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sunnybob

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I was born in a victorian workmans terrace house in south London.
3 beds, no garden, scullery for washing in, outside toilet. (think worse than coronation street).
In 1958 dad was offered the house for 500 quid because the street of 52 houses were on the condemned list. dad refused because as he said "if i buy it I have to do the maintenance myself".
A few years later the street was taken off the condemned list because the total area wasnt big enough to build a block of flats on.
After dad died mum became a protected tenant untill she couldnt live there any more and was moved to sheltered accommodation.

That house has just sold for £900,000 :shock: :shock: My old bedroom is now an ensuite and they've put another bedroom in the loft. I hope they fitted new joists, because they were all shaken loose in the war when the street next door got wiped out.
 

Phil Pascoe

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My grandfather was offered a detached house for £90 in 1952. He turned it down saying anyone would be mad to buy it as it had a belly in the end wall. (He was a mason.) It's still there, the belly exactly the same.
 

Trainee neophyte

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This shows the depreciation of the Pound more than the value of the house. It's the same house (with fewer bedrooms but indoor plumbing), but is fundamentally the same sort of housing.

According to the bank of England's inflation calculator (lying thieves), £900,000 in 2018 is the equivalent to £31,800 in 1952. And yet, the house could be bought for £90, in the real world. Even if that was an insanely cheap price, it wasn't £31,710 too low - probably half-price at best. A really good example of how financial engineering has enriched a tiny few, and impoverished just about everyone else. You now pay 300 times more for a London house in real terms, than in 1952. In real terms. The banks are getting good value for money, but are the people?

Edit: I got my maths wrong, and initially posted 3,000 times more, but it is only 300. Only.
 

Blackswanwood

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I think you have mixed two posts up here ... we don’t know the current value of the house in the second example?

I don’t see how this is an example of financial engineering enriching a tiny few and impoverishing just about everyone else. The baby boomer generation has done very nicely out of increased property values.

Property values have been driven by supply and demand. Summarising something that is very complicated demand has arguably been driven by political policy creating a culture where home ownership is the expectation.
 

Rorschach

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Trainee neophyte":u1hrkabw said:
This shows the depreciation of the Pound more than the value of the house. It's the same house (with fewer bedrooms but indoor plumbing), but is fundamentally the same sort of housing.
In London is the value of the land rather than the value of the house. All house prices are inflated because we made the mistake of seeing houses as an investment rather than simply somewhere to live. Now we are in it we are stuck.
A house should only be worth what you paid for it, you shouldn't expect it to increase in value at a rate greater than inflation, that is unsustainable and it is really starting to show now. Pensioners who can't afford to sell up and young people who can't afford to buy.

When my parents bought their house it was approx 4x the salary of my mother at the time, earning a pretty average salary for the day. My mum was 21 when they moved in. A 21 year old today couldn't dream of buying a house.
Using the inflation calculator though the house it would be worth about 4x a current salary, in the real world though it is valued at 4x that amount. That is unsustainable.
 

Keith 66

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Interesting, In 1958 my parent bought a detached house a quarter mile from where i live today, It cost them £3500, According to the calculator £57,171 in todays money. They sold it in 91 for £190,000 & moved oop north buying a place with half an acre of land for £80,000. Within 3 years their old place had been sold as a building plot for £440,000 bulldozed & a new place built. Today its market value is north of 850k.
I just inherited their house in lancashire & although its worth nowhere near southern essex prices it still effectively means i can retire in a couple of months.
Happy days, Mum & Dad did alright.

But only yesterday I picked up & used Dads favorite chisel, still feels like i should ask him if its ok to use it!
 

sammy.se

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As someone who grew up and lives in London, I can confidently say that demand is a big part of the house prices. There are more and more people every year, with limited space. Tubes are packed. Schools are packed. Roads are packed. It's very real. All those people (and landlords) competing for space, drives the prices up.

