Monday, Sep 07, 2015

Is the tide starting to turn?

Moneyweek: Property investors beware -the people want house prices to fall

According to the FT, a recent international survey by ING found that nearly three-quarters of European consumers believe that “a fall in house prices would benefit society”. What’s particularly interesting is that it wasn’t just renters who thought so. More than two-thirds of European homeowners – whose net wealth would presumably be threatened by falling prices – agreed too.
Looking at the figures in more detail, nearly 60% of British homeowners and nearly 80% of renters thought a drop in prices would be a good thing.This is yet another sign that the political mood music is changing.'
Yeah, I know, Moneyweek have called it wrong on HPC before but maybe this time...
Just checked the Edinburgh market and saw many reduced prices, mainly quite small but some up to 16%.

Posted by a saver @ 11:34 AM (6013 views)
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1. khards said...

As a homeowner it doesn't matter either way to me if prices go up or down because I never plan on selling or moving again. Neither do I plan on borrowing against the property either.

I can't see why the media get all excited when price rise. It only matters to those living in shithole London who plan on moving out because it is that bad.

Monday, September 7, 2015 11:42AM Report Comment

2. cornishman said...

"This is yet another sign that the political mood music is changing"

I think that Tony Blair and his gang is quite likely misreading the mood in the country when he says that Corbyn will be bad for Labour. What worked for Blair in the past probably won't work by the time we get to 2020.

By then, a large portion of the electorate will probably feel that a Corbyn government is just what they need.

Monday, September 7, 2015 11:57AM Report Comment

3. taffee said...

When things start to unravel people will realise they have been hoodwinked.

Still selling off social housing when they should be expanding it

Help to buy overpriced property up to 600k(totally insane)

Near zero rates for too long creating bubble on top of bubble

Perhaps a bit of socialism might be just what we need.....they say labour failed in the 70s
Well houseprices soared so did wages and its known as the best decade for quality of life!

I'm not a labourite myself but the current policies are nuts

Monday, September 7, 2015 12:12PM Report Comment

4. khards said...

It's unlikely interest rates will move north of 2% as it will bankrupt the banks and make financing mammoth governments very expensive. If rates rose to 2% there would be a massive sell off (losses) in property, stocks and bonds and the financial system would need bailing out at this higher interest rate of interest. Add to that high profile defaults, businesses borrowing to buy back their own shares etc.

Carnage for the rich is unlikely to happen when they are in control of the rates. Rates should have never dropped this low to start with!

I don't see politicians helping even if it's what the electorate wants. It's detrimental to their future careers in the banks.

Monday, September 7, 2015 02:23PM Report Comment

5. a saver said...

Khards @4 'I don't see politicians helping even if it's what the electorate wants. It's detrimental to their future careers in the banks.'

They could withdraw the Help to Buy scheme, saying it's what the people want. BTW I'm a home owner too but would like to buy in a more expensive area. And for my son to be able to afford a place of his own.

Monday, September 7, 2015 07:17PM Report Comment

6. i remember the 90`s said...

As a homeowner I would happy to see 50% drop in house prices of course I don`t see it happening .

Tuesday, September 8, 2015 06:26AM Report Comment

7. hpwatcher said...

Wow - the capitulation on these boards is pretty complete.

Tuesday, September 8, 2015 07:12AM Report Comment

8. britishblue said...

I Think there are a lot of people of my age that made a huge amount on a property and some have been very self congratultory on how successful they have been. They go into the job market quite easily after school or university,. saved a bit for their first property and now are sitting on a pile. But their children are now growing up. Some have left university with huge student debts and are facing an uncertain future, living in permanent rented accommodation. Some of these home owner parents are now seeing the flip side of their gains, that the only hope of their offspring is that their parents die and they inherit.

Tuesday, September 8, 2015 07:18AM Report Comment

9. hpwatcher said...

I Think there are a lot of people of my age that made a huge amount on a property and some have been very self congratultory on how successful they have been.

