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Discussion Starter · #1 · (Edited)
I own a house which is now worth £525,000 but i was looking at the Building insurance today and for Insurance purposes the house is valued at £74,000 so i called the Insurance company and asked for an explanation. They told me that if the house was completely destroyed they estimate it could be completely rebuilt for about £74,000

SO THIS BEGS THE QUESTION WHY WOULD ANYBODY PAY £525,000 FOR SOMETHING THAT CAN BE BUILT FOR £74,000?

I then phoned an Estate Agent who told me that Agricultural land sells for approximatly £3000 to £10000 per acre but with Planning Permission this same land would be worth £300,000 to £600,000 per acre.

So we all pay huge interest payments to the bankers for something that is deliberatly artificially overvalued by restricting the right to build. I.e DELIBERATE RESTRICTION OF SUPPLY THAT DOES NOT MEET THE DEMAND = Artificially high prices

Instead of paying the greedy bankers most of our wages in "tribute" would it not be a far better and fairer system if we allowed far more building to meet the obvious demand? plenty of land available, and we would give our children a fair start and chance in life JUST LIKE WE ALL HAD. As we have now saved huge interest payments becuase we no longer have vastly overinflated houses could we not now spend that same "saved" money in the REAL ECONOMY that would cause more jobs and real economic growth? rather than excess profits for greedy worthless bankers in the City Of London?

It is the obvious restriction of supply allied to massive overproduction of credit that has driven the outrageous property bubble. The land is virtually worthless withoutv the all important BUILDING PERMISSION The Bankers stupid solution is to offer 40 year mortgages, or mortgages to a "group" of people to buy a house. That is like having a huge out of control fire and proposing to spray petrol onto it. THE CREDIT CAUSED THE PROBLEM IN THE FIRST PLACE AND THEY PROPOSE MORE CREDIT OVER A LONGER PERIOD OF TIME !!!!!!

We would rather have agricultural SET ASIDE land than provide decent affordable housing to our own children.
 

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Exactly why I don't own any property in this country. Just can't bring myself to do it.

There are some really great things about Britain but the housing situation isn't one of them. What a mess.:banghead:
 

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Discussion Starter · #3 ·
Geo

I agree with you completely, most of the other stuff is OK? although i notice the roads really seem to be falling apart now and quickly potholes and damage everywhere

The housing situation is a complete farce, now wonder the kids seem pissed off and disinterested, Work hard and look forward to £20,000 of STUDENT LOANS - Which we did not have!!!! and a Massive Mortgage at 8 to 10 times earnings over the next 25 years or more probably 40 years. I like all the others had a mortgage at 3 to 3.5 times earnings and we got MIRAS tax relief on that !!!!!!!

When i hear my generation and older going on about the young people of today it makes my blood boil, half of them have done nothing apart from sit in a house that has radically increased in value they are COMPLETELY CLUELESS OF REALITY for the youngsters today.

Another thing in found out MORTGAGE actually means MORT = DEATH and GAGE = LOAN. How true, how very true !!!!!!
 

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It`s a terrible predicament.

















I simply cannot decide how I`ll spend the £ 200,000 positive equity I`ve got on my house should I decide to 'up sticks'....... :mrgreen: :mrgreen:
 

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The re-building costs are actually about on the money at £74000.

The building costs have no bearing on the market value which is determined by location and demand.
 

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whys the rum always gone?
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feck my head hurts after reading that:D
 

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Instead of paying the greedy bankers most of our wages in "tribute" would it not be a far better
Never mind that, if you stop paying banks, they stop employing me and then I'd need to find a real job. Keep paying your mortagages people... it keeps my kids in food, and enables me to keep my cheap bank mortage rate. Cough.. 4.00% Cough :) But OK the feckers tax me on it so its not good any more.
I can also do a nice line in 120 year mortgages offering 10 times your salary. :D:D:D
 

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Discussion Starter · #8 ·
So Wee

If we issued more building permissions my house would fall to its fair value or intrinsic value which is circa £74,000.

So not only could my children afford a nice 1st time buyers flat at say £25,000 instead of today £200,000 and if i ever wanted to move to a bigger house it is going to cost me say £100,000.

My children would pay a mortgage at say 6% on £25,000 which equals £125 a month instead of £200,000 at 6% which equals £1000 per month. The diference saved of £875 per month could be SPENT IN THE REAL ECONOMY and not used to pay the outrageous bonus for some City Banker.

We have laws in place to stop our children from having to work down the mines, but we have no laws in place to stop bankers forcing them into bonded debt slavery to buy a vastly overpriced basic human right HOUSING it is plain old USURY pure and simple.

SOLUTION: Add lots more supply to meet the demand and cut back the credit, maximum of 3 to 3.5 times earnings on one salary, income to be verified, no exotic "teaser"mortgages, and predatory lending £1 million mandatory fine for every offence proved. It is very simple
 

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Never mind that, if you stop paying banks, they stop employing me and then I'd need to find a real job. Keep paying your mortagages people... it keeps my kids in food, and enables me to keep my cheap bank mortage rate. Cough.. 4.00% Cough :) But OK the feckers tax me on it so its not good any more.
I can also do a nice line in 120 year mortgages offering 10 times your salary. :D:D:D

Can that be doubled for a joint mortgage? .........