Areas in greater London are now having apartment buildings built on any square inch possible.

So, demand is probably the number 1 factor in house price increases, in addition to any other financial variables/manipulation you mention.

Sent from my SM-G973F using Tapatalk
 

Nigel Burden

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sunnybob":1fzp24si said:
I was born in a victorian workmans terrace house in south London.
3 beds, no garden, scullery for washing in, outside toilet. (think worse than coronation street).
In 1958 dad was offered the house for 500 quid because the street of 52 houses were on the condemned list. dad refused because as he said "if i buy it I have to do the maintenance myself".
A few years later the street was taken off the condemned list because the total area wasnt big enough to build a block of flats on.
After dad died mum became a protected tenant untill she couldnt live there any more and was moved to sheltered accommodation.

Sounds just like my dad.

I can't remember what he paid for our old house when he eventually bought it from the landlord in 1974, but when I was borne in 1951 the house had no running water, no electricity, and no gas. It was a three bed semi with a well at the end of the garden and an outside bucket toilet, so it probably would have been peanuts then. It was modernised when he bought it with financial help from my brother.

When he died in 1984 the house had to be sold to pay for mothers nursing home fees, it fetched £35000. It has since been modernised again and was on the market for £575000 a couple of years ago.

Talking of property prices in relation to salary. I read a while back that in London, the price of the average property was nine times the average salary for the area. In S E Dorset, it was fifteen times. That is probably true, as average salaries in this area are nearer to £20 K than the claimed national average of £26 K.

Nigel.

When he died in1984 the house

That house has just sold for £900,000 :shock: :shock: My old bedroom is now an ensuite and they've put another bedroom in the loft. I hope they fitted new joists, because they were all shaken loose in the war when the street next door got wiped out.
 

Jacob

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Trainee neophyte":37ekmu6s said:
...... The banks are getting good value for money, but are the people?.....
Some are but most are not and it's getting worse.
It's redistribution of wealth upwards. The only civilised way to reverse it is by progressively increasing taxation and having a state house building policy. Government responsibility, more than the banks. Controlling the banks is govt responsibility too.
 

Trainee neophyte

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I was going to post more, but it suddenly seemed disturbingly reminiscent of the thread that should never be named, so I won't.

A hundred years ago, people spent roughly 10% of their income on housing, and 50% on food. Now it is the other way around. It still means you get to keep very little of the fruits of your labour, but the modern way keeps the banking system spinning nicely. Fingers crossed it will all turn out ok.
 

Jacob

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Trainee neophyte":2tt94vy3 said:
I was going to post more, but it suddenly seemed disturbingly reminiscent of the thread that should never be named, so I won't.
You are not alone. A lot of people would rather keep their heads under the blankets, ignore the real world and hope that things will turn out OK :lol:
In fact in many areas there is prohibition on even talking about things, in case it disturbs the tranquility.
A hundred years ago, people spent roughly 10% of their income on housing, and 50% on food. Now it is the other way around. It still means you get to keep very little of the fruits of your labour, but the modern way keeps the banking system spinning nicely. Fingers crossed it will all turn out ok.
Need to do more than cross fingers!
 

doctor Bob

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I'll give this thread another page before Jacob makes out he's put someone on ignore and states Labour need to move further left.
 

Phil Pascoe

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Keith 66":16r65srw said:
Interesting, In 1958 my parent bought a detached house a quarter mile from where i live today, It cost them £3500 ...
In 1958 my father was building and selling detached bungalows for £999. :D
 

Trainee neophyte

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Jacob":2rqlwoft said:
Trainee neophyte":2rqlwoft said:
I was going to post more, but it suddenly seemed disturbingly reminiscent of the thread that should never be named, so I won't.
You are not alone, A lot of people would rather keep their heads under the blankets and ignore the real world
A hundred years ago, people spent roughly 10% of their income on housing, and 50% on food. Now it is the other way around. It still means you get to keep very little of the fruits of your labour, but the modern way keeps the banking system spinning nicely. Fingers crossed it will all turn out ok.
Need to do more than cross fingers!
You must know my views by now, i.e. we're all doomed. It's a lovely Sunday morning, and we have guests arriving for roast lamb &tc, and I think treacle pud (they are Greek, but huge anglophiles), so we are having a cultural exchange, rather than them insisting on eating only Greek food, cold. Too nice a day for economic misery. I shall now go outside and enjoy the flowers, and fret because I am not allowed in the workshop.
 

