Cost of living squeeze in 2022

[stongle]

brickwall said:

xeny said:

stongle said:

Property value tax won't work. Although I understand why anyone outside the SE thinks its a great idea.

I'm in the SE, and intrigued why it wouldn't work.

General argument is that there’s lots of (generally older) people in the SE who, thanks to historic growth, own houses worth many times their annual income…and thus could never afford a tax of (say) 1.5% of property value.

My view is that might make it a vote-killer, but doesn’t mean a tax wouldn’t work.
Individuals who can’t afford the property tax should sell up and move somewhere cheaper, just as if they couldn’t afford the heating.

No. It doesnt work, because:

a. Houses are a store of value
b. Its not a liquid market and real estate is not immediately cash convertible
c. The UK is not a closed economy
d. Credit supply is infinite

Even if the BoE and other CBs taper, or increase rates doesn't mean credit evaporates. It just chases higher returns.

The old lady living in fuel poverty alone is the exception NOT the rule. And whilst that is wrong and sad, she's an edge case on the far larger number who are getting rodded by st poor government policies.

Put really, really simply. The govt sets the BoE mandate. It says X,Y metric has to be in Z bound. If Metric X moon's, then the BoE has to take action. The govt has passed the buck. BUT, if metric X moon's and the govt sit back and do fk All (ala Rishi), the BoE still has to act. The BoE is acting to rule and mandate. Some think, it's up to Boris and parliament to set this straight. Except they appointed someone called a "chancellor".

Rishi owns explaining the legacy of where we are, and getting out of it (he can't because he's really only good for getting the coffee's in).

[survivalist]

stongle said:

brickwall said:

xeny said:

stongle said:

Property value tax won't work. Although I understand why anyone outside the SE thinks its a great idea.

I'm in the SE, and intrigued why it wouldn't work.

General argument is that there’s lots of (generally older) people in the SE who, thanks to historic growth, own houses worth many times their annual income…and thus could never afford a tax of (say) 1.5% of property value.

My view is that might make it a vote-killer, but doesn’t mean a tax wouldn’t work.
Individuals who can’t afford the property tax should sell up and move somewhere cheaper, just as if they couldn’t afford the heating.

No. It doesnt work, because:

a. Houses are a store of value
b. Its not a liquid market and real estate is not immediately cash convertible
c. The UK is not a closed economy
d. Credit supply is infinite

Even if the BoE and other CBs taper, or increase rates doesn't mean credit evaporates. It just chases higher returns.

The old lady living in fuel poverty alone is the exception NOT the rule. And whilst that is wrong and sad, she's an edge case on the far larger number who are getting rodded by st poor government policies.

Put really, really simply. The govt sets the BoE mandate. It says X,Y metric has to be in Z bound. If Metric X moon's, then the BoE has to take action. The govt has passed the buck. BUT, if metric X moon's and the govt sit back and do fk All (ala Rishi), the BoE still has to act. The BoE is acting to rule and mandate. Some think, it's up to Boris and parliament to set this straight. Except they appointed someone called a "chancellor".

Rishi owns explaining the legacy of where we are, and getting out of it (he can't because he's really only good for getting the coffee's in).

Why would Rishi want to get out of it? The current scenario is working just fine for him and a big chunk of the electorate.

Unless everyone else bands together and votes the concervatives out, but that’s not likely as it’s pretty clear that Labour and the Lib Dems couldn’t deliver an Amazon parcel, never mind a decent political alternative.

[tannhauser]

bhstewie said:

tannhauser said:

bhstewie said:

tannhauser said:

Because the current status quo is unsustainable and it needs to stop sooner rather than later.

And never mind the poor sods that get caught up in it?

Yes, never mind.

That's proper messed up.

Takes all sorts though.

How is it? I certainly don't care about those who've lacked sense and prudence. At least I'm honest.

What about all the people suffering because of 20 years of recklessness and lax lending?

What about those frozen out of the housing market? What about those in their early 20s just starting out?

[bitchstewie]

tannhauser said:

How is it? I certainly don't care about those who've lacked sense and prudence. At least I'm honest.

What about all the people suffering because of 20 years of recklessness and lax lending?

What about those frozen out of the housing market? What about those in their early 20s just starting out?

It depends whether you think there's a way of inflicting whatever this weird financial armageddon you're wishing for only on "those who've lacked sense and prudence".

I don't think it's possible to be quite so specific about who would be impacted.

Fair enough if you've got fk all you've got nothing to lose but there would be a hell of a lot of people who are just about managing who would caught up in whatever it is you want to happen too.

[Murph7355]

tannhauser said:

Indeed. There's lots to be said for it. Covered many times before in other threads, so I'll leave it there!

Not enough to stop you being a miserable fecker on these threads though....

[survivalist]

tannhauser said:

What about those frozen out of the housing market? What about those in their early 20s just starting out?

The vast majority of people in these situations will be worse off if we go into a recession.

