics but rather blew it towards the end.

    “Even taking account of the tax advantages of home ownership, property may no longer be the sure-fire investment it once was. And if that’s the case, it leaves yet another big hole in the UK economy. For, along with North Sea oil and financial services, the housing market has been one of the three big drivers of UK growth and consumption this past 30 years.”

    North Sea oil was certainly useful, financial services has been a mixed blessing at best but stating that the housing market was a driver of UK growth is nuts. The housing market is a big driver in average household debt and bank profits.

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  • stillthinking says:

    Mark that is right yes stuffed to the gunwales with pensioners, who must be nervously considering the hostile looks coming their way from their future providers. Also I tried to find the chart again, I couldn’t, the state sector is skewed towards the elder group. So over the twenty years there will be a disproportionate quantity of state pension draw downs, a double whammy.

    This is going to take ages to drag out though, I doubt anybody will sell up immediately. I am 42 now, I started getting interested at about 36 because I was out of the country between 32 and 36, when I came back everybody was laughing about having 20K on their credit cards. Looked weird.

    However, the situation has now become for me that the UK doesn’t easily offer any reliable store of value or even employment, and that my costs for (rent+tax) were about 70% of my wage i.e. my main concern has now morphed into the gross confiscation of my earnings by a (in my view hostile) state. That UK pensioners after their failed attempt to put their own young into penury are now going to fail to sell their single asset and live out their days short of money makes me wonder about what other scheme they might try.

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  • mark wadsworth says:

    DT, the UK population pyramid is easy, there was a blip in babies just after WW2 (unsurprsingly) and the Baby Boom took off for real in about 1950, then there were more babies born each year until about 1965 and since then it has been going down again.

    So the largest age cohort is 46 year olds, assuming the theory is correct, house prices will slide until those 46 year olds hit retirement and won’t start picking up until long after that. Which is good news, I might as well stay renting until I retire and then buy a house for cheap at the bottom of the market 🙂

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  • mark wadsworth says:

    For DT read ST i.e. Stillthinking.

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  • MW – ‘I might as well stay renting until I retire and then buy a house for cheap at the bottom of the market’

    I came to that same conclusion reading the article. Its a risky strategy but everyone thinks I’m being risky now by not having bought a house. May as well continue saving & renting and see what I can buy in 25yrs for my retirement. Mrs R may have long gone by then though!

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  • There have always been pensioners; many were poor in the past, many are so today. Blaming pensioners for the country’s ills is a huge red herring, even if they are increasing. The fact that people are longer lived also means the middle aged will be pensioners for some time.

    Look at the large corporations, especially the banks, and the plutocrats for your culprits. Look at their ability to avoid tax, their political influence; look at how they caused the financial crisis and the consequences. Govt is in their thrall and austerity is their path to riches, yours to penury. Take a look at the Counterpunch articles posted here by icarus, or Paul Krugman’s articles. Or simply take a closer look around you.

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  • tommyr

    Buying a house now is a bit like buying gilts now. All strategies are risky; it’s a question of which is the riskiest.

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  • mark wadsworth says:

    TommyR: “Mrs R may have long gone by then though!”

    Great, so you won’t even need to buy a house, you’ll only need to buy a flat.

    LTF 14, agreed. But pensioners are always willing to blame everything on those beneath them in the pile, i.e. welfare claimants. The Tories are busily putting about the myth that the welfare state costs over £200 billion (but politely forget to mention that two-thirds of this is old age pensions). They also politely forget to mention that private sector subsidies in all their guises are also £200 billion a year – this is a large part of the massive theft which you are alluding to.

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