Can it be transfered to my Geneva account? ...... LIKE..... NOW
 

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although i notice the roads really seem to be falling apart now and quickly potholes and damage everywhere
I'm totally with you on this, the roads are terrible at the moment.
We have several large potholes locally and the council just comes round and fills them in with a bucket of tarmac. A week later it's another big hole...what a joke and waste of our taxes!
 

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...Add lots more supply to meet the demand...
This is the interesting point you've made. The demand is driven on two fronts; increasing population, and decreasing household sizes. If these two factors continue then it doesn't matter how many houses are built, eventually demand will outstrip supply and prices will rise.

Personally I don't want to see our island completely covered in houses. I like the green bits of the country. But there is scope to build a few more houses without destroying the countryside. I think green belts are a good idea, and I'd like to see more redevelopment of brownfield sites. Unfortunately it's more expensive to clean up an old industrial site than to build on virgin fields. But looking at the bigger picture I would prefer to spend the extra (which actually gets ploughed back into the economy, so the money isn't really lost) and cap the relentless urbanisation of our island.
 
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Oi Shep, reel your neck in will you!!:mad:
I've worked and suffered to get my property to it's present value. I consider it an investment in my future and I've ploughed time, money and effort into it. The value of it is set by the market place and if you flood that market with cheep alternatives then the past 20 years of my effort gets washed down the drain:mad: Also I don't want to live in a country covered with houses and there speed restricted roads. Sorry kids can't buy a house, but who said its there right to anyway??? Most Europeans rent their property and get on OK. Your bleating on about your kids affording a house like God ordained them to have one. Youth are only demoralized by their predicament because their goals are unacheivable and unrealistic. Live in the World placed before you, not one you think you should have! Market forces my friend, something that provides for you very nicely from how you tell us you earn your living. A balance will be struck because thats how markets work.

And while you've got me in the mood. Student loans. Bloody marvelous:D Why the hell should my tax money go and fund some work shy yoof while he studies 'Chips and their effect on migrating earth worms' or some other useless degree in underwear manufacture or playstation techniques. You want to go to college and get a degree so you can earn above average wages.... well bloody well pay for it you scrounging loafer!!!

Bottom line this is the world we've got. I didn't set the rules, but I damn well play by them! I've done so all my adult life. Never claimed dole, always worked for everything I've got and paid my way. I don't expect some politician to give me handouts or the state to ease my way. I'll stand tall, keep my gob shut and get on with the game according to the rules that day. Now please do the same or find a country more suited to your needs!
 

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Discussion Starter · #13 ·
I consider it an investment in my future and I've ploughed time, money and effort into it. The value of it is set by the market place and if you flood that market with cheep alternatives then the past 20 years of my effort gets washed down the drain:mad: Also I don't want to live in a country covered with houses and there speed restricted roads. Sorry kids can't buy a house, but who said its there right to anyway???
What a total hypocrite. nice to see you have your "investment" and no "cheap alternatives" allowed otherwise all the free money you have had gets washed down the drain. and sorry kids but basically go FU*K yourselves.

Unbelievably selfish self centred attitude. My house has also exploded in value about £6000 a month for the last 4 to 5 years, did i deserve this NO WAY do my kids deserve a crap future becuase of our generations pathetic self centred i am allright jack attitude? again simple answer NO WAY.

Get real will you, it is not market forces you really show your complete ignorance by trotting out such a predictable dogmatic answer it is simply a case of TOO MUCH CREDIT meeting FAR TOO FEW HOUSES. So cut back on the credit, build more houses and watch the value of your "investment" and mine sink back to its fair value. You deserve what you work for and NOT FREE MONEY FROM YOUR HOUSE AT THE OBVIOUS EXPENSE OF YOUR OWN CHILDREN
 

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iswolley has -as usual - hit the nail on the head. I don't understand why anyone thinks there are too few houses. The average occupancy rate today must be at an all-time low? May houses are occupied by just one or two people, and few houses have someone sleeping in every room. When I was born it was common for young couples to live with parents for a few years, even after their first child was born. Indeed my father eventually built (not bought, built) a caravan so he, Mum and my sister could live away from the parents; I was born there and lived in the caravan for my first 18 months. (Trailer park trash? That's me!)

So back to market forces: If homes are "too expensive" what is the right price? There are far more homes in the UK now than ever before, and still people bleat. Many young adults expect to have a place of their own by their early twnties. Every young couple expects to be able to move into their own home immediately. Couples regrettably get divorced and end up living in separate homes. If homes were "too expensive" people couldn't afford to do this. So who says whether a home is too expensive? £50k? £30k? Free with a packet of Corn Flakes? A big packet or one of those little ones?

