Cost of living increases

[hlane17]

I don't think house prices will crash. There's a housing strategy around more supply rather than letting demand spiral out of control. The pandemic may actually help, as people realise they don't actually have to live near their office, reducing the need for commuting.

A little known fact but something that happened early on in the pandemic to go with SDLT cuts was the return of 'subprime' mortgages.

People were having to put as little as 5% deposit on the houses they were buying and signing up to variable rates. When the interest rates pinch, it's not going to be pretty at all.

We have an economy that is addicted to borrowing.

Having worked in the property sector during the pandemic (now left out of total despair at the situation) I'd dispute we're anywhere near close enough to producing enough houses yearly to shore up the supply shortage.

Might I speculate that there is a greater benefit to those involved if they drag out developments and sell each unit at a premium while the bubble is still inflating... that is my opinion anyway.

 

[WhiteNoise]

We have an economy that is addicted to borrowing.

we have an economy that is addicted to property ownership.

 

[GBJ]

I don't think house prices will crash. There's a housing strategy around more supply rather than letting demand spiral out of control. The pandemic may actually help, as people realise they don't actually have to live near their office, reducing the need for commuting.

They’ll crash if the demand slows down, and a looming financial **** show might not be conducive to keeping demand where it currently is.

On top of that, as I mentioned, £300k for a first time property in less affluent areas such as Grays/Ockendon/Tilbury is way out of most peoples reach and grossly overvalued in my eyes

Agree about people re-evaluating whether they need to be close to the office or not. Of course, where the pandemic hasn’t helped is the slowing down of new builds.

 

[hlane17]

we have an economy that is addicted to property ownership.

I would say there is nothing inherently wrong with having your own property whether that is housing, or shop premises, etc. When done correctly it creates stability.

My original point back in the thread is how our 2008 band-aid policies are coming back to bite us massively on the backside combined with a huge injection of cash by government spending to prop up the country during a pandemic.

You simply cannot throw money at a wall to make more money and get the economy moving but that's been our tactic for years now.

You're going to make the post-pandemic inflation caused by economic recovery even worse and we're seeing the results of that now.

 

[GBJ]

We have an economy that is addicted to borrowing.

Addicted is the wrong word. I’d say we’re dependent on it.

Agree with everything else you said.

 

[hlane17]

Addicted is the wrong word. I’d say we’re dependent on it.

Agree with everything else you said.

Very true, borrowing is the driver of our growth and I have no issue with it when it's done reasonably. I can't say our national borrowing has been anything close to sensible in the last 15 years.

Our monetary, fiscal and economic policies are leading us towards more inflation than is necessary.

I just despair for those who will be hit hardest by this. The girlfriend and I might not get our first home anytime soon but we do have a roof over our heads. Others won't be so lucky.

 

[GBJ]

we have an economy that is addicted to property ownership.

As it’s probably the number one asset that you could ever own, I can understand why.

 

[WhiteNoise]

I would say there is nothing inherently wrong with having your own property whether that is housing, or shop premises, etc. When done correctly it creates stability.

My original point back in the thread is how our 2008 band-aid policies are coming back to bite us massively on the backside combined with a huge injection of cash by government spending to prop up the country during a pandemic.

You simply cannot throw money at a wall to make more money and get the economy moving but that's been our tactic for years now.

You're going to make the post-pandemic inflation caused by economic recovery even worse and we're seeing the results of that now.

we have an economy that relies on scarcity of housing. private property is an asset that only ever increases in value due to that scarcity, which results in huge inequality and incentivises hoarding of property. likewise we have a private rental market with grifters expecting workers to pay their mortgage and a premium on top, which continues to pull the ladder up and away from people who are working hard but having to spend a disproportionate amount of their income on ever-increasing rent.

the game is completely rigged, and I say that as someone with a mortgage but worries about the future we're creating for our children.

 

[GBJ]

Very true, borrowing is the driver of our growth and I have no issue with it when it's done reasonably. I can't say our national borrowing has been anything close to sensible in the last 15 years.

Our monetary, fiscal and economic policies are leading us towards more inflation than is necessary.

