Is it really that bad?
Jul 12th 2012, 11:32 pm
#46
Was in Canada, now home.
Joined: Aug 2011
Location: Devon
Posts: 3,388
Re: Is it really that bad?
I'm looking forward to returning to the UK in a couple of years time to retire, but that doesn't blind me to the problems the country has got.
Many of my friends in the UK have young-adult children who are having a lot of difficulty finding work. I went on a residential course when I was in the UK in May; it was undersubscribed and three of the people on the course (out of nine) had recently been made redundant. These were young(ish) professionals, in their thirties or early forties, all highly educated. Young people are suffering, and so are people on benefits, including the disabled.
The other thing I noticed when I was in the UK this year was the increase in social tension. It is many years since I've heard, or overheard, so many racist and xenophobic remarks. I'm concerned about where that may lead in the future.
However, the youth unemployment is not as bad as many of our neighbours in Europe, and the welfare safety net remains superior to North America's.
As far as property is concerned, I think prices are not going to recover quickly, and are likely to fall further, so this is a good time to buy, but there's no harm in waiting either.
I totally disagree with the notion that young people are pressured into buying property against their own self interests, by their peers or their parents. It is just a fact that buying your own home is a good investment, and cheaper than renting in the long term. Young people who aim to buy are just exercising good judgement.
Many of my friends in the UK have young-adult children who are having a lot of difficulty finding work. I went on a residential course when I was in the UK in May; it was undersubscribed and three of the people on the course (out of nine) had recently been made redundant. These were young(ish) professionals, in their thirties or early forties, all highly educated. Young people are suffering, and so are people on benefits, including the disabled.
The other thing I noticed when I was in the UK this year was the increase in social tension. It is many years since I've heard, or overheard, so many racist and xenophobic remarks. I'm concerned about where that may lead in the future.
However, the youth unemployment is not as bad as many of our neighbours in Europe, and the welfare safety net remains superior to North America's.
As far as property is concerned, I think prices are not going to recover quickly, and are likely to fall further, so this is a good time to buy, but there's no harm in waiting either.
I totally disagree with the notion that young people are pressured into buying property against their own self interests, by their peers or their parents. It is just a fact that buying your own home is a good investment, and cheaper than renting in the long term. Young people who aim to buy are just exercising good judgement.
Jul 13th 2012, 6:35 am
#47
Finally Home!
Joined: Mar 2010
Location: Used to be New York, now North Yorkshire
Posts: 3,610
Re: Is it really that bad?
I definitely agree that mortgages are a good investment for some people. But not for everyone and it's the unthinking acceptance of mortgages that I think is a problem. A huge mortgage is always a good investment for the banks, but often not the best use of money for an individual.
If young people were to invest instead in advanced education, or career development, or in traveling, or in starting a business, who knows what financial benefits they and the country would accrue? As opposed to buying a house and sitting on it expecting it to pay for your retirement, which as we've now seen is a mug's game. They certainly do it that way in lots of other countries where far fewer people buy a house and renting is the accepted route to go for most people.
I'm still toying with whether to buy a house soon (because I like being settled not for financial reasons) or invest the money we have in growing our small business. In our case renting is probably the better investment because it allows us to use our limited capital for something else. The minute we buy a house, that's all gone - unless we want an even bigger mortgage.
If young people were to invest instead in advanced education, or career development, or in traveling, or in starting a business, who knows what financial benefits they and the country would accrue? As opposed to buying a house and sitting on it expecting it to pay for your retirement, which as we've now seen is a mug's game. They certainly do it that way in lots of other countries where far fewer people buy a house and renting is the accepted route to go for most people.
I'm still toying with whether to buy a house soon (because I like being settled not for financial reasons) or invest the money we have in growing our small business. In our case renting is probably the better investment because it allows us to use our limited capital for something else. The minute we buy a house, that's all gone - unless we want an even bigger mortgage.
Last edited by sallysimmons; Jul 13th 2012 at 6:45 am.
Jul 13th 2012, 3:32 pm
#48
Forum Regular
Joined: Oct 2011
Posts: 260
Re: Is it really that bad?
I definitely agree that mortgages are a good investment for some people. But not for everyone and it's the unthinking acceptance of mortgages that I think is a problem. A huge mortgage is always a good investment for the banks, but often not the best use of money for an individual.
If young people were to invest instead in advanced education, or career development, or in traveling, or in starting a business, who knows what financial benefits they and the country would accrue? As opposed to buying a house and sitting on it expecting it to pay for your retirement, which as we've now seen is a mug's game. They certainly do it that way in lots of other countries where far fewer people buy a house and renting is the accepted route to go for most people.