Never in history and nowhere else in the world has significantly lower occupation rates, so how much more land do we need to cover in concrete and bricks?
 

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Discussion Starter · #15 ·
Dee

The average age of a first time buyer has stretched dramatically up from 26 years of age when i bought a house to 38 years today which wouldc suggest that affordability is a major issue.

What i find strange is that most members of he 40 year+ generations who are the majority the "babyboomers" seem to have the attitude i am alright Jack i have done well out of the property boom, and i do not want any houses built that could spoil my view. They completely fail to realise that the VAST MAJORITY of there nett worth actually came from simple house price inflation and not HARD WORK. It has given most of them a pretty cushy lifestyle denied to there own children. I have worked very hard all my life, but the problems i faced when starting out pale into complete insignificance in relation to what the young of today face

All i suggest is that affordable private housing is a vitally important part of a healthy society. No free lunch, no handouts, just fair affordability for everyone.

It seems that the only way this can be achieved is either reduce the fuel that is providing the speculation fire = CREDIT or introduce more supply. I agree with Mr Wooley that it could and should be done with "sympathy" but it must be done. The Government themselves produced a report not long back that Britain needs 2 million more new homes and very quickly.

I feel that the end game for the property "price" bubble is at best 10 years of going nowhere, or more probably 20% to 30% price falls. That is what happenned in Japan where property has fallen every single year for 17 years now, and is happenning in Australia and now America as i write this post. Every boom is allways met with a bust the size of the bust is allways in direct relation to the proceeding boom and this has been a VERY BIG BOOM.
 

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my house would fall to its fair value or intrinsic value which is circa £74,000.
Shep - I'll gladly solve all of your issues and offer you £74,000 for your house.

I'll obviously sell it at a great profit to a young childless couple from Guildford investing with a 'Buy to Let' mortgage.........personally I don't have any moral issues with this and my shoulders are big enough to carry that much 'free' cash..........:D :D :D :D

I feel that the end game for the property "price" bubble is at best 10 years of going nowhere, or more probably 20% to 30% price falls. That is what happenned in Japan where property has fallen every single year for 17 years now, and is happenning in Australia and now America as i write this post.
Sorry - I don't know about Japan or Australia, but have to disagree regarding America, where across the board, house prices have 'on average' doubled over the past 2 years. I don't know what analysis your pulling your data from, but my experience of spending 50% of my time over there and having seen it with my own eyes, means that your average 'family house' in States ranging from Maine, Florida, Maryland, Kentucky, Oregon, California, Washington DC, Texas, Virginia and Illinois, have definitely at least doubled in price.

Just wanted to stick my oar in - I'll get of my soapbox now :joker:

Squirrelciv - +1 - I'm definitely with you on this one ;)
 

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I want to add fuel to this particular fire - but I cant remember what I was going to say :rolleyes:

although Im glad my house has shot up in money and Im worth an absolute fortune and never had to lift a finger for it .... bit like those financer types, you now the ones, they bung a lot of cash at a gamble, wait for gullible investors to push the price up, then cash in and run away with huge profits, you know, a bit like those that bought well in the property market:tongue1: :D :D :D

But im not gonna say that , cause that'll just cause more ruckuss :tongue1: :tongue1: :tongue1:
 

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Discussion Starter · #18 ·
Alp

You are absoultely right and i take your point completely BUT when a market mnoves any market it works like this.

1 Smart money accumulates a position and the market very gently begins to move upwards

2 Instituition money then enters the market and drives the market up further, and the slope of increase quickens with the sheer weight of instituitional money

3 Finally Dumb money enters the market and the slope goes parabolic becuase they ae simply reacting to the price action and all the "planted" stories that are the so called news about how everyone is a millionaire in the stockmarket, cannot fail get rich in 5 minutes. Smart money now dumps out or "distribuites" to the newly eager Dumb money.

4 The market begins to fall hard, and it allways falls harder and quicker than it rose becuase Fear is a much stronger emotion than Greed. Smart money now SHORTS the market downwards adding to the decline.

5 Instituitional money now exits the markets probably with a very small profit or small loss. They were slow in and sow out.

6 Finally Dumb money panics becuase he has really lost his shirt and bails out.

Guess who he is selling to? Smart Money who is now covering his SHORT position and going LONG so the whole process starts again at stage 1.

Warren Buffett worlds 2nd Richest man

"When everyone is brave BE AFRAID, and when everyone is afraid BE BRAVE"

Lot of people very brave in the housing market, looks to me like we are at stage 3 above. Unfortunatly with a house you cannot bail out very liquid and when it slows the whole market becomes very illiquid.
 

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Getting rich off the inflated value of your house is great, innit? That is, IF you already own a house. For the rest of us, especially those of us on a single salary, getting on the so-called property ladder is one step beyond. By the time I've saved up enough for a decent downpayment I'll be ready to retire. Friends of mine just bought their first house outside Bristol. They're paying £1000/month for a "fixer-upper" just down the road from a sprawling council estate.:confused2:
 
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