I'd go a bit further than that. One told me - and I quote - ''I'm a f**king genuis!!!'' because they had inherited a hole and then bought a rabbit hutch.

that the only hope of their offspring is that their parents die and they inherit.

For an increasing number of home owners, even that may be too much to ask. It's now routine that homes are confiscated by local councils to pay for extortionate health care costs.

Tuesday, September 8, 2015 07:40AM Report Comment

10. britishblue said...

Hp @9 or to pay for extreme welfare costs due to councils paying thousand each month on private rebtals when if they would have kept the council house it would be down to 100 a month just for the maintenance.

Tuesday, September 8, 2015 08:25AM Report Comment

11. mombers said...

"It's now routine that homes are confiscated by local councils to pay for extortionate health care costs."
People are welcome to pay for their own care. What's the alternative? Dump the bill on the next generation who are already having excessive percentages of their private property confiscated by HMRC and landlords?

Tuesday, September 8, 2015 08:50AM Report Comment

12. hpwatcher said...

People are welcome to pay for their own care.

Most pensioners don't have much money, although they may have a house. What I object to is the underhand ways that councils have been using to unlock property value. The biggest costs councils have is administration fees; I'd like to see the generous expenses cut for all staff, especially local councilors.

Tuesday, September 8, 2015 09:33AM Report Comment

13. judgandury said...

'Wow - the capitulation on these boards is pretty complete'.

I bet that most of this site's long term contributors bought a house as soon as their finances allowed. Almost everyone in this country wants to own a house.

Tuesday, September 8, 2015 09:55AM Report Comment

14. Bulboy said...

Not as soon as finances allowed, but when the timing seemed right and the house was right. This board helped waiting off the hype of 2007 (a lot of ppl could afford then on liar loans) and buying in relative minidip (for my area).

Tuesday, September 8, 2015 10:49AM Report Comment

15. hpwatcher said...

Almost everyone in this country wants to own a house.

Indeed - but at what the price? That's the important bit.

Tuesday, September 8, 2015 12:20PM Report Comment

16. bidin'matime said...

'Wow - the capitulation on these boards is pretty complete'.

Well, you know what they say happens when the last bears turn bull...

Tuesday, September 8, 2015 12:55PM Report Comment

17. mombers said...

@12 Lots of people don't have much money, it makes sense to try to limit confiscation of private property to those most able to afford it and especially concentrate on unearned wealth like land. Nobody needs a house once they have died whereas low income families need to keep as much of their wages as possible to live a decent life that reflects the value that they create by working.
BTW councils are not as efficient as they could be but just like central government, they spend a lot of money on taking care of the elderly

Tuesday, September 8, 2015 01:34PM Report Comment

18. cyril said...

@13, 14 yes I agree - I own my own house which I bought ages ago but I would still like the value of houses to go down.
I can't see how astronomical house prices benefit anyone who is just a normal owner occupier. Except perhaps if you want to move somewhere else where the houses are cheap. (It would be difficult to find anywhere smaller).

Tuesday, September 8, 2015 04:11PM Report Comment

19. khards said...

I guess it came down to paying 800pcm+ rent or 400pcm repayment mortgage. Plus In my 35 years I have moved 21 times, glad to say that I won't be moving again unless i'm in the box.

Tuesday, September 8, 2015 08:04PM Report Comment

20. hpwatcher said...

Nobody needs a house once they have died whereas low income families need to keep as much of their wages as possible to live a decent life that reflects the value that they create by working.

The only chance a GREAT many people have of owning a home is by inheritance - which you are advocating gets taken away by revenue hungry local councils. Your comments are thoroughly off.

Wednesday, September 9, 2015 08:27AM Report Comment

21. mombers said...

@19 Even more who are not in line for an inheritance have no chance of ever owning a home. The average age of inheritance has just hit 60 anyway - not of any use when you want the security of homeownership for kids at school. To make low income working people cough up their earned income to allow someone else to get some unearned wealth strikes me as unfair. There's no magic money tree to pay for end of life care, if people are not willing or able to pay for it privately in advance, I think taking it in the least damaging and unfair way is best. I will do my level best not to dump too much of my old age on the next generation. I am planning for the inevitable bankruptcy of the state pension, it will have to move to a system where you have to exhaust your assets before getting welfare, just like working age benefits. Goodness knows what they'll do with the NHS, which will be spending the vast majority of its budget on old people. No doubt there will be some sort of means testing introduced for the working age population. As a Georgist, I'm against means testing of any sort but I can't see governments straying from their increasing reliance on it to attempt to raise extra revenue.