I'm still toying with whether to buy a house soon (because I like being settled not for financial reasons) or invest the money we have in growing our small business. In our case renting is probably the better investment because it allows us to use our limited capital for something else. The minute we buy a house, that's all gone - unless we want an even bigger mortgage.
If young people were to invest instead in advanced education, or career development, or in traveling, or in starting a business, who knows what financial benefits they and the country would accrue? As opposed to buying a house and sitting on it expecting it to pay for your retirement, which as we've now seen is a mug's game. They certainly do it that way in lots of other countries where far fewer people buy a house and renting is the accepted route to go for most people.
I'm still toying with whether to buy a house soon (because I like being settled not for financial reasons) or invest the money we have in growing our small business. In our case renting is probably the better investment because it allows us to use our limited capital for something else. The minute we buy a house, that's all gone - unless we want an even bigger mortgage.
If you compare our laws to somewhere like Germany, then you can see why people would prefer to buy.
I completely agree that in the UK we have a culture of encouraging people to buy at all costs.
But if you look at the regulations most banks have put in place for getting a mortgage now, it will help people to make better financial choices regarding buying a home, eg afforability.
If the banks had used these rules before then the houseing market wouldn't have gone boom and bust.
As for advice to the OP regarding housing costs buying or renting, I will have to go back to my original advice. Your individual circumstances will affect this so much, location, type of house you would want, mortgage you could get.
My house in the UK is a newish build and you can buy exactly the same one all around the country. I live in Lincolnshire and my house is approx £145,000 the same house down South approx £325,000
Research, research, research is the key to your move home.
Jul 13th 2012, 4:11 pm
#49
Was in Canada, now home.
Joined: Aug 2011
Location: Devon
Posts: 3,388
Re: Is it really that bad?
I definitely agree that mortgages are a good investment for some people. But not for everyone and it's the unthinking acceptance of mortgages that I think is a problem. A huge mortgage is always a good investment for the banks, but often not the best use of money for an individual.
If young people were to invest instead in advanced education, or career development, or in traveling, or in starting a business, who knows what financial benefits they and the country would accrue? As opposed to buying a house and sitting on it expecting it to pay for your retirement, which as we've now seen is a mug's game. They certainly do it that way in lots of other countries where far fewer people buy a house and renting is the accepted route to go for most people.
I'm still toying with whether to buy a house soon (because I like being settled not for financial reasons) or invest the money we have in growing our small business. In our case renting is probably the better investment because it allows us to use our limited capital for something else. The minute we buy a house, that's all gone - unless we want an even bigger mortgage.
If young people were to invest instead in advanced education, or career development, or in traveling, or in starting a business, who knows what financial benefits they and the country would accrue? As opposed to buying a house and sitting on it expecting it to pay for your retirement, which as we've now seen is a mug's game. They certainly do it that way in lots of other countries where far fewer people buy a house and renting is the accepted route to go for most people.
I'm still toying with whether to buy a house soon (because I like being settled not for financial reasons) or invest the money we have in growing our small business. In our case renting is probably the better investment because it allows us to use our limited capital for something else. The minute we buy a house, that's all gone - unless we want an even bigger mortgage.
The UK doesn't have enough housing, and the government isn't doing enough to remedy that problem. Nor have previous governments. That means property is likely to continue to be a good investment in the long term.
Sorry, I'm amending this to point out another flaw in your argument, that if they weren't buying houses young people would be investing in something more worthwhile. No they wouldn't, they'd be spending the money on rent, and owning a house is usually a benefit if you are starting a business, because it gives you security for a business loan and makes you more creditworthy.
Last edited by Editha; Jul 13th 2012 at 4:21 pm.
Jul 13th 2012, 11:20 pm
#50
Lost in BE Cyberspace
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Re: Is it really that bad?
Sorry, I'm amending this to point out another flaw in your argument, that if they weren't buying houses young people would be investing in something more worthwhile. No they wouldn't, they'd be spending the money on rent, and owning a house is usually a benefit if you are starting a business, because it gives you security for a business loan and makes you more creditworthy.
Jul 17th 2012, 12:37 am
#51
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Location: The sunshine state
Posts: 1,358
Re: Is it really that bad?
http://www.telegraph.co.uk/earth/gre...-a-decade.html
Amongst the 'con' considerations of my pros and cons list of moving back to the UK is the huge increase in population. Nothing to do with immigration or finding some countryside to enjoy, it's more of a concern regarding the basic sustainability of the present infrastucture. Schools, hospitals, roads, welfare state, etc. That, together with what seems like the inevitable means testing of pensions, health care etc. weighs heavily on the negative side of the decision making.
