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Old 9th July 2020, 20:06   #21
edwardmk
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Originally Posted by steve-45 View Post
Or house prices just to increase in value at the annual rate of inflation.

The spiraling above inflation prices rises does not do you any good unless you want to sell up and live in a tent.

Example
100K house increases in price by 15% - now worth £115K

But, what I would really like is a £200K house, however that now costs £200K + 15% now equals £230K

So, 1 year ago I was £100K away from my dream house - now I am £115K away !
Agree. The system is set up to reward those who control 'printing' the fiat currency in the central banks. By the time the currency units (pounds, euros, dollars etc) reaches those at the bottom in the 'main street' economy, they're already depreciated in purchasing power. There is no real money in the vaults of most banks. Real money is gold (J P Morgan). When you apply for a mortgage, the currency is literally 'magicked' into existence on a digital ledger. Henry Ford once said that if the American people truly understood how the Banking System worked there would be riots in the streets. Interesting how Theresa May said to a nurse 'there is no magic money tree' to fund a £1 billion pay rise for the nurses. Yet there is apparently a magic money tree that's already found over 500 billion to combat Covid-19. Now if we had actually joined the Euro and lost the ability to print the pound we'd have been even more royally scr**d by the financial black swan caused by Covid! Britain must never give up our ability to create currency according to the national imperative. Joining the euro would have made us a vassal state with our hands held out in an emergency like Oliver Twist! All modern central banks target 2% inflation, but miss the target regularly on both sides of the equation. This is part of the reason for boom and bust. Inflation hurts the common person. Increases in house prices are largely caused by inflation compounding which harms the first time buyer. The apparent capital gains accruing to the housing market are largely illusory. The value of the houses didn't go up, it was the value of the currency that went down. Rant over

Last edited by edwardmk; 9th July 2020 at 20:15..
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Old 9th July 2020, 21:04   #22
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This thread has turned sour?

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Old 9th July 2020, 22:34   #23
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[QUOTE=macafee2;2823968]This thread has turned sour?

Thats because people are obsessed with asset value .A classic case of "IM ALRIGHT JACK"
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Old 10th July 2020, 06:26   #24
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Agree. The system is set up to reward those who control 'printing' the fiat currency in the central banks. By the time the currency units (pounds, euros, dollars etc) reaches those at the bottom in the 'main street' economy, they're already depreciated in purchasing power. There is no real money in the vaults of most banks. Real money is gold (J P Morgan). When you apply for a mortgage, the currency is literally 'magicked' into existence on a digital ledger. Henry Ford once said that if the American people truly understood how the Banking System worked there would be riots in the streets. Interesting how Theresa May said to a nurse 'there is no magic money tree' to fund a £1 billion pay rise for the nurses. Yet there is apparently a magic money tree that's already found over 500 billion to combat Covid-19. Now if we had actually joined the Euro and lost the ability to print the pound we'd have been even more royally scr**d by the financial black swan caused by Covid! Britain must never give up our ability to create currency according to the national imperative. Joining the euro would have made us a vassal state with our hands held out in an emergency like Oliver Twist! All modern central banks target 2% inflation, but miss the target regularly on both sides of the equation. This is part of the reason for boom and bust. Inflation hurts the common person. Increases in house prices are largely caused by inflation compounding which harms the first time buyer. The apparent capital gains accruing to the housing market are largely illusory. The value of the houses didn't go up, it was the value of the currency that went down. Rant over
This chancellor has certainly found that magic money tree! I dare not now go to the site that shows the national debt in real time.
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Old 10th July 2020, 08:20   #25
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It makes not one iota of difference Ian, it only matters if you plan to move house, and plan to port the mortgage along with the move.

It is unfortunate if you happen then to be trapped in a house you no longer wish to live in, but the perception of the properties worth to yourself doesn't alter because of negative equity.
I believe it to be a price worth paying so our children and their children have a reasonable chance at making a home for themselves.

Brian

There is one difference it makes, whether you can afford to sell or not. Near to the beginning of a mortgage term negative equity often means that selling the house will leave a shortfall in paying off the mortgage, a shortfall that often can't be met. Leaving the 'owner' unable to move until the equity balance is restored. Either by prices going back up or by paying off a larger percentage of the mortgage. (Of course there's always the option of leaving the market and renting, or becoming homeless).
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Old 10th July 2020, 09:18   #26
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There is one difference it makes, whether you can afford to sell or not. Near to the beginning of a mortgage term negative equity often means that selling the house will leave a shortfall in paying off the mortgage, a shortfall that often can't be met. Leaving the 'owner' unable to move until the equity balance is restored. Either by prices going back up or by paying off a larger percentage of the mortgage. (Of course there's always the option of leaving the market and renting, or becoming homeless).
It's fairly simple, if you can't afford to move, then don't, if you can't afford to buy, then don't, and when considering the single most important purchase in life, choose carefully and don't rush.

Property prices are artificially inflated above the norm by greedy speculators, often overseas absentees, private landlords, and greedy estate agents.

This is coupled with the scandalous "right to buy" meaning social housing stocks are dwindling to a point where people not in a position to buy their own home for whatever reason, are forced down the road of private rental property.

My house if marketed today would in all likelihood sell at around 200k, four times what I paid for it 25 years ago, and 3000% more than the house cost new 48 years ago.

£6500 in real life inflation terms from 1972 as opposed to 2020 is £86000, so why the disparity?

When asked by people what is your house worth? I always answer as to the price I paid, simply put I couldn't care less how much the house is worth, it is my family home and not an investment vehicle.

Brian
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Old 11th July 2020, 09:29   #27
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.


As I said earlier - the Great God Greed rules.
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