I just despair for those who will be hit hardest by this. The girlfriend and I might not get our first home anytime soon but we do have a roof over our heads. Others won't be so lucky.

Agreed, I remember hearing - although cannot for the life of me remember where - that nearly 50% of the British work force (c.17m people) are essentially living paycheck to paycheck, with the vast majority having less than £200 savings.

If they didn’t borrow, they’d be ****ed…. But because they do borrow, their debt situation gets worse, which for a lot of them will eventually lead to being ****ed anyway.

But what do you do when your washing machine or boiler packs up & you can’t afford it or have nobody to fix it for free?

For clarity, I put myself in that bracket (although the only thing I have on “credit” is my phone).

 

[Napster]

Agreed, I remember hearing - although cannot for the life of me remember where - that nearly 50% of the British work force (c.17m people) are essentially living paycheck to paycheck, with the vast majority having less than £200 savings.

If they didn’t borrow, they’d be ****ed…. But because they do borrow, their debt situation gets worse, which for a lot of them will eventually lead to being ****ed anyway.

But what do you do when your washing machine or boiler packs up & you can’t afford it or have nobody to fix it for free?

For clarity, I put myself in that bracket (although the only thing I have on “credit” is my phone).

Yes and the impending pensions timebomb as well - no-one's saving for pensions so the elderly will be v.poor!

 

[GBJ]

we have an economy that relies on scarcity of housing. private property is an asset that only ever increases in value due to that scarcity, which results in huge inequality and incentivises hoarding of property. likewise we have a private rental market with grifters expecting workers to pay their mortgage and a premium on top, which continues to pull the ladder up and away from people who are working hard but having to spend a disproportionate amount of their income on ever-increasing rent.

the game is completely rigged, and I say that as someone with a mortgage but worries about the future we're creating for our children.

You’re absolutely spot on about the system being rigged.

How is it possible that someone can rent a property for £1500pm, but then not be trusted with a mortgage repayment of £800-£1000pm.

I wish someone could make it make sense.

 

[hlane17]

we have an economy that relies on scarcity of housing. private property is an asset that only ever increases in value due to that scarcity, which results in huge inequality and incentivises hoarding of property. likewise we have a private rental market with grifters expecting workers to pay their mortgage and a premium on top, which continues to pull the ladder up and away from people who are working hard but having to spend a disproportionate amount of their income on ever-increasing rent.

the game is completely rigged, and I say that as someone with a mortgage but worries about the future we're creating for our children.

Well looks like we're in agreement here!

Housing supply needs to increase but as I've speculated it appears that those responsible for it prefer to drag their feet for their own short term gain.

I'm 21 in August and I had saved relentlessly working over 2 years of a pandemic with my girlfriend for us to realise that house prices have not only outstripped the rate at which we can save (pushing back our planned moving out) but also the rental market is extortionate and not an option.

The rental trap is real and it's becoming even worse. We would love to move out but we would burn our savings if we had to rent, putting us in an even worse position than we are now.

This is the most serious issue the country faces but nobody talks about it. Everyone wants a future for their family and property ownership is an important part of that, it allows you to pass your bit of money and prosperity down to the next generation.

 

[hlane17]

Yes and the impending pensions timebomb as well - no-one's saving for pensions so the elderly will be v.poor!

At the age of 20 currently I think once I hit my 60s-70s there will be no state pension and also no retirement age.

I withdrew my pension saved over 2 years of work and put it in the savings instead because I think it would be of so little value by the time I get to withdraw it. Might as well use it now to get a handle on the present.

I'm currently taking a path to eventual self employment hopefully so I can take control of this situation, I don't think I can trust external factors to protect me going forward.

I hate to be the bearer of bad news but all signs point to volatility in the economy and the inflation we're seeing is just the beginning. Just hope all you Shrimpers will take care as things get bumpy.

 

[Napster]

This is the most serious issue the country faces but nobody talks about it. Everyone wants a future for their family and property ownership is an important part of that, it allows you to pass your bit of money and prosperity down to the next generation.

Yeah I hear you. My daughter's 21 and she'll have to save a lot before moving out.