They might have a few more keeping them company l, but I believe that’s usually cold comfort when you're still worse off than a couple of years ago.

[Deep Thought]

tannhauser said:

Deep Thought said:

tannhauser said:

Because the current status quo is unsustainable and it needs to stop sooner rather than later.

It won't stop. Accept that and find a better plan to buy your dream home than the collapse of the economy

You sound so sure. I'm happy where I live thanks.

Yes, you sound very happy with your lot in life

[tannhauser]

Deep Thought said:

tannhauser said:

Deep Thought said:

tannhauser said:

Because the current status quo is unsustainable and it needs to stop sooner rather than later.

It won't stop. Accept that and find a better plan to buy your dream home than the collapse of the economy

You sound so sure. I'm happy where I live thanks.

Yes, you sound very happy with your lot in life

I'm not actually, but that's not why I'm here.

[tannhauser]

survivalist said:

tannhauser said:

What about those frozen out of the housing market? What about those in their early 20s just starting out?

The vast majority of people in these situations will be worse off if we go into a recession.

They might have a few more keeping them company l, but I believe that’s usually cold comfort when you're still worse off than a couple of years ago.

Well at least a roof over their heads might be more affordable. Swings and roundabouts.

[tannhauser]

Murph7355 said:

tannhauser said:

Indeed. There's lots to be said for it. Covered many times before in other threads, so I'll leave it there!

Not enough to stop you being a miserable fecker on these threads though....

Well it's a pretty miserable topic, don't you think? Is the reality of what's coming too difficult to take?

[Sway]

tannhauser said:

How is it? I certainly don't care about those who've lacked sense and prudence. At least I'm honest.

What about all the people suffering because of 20 years of recklessness and lax lending?

What about those frozen out of the housing market? What about those in their early 20s just starting out?

Far fewer have 'suffered' in the last 20 years, than would suffer if what you wanted came to pass.

The majority are owner occupiers, and relatively few are truly 'frozen out' of the housing market.

That's all irrelevant though, as those people will be just as effected if not more so if what you're dreaming of happens. Especially 'those in their early 20s just starting out'.

It's not imprudent to have mortgaged to buy your own home on the basis of BoE set stress tests, that you're calling to be exceeded massively. When those homes get repossessed, it's not lads in their 20s that are going to be buying them in the firesale - the exact opposite.

[Ntv]

Although we hear of many attempts to deflect the entirety (or most ) of the cause of the problems to Russia / Ukraine ... it is striking indeed how few of those who backed the "NPIs" for COVID are sticking their heads up to admit their ideas to (as they see it) extend some lives of the elderly has come at a quite staggering cost.

Indeed a cost, that with a sad irony, means many lives of the elderly will be "abbreviated".

[tannhauser]

Sway said:

tannhauser said:

How is it? I certainly don't care about those who've lacked sense and prudence. At least I'm honest.

What about all the people suffering because of 20 years of recklessness and lax lending?

What about those frozen out of the housing market? What about those in their early 20s just starting out?

Far fewer have 'suffered' in the last 20 years, than would suffer if what you wanted came to pass.

The majority are owner occupiers, and relatively few are truly 'frozen out' of the housing market.

That's all irrelevant though, as those people will be just as effected if not more so if what you're dreaming of happens. Especially 'those in their early 20s just starting out'.

It's not imprudent to have mortgaged to buy your own home on the basis of BoE set stress tests, that you're calling to be exceeded massively. When those homes get repossessed, it's not lads in their 20s that are going to be buying them in the firesale - the exact opposite.

Affected.

If property prices return to sensible levels, and people lose out, then they have overpaid and/or overextended.

Imprudence is borrowing many multiples of one's salary, with small (if any) deposit believing that the crazy low interest rates of the last 10+ years are here to stay forever. That, and interest only mortgages. For these people, I have very little (if any) sympathy. They've fuelled the fire.

[survivalist]

tannhauser said:

survivalist said:

tannhauser said:

What about those frozen out of the housing market? What about those in their early 20s just starting out?

The vast majority of people in these situations will be worse off if we go into a recession.

They might have a few more keeping them company l, but I believe that’s usually cold comfort when you're still worse off than a couple of years ago.

Well at least a roof over their heads might be more affordable. Swings and roundabouts.

It won’t be though, the idea that housing will become cheaper as the cost of living increases is fanciful.

Even is house prices do reduce, the cost entry (a deposit) and monthly payments will increase.

In a house price crash the main beneficiaries will be the investors and those who are already on the ladder with a decent amount of equity (the move up the ladder ‘might’ be less costly)

[stongle]

survivalist said:

Why would Rishi want to get out of it? The current scenario is working just fine for him and a big chunk of the electorate.

He's useless

As for the "big chunk of the electorate", did the Tories get in on an avarice and useless ticket; or did the Red Wall (and rest of UK) vote for a manifesto with deliverables in it?