Wednesday, September 9, 2015 09:28AM Report Comment

22. mombers said...

@19 BTW I'm in line for a modest inheritance but judging by my family longevity, it will be in at least another 20 years, hopefully longer provided they don't lose their marbles :-) Not of any use to me, I will be looking to downsize by then if anything. I would rather keep more of my earned income now to provide the best childhood for my children as possible.

Wednesday, September 9, 2015 09:31AM Report Comment

23. sibley's b'stard child said...

Sentiment is still years away from reaching tipping point, by which time the only thing the establishment will understand is the wall against their backs. Until then we can expect more of the same socio-economic iniquity and transfer of wealth to the 1% and their minions.

And, yes, Judgandjury (sic) I bought last November. Still feels like a loss when you work out how much of your lifetime earnings will needlessly go to the vipers in the banks simply because our leaders see fit to prop up prices for their chums. I pity the next generation unless wholesale political changes are made.

Wednesday, September 9, 2015 10:38AM Report Comment

24. judgandury said...

I agree with hpwatcher. I think communist style taxes mean well but they always seem to end up causing poverty and misery. It's the most natural thing in the world for parents to graft hard to give their children a leg up. If you take that sort of incentive away to level the playing field you end up causing ten problems for every one you solve. Also as hpwatcher says, if you keep giving councils the ability to take more money, they'll spend it even faster. Look what happened with speed cameras.

Wednesday, September 9, 2015 10:54AM Report Comment

25. cornishman said...

I don't think mombers' comments are 'thoroughly off' at all.

Why should a young working family pay for the ongoing care of an unrelated elderly person through their taxes - if the elderly person has assets that they could sell to pay for their own care?

If the family of the elderly person want to ensure they get the house as an inheritance, they are perfectly entitled to look after the elderly relative themselves. The 'revenue hungry local council' would not then be involved.

Health care is a separate issue, though.

Wednesday, September 9, 2015 11:22AM Report Comment

26. judgandury said...

'Why should a young working family pay for the ongoing care of an unrelated elderly person through their taxes - if the elderly person has assets that they could sell to pay for their own care?'

Because when they were younger the elderly person probably paid a lifetime of contributions to help other unrelated elderly people. Where does it end if we start penalising old people who paid a lifetime of taxes and now have something to pass on? Talk about a disincentive to do well. I really hope I can pass something on to my kids

'they are perfectly entitled to look after the elderly relative themselves'.

What if they cant? What if they have a disabled kid or are ill or any number of other things that life throws up?

Wednesday, September 9, 2015 11:55AM Report Comment

27. mombers said...

@25 The Baby Boomers have paid in much less than they are going to get out - for example the State Pension has unfunded liabilities of 3.8tn. They paid for the care of a much smaller elderly population. If a company did the same thing, i.e. promised pensions to employees without setting aside a dedicated pot of capital, the directors would go to jail. What happens to those pensioners if the company can't or won't pay?
I really can't see how on earth there will be enough revenue to pay me anything near what current pensioners get. Where's the justice in poor families going without when what they are allegedly paying for will never come back to them? The burden of this cockup by the Baby Boomers should at least be shared with them and the working population, at the moment they've gotten off scot free.
And regarding communist style taxes, I fail to see why asking someone to chip in for a service rendered if they have something to give is the same as a non-optional confiscation of the most fundamental private property: one's labour. Income and corporation tax is the nationalisation of labour and profits, As Cornishman said, there is no need to get the council involved, you can sell your house and go into a private care home. And I can promise you what motivates me to go to work every day is not so that I can pass something onto my children, it is to provide for my family now and give them a good platform to succeed in life on their own.