 

[GBJ]

Yes and the impending pensions timebomb as well - no-one's saving for pensions so the elderly will be v.poor!

Spot on. By the time I hit retirement age (if I ever get there - I’m 35 now), I’m convinced state pensions won’t exist.

Even mine and my missus’ private pensions aren’t particularly great. I think, by current calculations, we’d have enough between us to last maybe 5-years.

A lot of people - especially young people - have no idea about pensions, which is criminal in my mind.

 

[hlane17]

A lot of people - especially young people - have no idea about pensions, which is criminal in my mind.

It scares me how little some people know about anything like this.

I always bring it back to the old saying I have. We were taught the Pythagoras theorem but never taught how to avoid insurmountable debts, how to set up pensions for retirement, how to judge if a mortgage is reasonable.

The only place you could learn that important stuff during my school years was Economics class, which was optional ?

Lucky I picked it really otherwise I'd be just as clueless.

 

[WhiteNoise]

Well looks like we're in agreement here!

Housing supply needs to increase but as I've speculated it appears that those responsible for it prefer to drag their feet for their own short term gain.

I'm 21 in August and I had saved relentlessly working over 2 years of a pandemic with my girlfriend for us to realise that house prices have not only outstripped the rate at which we can save (pushing back our planned moving out) but also the rental market is extortionate and not an option.

The rental trap is real and it's becoming even worse. We would love to move out but we would burn our savings if we had to rent, putting us in an even worse position than we are now.

This is the most serious issue the country faces but nobody talks about it. Everyone wants a future for their family and property ownership is an important part of that, it allows you to pass your bit of money and prosperity down to the next generation.

the point i'm making is that people don't really want the housing supply to increase. they don't want estates built in the fields behind their house. they believe there'll be a strain on local infrastructure, they worry it'll impact their house value because they're relying on that due to a poor pension. you see it every time a housing development is proposed, they'd rather make it more difficult for future generations. our government and media have a conflict of interest in that they're landlords and hedge fund managers and they also have a personal interest in continuing to profit from our housing crisis.

Personally I don't believe that you should ever 'own' a property, and I believe in a 100% inheritance tax, why should some babies be at a significant advantage compared to others just because your parents were fortuitous? I don't think rich people work harder or more deserving of their wealth than others, but these takes are probably a bit too spicy for this forum.

 

[GBJ]

The rental trap is real and it's becoming even worse.

Yep, the renting trap is a very dangerous one, especially considering the price will never come down, it’ll only ever go up.

An extended family member of mine rents and has done for the last 30-odd years. He’s 64 this year and worked on building sites all his adult life.

He’s now struggling in that game, both physically and mentally, but as he’s a long term renter, he knows if he doesn’t carry on working, well, we all know what the alternative is.

 

[hlane17]

1. the point i'm making is that people don't really want the housing supply to increase. they don't want estates built in the fields behind their house. they believe there'll be a strain on local infrastructure, they worry it'll impact their house value because they're relying on that due to a poor pension. you see it every time a housing development is proposed, they'd rather make it more difficult for future generations. our government and media have a conflict of interest in that they're landlords and hedge fund managers and they also have a personal interest in continuing to profit from our housing crisis.

2. Personally I don't believe that you should ever 'own' a property, and I believe in a 100% inheritance tax, why should some babies be at a significant advantage compared to others just because your parents were fortuitous? I don't think rich people work harder or more deserving of their wealth than others, but these takes are probably a bit too spicy for this forum.

Point 1 I wholeheartedly agree with and a solution needs to be found. I think it will be found in the everyday people rather than those deciding policy and directing private companies to be honest.

Point 2 not so much, although I can think through the logic you'd follow to come to that decision. You're very much entitled to that opinion as I am to mine. I think if the property market was much fairer, you would have a bit more faith in the inheritance system

 

[hlane17]

Might I add as a general comment it's been a good open-ended discussion on this thread and supportive of one another.

This is SZ at it's best really. Hugely important for us as a club to connect with each other more considering how distant we've been due to the pandemic in the last couple years.