Rorschach

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Keith 66":3uvc23z6 said:
I just inherited their house in lancashire & although its worth nowhere near southern essex prices it still effectively means i can retire in a couple of months.
Happy days, Mum & Dad did alright.
Yep good for you, it didn't help them though and it won't help the next generation either. Boomers are pretty much the only beneficiary of this system, it kept their parents and their children poor.

sammy.se":3uvc23z6 said:
So, demand is probably the number 1 factor in house price increases, in addition to any other financial variables/manipulation you mention.
That demand is artificially created though. Houses are purposely not built in order to keep demand high and prices high. There is no need for it, it's purely to make money for boomers.
 

lurker

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My parents and parents in law were just young enough not to serve overseas in the war.
They all worked hard and were possibility the first generation of real working class folks to buy their own homes.
When we bought our home although they were there for us they could not help us with the housing ladder that was all our own graft.
My parents had a good retirement and left me enough for me to pay the deposit on both my sons homes....... That was truely satisfying but only thanks to mum and dads careful lifestyle.
 

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RogerS":3h9k15wm said:
Rorschach":3h9k15wm said:
.. it kept their parents ....poor.

.....
How so ?
People of that generation, in my case it is my grandparents or maybe just my parents generation benefited enough that they could afford to buy their own house and live a comfortable but frugal life. Their pensions allowed them a frugal, short retirement and the wealth accumulated in their property. They cannot afford to move since selling the property would only get enough money to buy something similar at best, they could not afford to renovate or improve that property very much. They contribute to the state and take out very little. When they die though that property passes to their children, already having independent wealth making them rich, they studied for free, their pensions are good, too good and they live a long retirement with many benefits from the state including tv licence, fuel allowance, bus passes, triple lock state pension as well as final salary pensions. They contribute to the state but take out much more than they paid in. Their children cannot afford to get onto the property ladder, have low wages, student loans, high taxation. If they are lucky they might be able to get onto the property ladder before they are 40. Their best chance at a comfortable home is their parents dying young but more likely their parents will get dementia and the wealth accumulated in their home will be taken by the state when they die. Their pensions are poor, their retirement will be short, a state pension probably non-existent.
 

Jacob

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Rorschach":1q9c2jzn said:
......, they studied for free, their pensions are good, too good and they live a long retirement with many benefits from the state including tv licence, fuel allowance, bus passes, triple lock state pension as well as final salary pensions. They contribute to the state but take out much more than they paid in.
Even if that was true (it is for some but certainly not for everybody) it's quite easy to remedy by taking it back in tax. The obvious candidate being death duties and tax on development price inflation. This is not a radical new idea; Georgism https://en.wikipedia.org/wiki/Georgism is one of many manifestations idea, and interestingly was what the board game Monopoly was designed to explain. It still does!
Their children cannot afford to get onto the property ladder, have low wages, student loans, high taxation.
Taxation currently in the UK is historically very low, but yes other things are not too good. One thing has been the shift from income or wealth tax to direct taxes: VAT, council tax etc. These disadvantage the less well off.
If they are lucky they might be able to get onto the property ladder before they are 40. Their best chance at a comfortable home is their parents dying young but more likely their parents will get dementia and the wealth accumulated in their home will be taken by the state when they die. Their pensions are poor, their retirement will be short, a state pension probably non-existent.
 
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