Wednesday, September 9, 2015 12:41PM Report Comment

28. judgandury said...

@26 you are a bit wide of the mark if you think that your so called unfunded liabilities are the fault of baby boomers. That's just political speak. The accounting wont be half as simple as you think. I recently read that we have a lower percentage of pension liabilities than the European average and they are not strictly liabilities, so there is no reason to sensationalise it. I honestly didn't mean to have a dig at you being a communist. I was just surprised to read the 'property is theft' type comments in this day and age. All that stuff got chucked out so long ago that I guess it can be given another outing. It's a bit like flared trousers. Everyone laughed and then they were back!

Wednesday, September 9, 2015 02:59PM Report Comment

29. clockslinger said...

It's Moneyweak ffs. Why are we discussing this article?

Wednesday, September 9, 2015 06:29PM Report Comment

30. mombers said...

@27 you're right that we have lower unfunded liabilities than most of Europe - this is due to our higher (although still below replacement rate) birth rate and immigration. Germany is set to lose 20m people over the next 40 years, this makes paying current levels of pensions and other old age benefits absolutely impossible. It's actually one of the reasons that they are willing to take in so many refugees.
These are softer unfunded liabilities than company pension schemes - you can't change the terms of those post hoc (save for in bankruptcy proceedings), whereas the state pension can be made more manageable by raising the retirement age. The NHS will have to become a lot more rationed. Luckily the NHS offers superb value for money, countries like the US with high spending are absolutely stuffed.

I still think that it is much fairer to ask people to run their own assets down before passing the hat around to struggling working families. People on minimum wage are having their private property confiscated and put into the pot that you suggest should be raided to protect unearned inheritance.

Thursday, September 10, 2015 09:55AM Report Comment

31. judgandury said...

nah, if working families are struggling they don't actually pay much tax. You just want take money away from people who've got property. Property is theft because its unearned and all that stuff. I spent enough time in marketing departments to know a re-branding exercise when I see one. It's just good old fashioned communism wearing stick on glasses and beard. Good for you mate but you do realise that stuff will never fly?

Thursday, September 10, 2015 10:22AM Report Comment

32. reticent said...

I'm with Mombers.

Sense goes out the window when people talk about inheritance in this country.

There's nothing communist about confiscating people's assets when they die, or are about to. Inheritance is anti-competitive, if anything.

I note no one thinks it's unfair for people to pay for their care up until they run out of cash, but selling the vacant home is off limits, because for most middle class families, that's where the bulk of the inheritance will come from.

I guarantee those heirs so keen to outsource their parents' palliative care to the state for free would be arguing over who got to look after them if it meant they got reductions in their LVT bills.

Sunday, September 13, 2015 07:51AM Report Comment

33. judgandury said...

"There's nothing communist about confiscating people's assets"

Sunday, September 13, 2015 10:04AM Report Comment

34. reticent said...

Well, since you only chose to address one snippet of what I wrote, I'll just focus on that and assume you took no issue with anything else I said.

When you're dead, you don't own anything, so the terminology "confiscating assets" is flawed in the first place. The convention that the property of deceased people goes to whomever they nominated in their will before they died, or else their next of kin, is an arbitrary one, no matter how "natural" it may seem to people in our culture. Feudalism seemed pretty natural not long ago. The state sets the law and the rule of law is what assigns property. When someone dies, a reassignation is necessary and the law is what determines how that occurs.

In any case, the state confiscates and freezes the assets of all sorts of people for all sorts of reasons. Do you also think the Russian/Iranian sanctions or the auctioning of druglord's assets in the US are communist?

The whole reason communism failed and that capitalism emerged as the far superior system is that communism was completely unmeritocratic. Aside from all the autocratic issues with a large state that made living under it so unpleasant (and repression leads to instability leads to revolution etc.), the reason why it collapsed was that were no rewards for industry and therefore no incentive to work hard, take risks, stand out or indeed do anything that might grow the economy. Inheritance is not a reward for industry. It's a reward for privilege. If you think taxes upon labour are somehow less capitalist than taxes upon inheritance, then you simply don't know what capitalism is.