And that "big chunk", might soon be a small chunk. Just a few powerfully built directors and their botox'd clunge seem to be the new Tory target.

[Shnozz]

survivalist said:

It won’t be though, the idea that housing will become cheaper as the cost of living increases is fanciful.

Even is house prices do reduce, the cost entry (a deposit) and monthly payments will increase.

In a house price crash the main beneficiaries will be the investors and those who are already on the ladder with a decent amount of equity (the move up the ladder ‘might’ be less costly)

Exactly. And then watch these be rented back to the 20 somethings that tannheuser is hoping to see benefit.

[tannhauser]

Shnozz said:

survivalist said:

It won’t be though, the idea that housing will become cheaper as the cost of living increases is fanciful.

Even is house prices do reduce, the cost entry (a deposit) and monthly payments will increase.

In a house price crash the main beneficiaries will be the investors and those who are already on the ladder with a decent amount of equity (the move up the ladder ‘might’ be less costly)

Exactly. And then watch these be rented back to the 20 somethings that tannheuser is hoping to see benefit.

Bullst. Higher deposit and higher monthly payments will put downward pressure on prices.

[Randy Winkman]

Shnozz said:

survivalist said:

It won’t be though, the idea that housing will become cheaper as the cost of living increases is fanciful.

Even is house prices do reduce, the cost entry (a deposit) and monthly payments will increase.

In a house price crash the main beneficiaries will be the investors and those who are already on the ladder with a decent amount of equity (the move up the ladder ‘might’ be less costly)

Exactly. And then watch these be rented back to the 20 somethings that tannheuser is hoping to see benefit.

Sadly, the people that lose out will be the young ones whose parents/grand parents don't own homes. The exact opposite of what we want to motivate young people.

[Shnozz]

tannhauser said:

Shnozz said:

survivalist said:

It won’t be though, the idea that housing will become cheaper as the cost of living increases is fanciful.

Even is house prices do reduce, the cost entry (a deposit) and monthly payments will increase.

In a house price crash the main beneficiaries will be the investors and those who are already on the ladder with a decent amount of equity (the move up the ladder ‘might’ be less costly)

Exactly. And then watch these be rented back to the 20 somethings that tannheuser is hoping to see benefit.

Bullst. Higher deposit and higher monthly payments will put downward pressure on prices.

Higher deposits and increased interest rates won’t benefit first time buyers, even with a fall in overall cost. It would, however, benefit cash buyers and investors who want to increase their portfolio.

[Sway]

tannhauser said:

Sway said:

tannhauser said:

How is it? I certainly don't care about those who've lacked sense and prudence. At least I'm honest.

What about all the people suffering because of 20 years of recklessness and lax lending?

What about those frozen out of the housing market? What about those in their early 20s just starting out?

Far fewer have 'suffered' in the last 20 years, than would suffer if what you wanted came to pass.

The majority are owner occupiers, and relatively few are truly 'frozen out' of the housing market.

That's all irrelevant though, as those people will be just as effected if not more so if what you're dreaming of happens. Especially 'those in their early 20s just starting out'.

It's not imprudent to have mortgaged to buy your own home on the basis of BoE set stress tests, that you're calling to be exceeded massively. When those homes get repossessed, it's not lads in their 20s that are going to be buying them in the firesale - the exact opposite.

Affected.

If property prices return to sensible levels, and people lose out, then they have overpaid and/or overextended.

Imprudence is borrowing many multiples of one's salary, with small (if any) deposit believing that the crazy low interest rates of the last 10+ years are here to stay forever. That, and interest only mortgages. For these people, I have very little (if any) sympathy. They've fuelled the fire.

Thank you, I always get those to confused.

I'm not talking about low LTV. That's irrelevant. I'm talking about people who have borrowed, against much tighter lending criteria - and using the BoE's own stress test for affordability.

It doesn't matter what LTV they've got, if that increase above the stress test means they cannot afford their mortgage. They lose the lot regardless.

So yes, property prices fall - but stress tests and lending criteria tighten even more. In the scenario you're putting forward, the default outcome is far higher unemployment and lower spending power. Except for those who are already significantly rich - so they'll be hoovering up those properties.

Increasing the renting percentage. Might even become a majority, unlike today.

There is no scenario where your posited 'won't someone think of the children' act come out winning, if what you are calling for comes to pass.

Let me put it clearly.

I'm at 25% LTV. My mortgage is a lower multiple of salary than was the norm back in the days you're harkening back for.

Yet, if interest rates rise above 3% - guess what? I'm cutting every single bit of discretionary spend to pay that mortgage. If necessary, I move to an interest only in the medium term.

I'm probably in the top ten percent 'most prudent' mortgage holders.

You're like a character from game of thrones. Happy to watch the world burn if it means you can be king of the ashes. That character didn't last long...

Remember - it's the majority who are in that position. Why on earth do you hate them so much? What have they done to you for you to want them to suffer?