And there is little difference between forcing people to sell their properties when they're taken into a home and forcing their heirs to sell them once they've died. I've never heard of anyone being taken into a nursing home because they were unable to look after themselves at home, only to be released with a clean bill of health. I imagine that's because it's literally never happened.

A state that spends huge amounts of money on palliative care sounds fairly socialist if anything, and whether or not that is administered as a universal benefit or on a means-tested basis (and that's effectively what we're talking about here) doesn't really capture the gulf of difference between communism and capitalism.

And for the record, I'm not advocating 100% inheritance tax, I only mention it because I think how horrified by it people are says a lot about where their real priorities lie. The authorities in this country pay lip service to the principles of free market capitalism, but more often contort them to justify/excuse/ignore a system that entrenches privilege (ie crony capitalism).

Sunday, September 13, 2015 03:57PM Report Comment

35. judgandury said...

drug lords, revolution, sanctions? Good lunch time session was it?

You talk about our 'culture' like it's a bad smell. There's a few thousand people in Calais who'd gladly swap places with you. Pad it out as much as you like but you still want to confiscate assets and it never stops there. It's a free country so believe and say what you want. Millions of people from asset confiscating type countries would love to have that right

Sunday, September 13, 2015 06:30PM Report Comment

36. reticent said...

Everything that attracts migrants to our country, our freedoms, prosperity and globally-admired institutions, particularly the rule of law, came about because of (and are kept in check by) a rich tradition of intellectual thought, philosophical enquiry and courteous, spirited debate. You seem incapable of the last of these, at least where I'm concerned, so telling me I have no respect for our 'culture', because I dare to challenge the right for people to inherit the property of people they can't even be bothered to contribute towards the care of in their dotage seems a bit rich.

Sorry if that seems a little unfair. If It makes you feel more at home, you'll be happy to know there's another commenter on here who likes to dismiss everything he doesn't like the sound of as communist, so you're not alone.

Sunday, September 13, 2015 09:38PM Report Comment

37. judgandury said...

temper, temper. All you've shown me is what I already knew which is that simple extremist views are usually the result of personal frustration and immaturity. You and your mate above try to excuse your confiscation fantasy with a manic depressive vision of a future where we can't afford anything. Tell me, how's your prediction success rate? Turn that frown upside down mate and you will realise that things aren't as bad as you think.

Your list of what makes Britain attractive misses out some of the best bits which shows that you don't really get it. One of the most important things is the absence of extremist views. Think about that. Freedom and the right to do well and benefit your family are also the sorts of thing that attracts people. You'd ruin all that with your with your asset confiscation dream. Another thing you don't get about normal people is that even if they don't have a fat wallet they hope that one day they will or that one of their kids will. They would be pretty angry at the thought of someone like you taking it away if they did make it. Why bother grafting if that's the case? That's why it will always frustrate you that most of the people you think you're helping don't like your ideas.

And by the way, the NHS is meant to be free and for the benefit of everyone, rich and poor and yes even the dying who did their bit and have earned the right for society to now help them ...even if they had the cheek to have done well. That's another little gem that marks us out. Hopefully it'll never get to the stage where someone like you stands outside hospital car parks with a clipboard saying sorry 'it isn't for Volvo and above'. Your ideas would break up the NHS just as much as the privatisation wan&*ers. They could spend more on the NHS if they had to because it was created when we had far less.

Your attitude to the rights of the dying or the dead are pretty gruesome...or they would be if I thought it wasn't just a bit of youthful thoughtlessness. To normal people they are not just carcasses with a past they owe to the state. These people spent a lifetime contributing and now its their turn to receive. You cant just strip them of their achievements when its their turn to receive help. Have you ever heard of a will? That's the legal thing decent countries use to give people the freedom to choose what to do with their stuff after they die. You'd have to declare all wills null and void to get your way. Ya vol mein capitan

Monday, September 14, 2015 08:50AM Report Comment

38. reticent said...

Temper, temper? For going so far as to charge you with being incapable of courteous debate? Is that supposed to be a joke?

You've called me drunk and a communist. You've patronisingly explained to me what a will is and that migrants are attracted to our country because of our freedoms and prosperity, even though I alluded to all those things in my last two posts. You've referred to the implementation of a policy that I made it perfectly clear I was only ever discussing as a thought experiment to make a point, as me "getting my way". Then, you end it all by invoking Godwin's law.

Somehow, I'm the one who's immature(!)

Monday, September 14, 2015 12:24PM Report Comment

39. judgandury said...

I must remember to use 'only a thought experiment' next time I want to back away from my own words.

Monday, September 14, 2015 12:52PM Report Comment

40. reticent said...

Back away... before the fact?

"And for the record, I'm not advocating 100% inheritance tax, I only mention it because I think how horrified by it people are says a lot about where their real priorities lie."

Well, at least you read one of my posts in its entirety!

Monday, September 14, 2015 12:57PM Report Comment

41. judgandury said...

"I'm with Mombers".

"There's nothing communist about confiscating people's assets".

"When you're dead, you don't own anything"

"When someone dies, a reassignation is necessary"

".....challenge the right for people to inherit the property"

"There is little difference between forcing people to sell their properties when they're taken into a home and forcing their heirs to sell them once they've died"

At least it didn't take long before you rowed back.

Monday, September 14, 2015 01:37PM Report Comment

42. reticent said...

Funnily enough, I thought 100% inheritance tax and means-testing access to free palliative care were separate ideas. Silly me.

Do you have to declare all wills null and void for the council to "unlock property value" in the way they currently do, yet you and hpw so object to? Because they seem to be managing it in a world where people are still bothering to draw up wills.

Monday, September 14, 2015 02:05PM Report Comment

43. judgandury said...

"There's nothing communist about confiscating people's assets".

Monday, September 14, 2015 02:40PM Report Comment

44. mombers said...

Wow, I thought there were no more posts in this thread but glad I came back to check.
"There's nothing communist about confiscating people's assets".
Let's see, if your asset is your ability to earn a living, a significant portion of this is confiscated, and we don't live in a communist state by any means. National Insurance and Income tax is 32% for people earning 11k+, if you include employer's contributions (which depress wages and might as well just be charged to the employee), it's 40.2%. Compare to IHT which is 40% on assets over 325k, so arguable a lower rate at a MUCH higher threshold. I would say that the former is a more egregious confiscation than the latter.
I think too many people conflate private property with houses to the exclusion of other asset classes. Everyone except the severely disabled has an ability to earn a living whereas very few (less than 3%) estates are worth enough to pay a penny of IHT. It seems a seriously unfair policy to make a minimum wage earner chip in to protect the inheritance of someone else. The incentives are completely whacked - many people are stuck on benefits because of ridiculously high marginal tax rates on working, and many people tuck in to an early retirement when they hit the jackpot of having rich parents.
By the way, I have very rich parents but my primary concern right now is giving my children a good childhood. An inheritance in (hopefully) at least 20 years is of no use to me. I also don't go to work to build up a pot of assets for my children to have when I die, I go to work to provide for our needs now.

Thursday, September 17, 2015 12:20PM Report Comment

45. reticent said...

Whilst I disagree with a lot of what you wrote on the downsizing thread, I could have written pretty much all of that last post myself.

IHT is the confiscation of people's assets ONCE THEY'RE DEAD (funny how j&j never quoted that part of my original post).

If IHT is communist then George Soros and Warren Buffet (both calling for more estate tax in the US) are communist. Somehow, I think not.

If the choice is between IHT and IT/NI (and, in this case, it is), IHT is obviously the less communist, more meritocratic/capitalist choice. Like most middle class Londoners, I have a lot to gain from policies that reduce IHT/ringfence inheritance etc. I realise that it's idealism that borders in Utopianism, but I would rather my children grew up in a world where what I'd imparted to them, mattered more to their chances of success in life than what I'll bequeath them.

Sunday, September 20, 2015 10:15PM Report Comment

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