Amongst the 'con' considerations of my pros and cons list of moving back to the UK is the huge increase in population. Nothing to do with immigration or finding some countryside to enjoy, it's more of a concern regarding the basic sustainability of the present infrastucture. Schools, hospitals, roads, welfare state, etc. That, together with what seems like the inevitable means testing of pensions, health care etc. weighs heavily on the negative side of the decision making.
Jul 17th 2012, 12:45 am
#52
Lost in BE Cyberspace
Joined: Jan 2008
Posts: 41,518
Re: Is it really that bad?
http://www.telegraph.co.uk/earth/gre...-a-decade.html
Amongst the 'con' considerations of my pros and cons list of moving back to the UK is the huge increase in population. Nothing to do with immigration or finding some countryside to enjoy, it's more of a concern regarding the basic sustainability of the present infrastucture. Schools, hospitals, roads, welfare state, etc. That, together with what seems like the inevitable means testing of pensions, health care etc. weighs heavily on the negative side of the decision making.
Amongst the 'con' considerations of my pros and cons list of moving back to the UK is the huge increase in population. Nothing to do with immigration or finding some countryside to enjoy, it's more of a concern regarding the basic sustainability of the present infrastucture. Schools, hospitals, roads, welfare state, etc. That, together with what seems like the inevitable means testing of pensions, health care etc. weighs heavily on the negative side of the decision making.
Jul 17th 2012, 1:02 am
#53
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Re: Is it really that bad?
I disagree with that line of thought, mainly because, in time, resources will dictate that there is a limit of sustainability. In 1961, there were about five workers for each pensioner; now, there are just over three, and the ratio will decline rapidly unless the state pension age is increased to about 70, which it will have to be. That, however,will just make it more difficult for young people to get work. Catch 22.
Jul 17th 2012, 1:04 am
#54
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Joined: Jan 2008
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Re: Is it really that bad?
I disagree with that line of thought, mainly because, in time, resources will dictate that there is a limit of sustainability. In 1961, there were about five workers for each pensioner; now, there are just over three, and the ratio will decline rapidly unless the state pension age is increased to about 70, which it will have to be. That, however,will just make it more difficult for young people to get work. Catch 22.
Jul 17th 2012, 1:14 am
#55
Was in Canada, now home.
Joined: Aug 2011
Location: Devon
Posts: 3,388
Re: Is it really that bad?
But the reasons for the population growth are twofold, firstly that people are living longer, and secondly immigration. They are not unrelated. If there are more people over retirement age, then immigrants are needed to keep the economy going.
I'd also agree that there are infrastructure problems, but not that these are solely due to the increase in population. The biggest is the housing shortage, which has been predicted for a long time, and which successive governments have failed to tackle.
On means testing of pensions -- I've pointed out on other threads, but will do so again, that the recent reform removes the current means test for pension credit. Instead everyone will get a pension of 140 a week, adjusted for inflation. That starts in 2015. It is not clear how people are going to be expected to pay for social care, but means testing for that takes place now and will inevitably continue in some form. It is extremely unlikely that health care will become means tested. No government would dare, and the Conservative Party knows that it makes itself unelectable if it threatens the NHS.
As for the pros and cons of returning to the UK, I would have thought that housing costs would be the only serious con for anyone returning from the USA to retire. The infrastructure of the USA is reportedly crumbling also, and in important respects has never offered as much as the UK anyway. Better a stressed NHS than none at all. Public transport and social care are both superior to the USA's now and likely to continue to be.
Jul 17th 2012, 2:39 am
#56
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Re: Is it really that bad?
Doesn't a larger population force down wages ( and tax contributions ) and therefore quality of life. I read somwhere that a wage of 30k would be required before anyone actually paid into the system to support others, when you take into account what the wage earner receives back in the form of services, credits etc. And with 'x' million people unemployed why would one seek to increase the population via immigration?
Jul 17th 2012, 5:15 am
#57
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Re: Is it really that bad?
Doesn't a larger population force down wages ( and tax contributions ) and therefore quality of life. I read somwhere that a wage of 30k would be required before anyone actually paid into the system to support others, when you take into account what the wage earner receives back in the form of services, credits etc. And with 'x' million people unemployed why would one seek to increase the population via immigration?
I disagree with that line of thought, mainly because, in time, resources will dictate that there is a limit of sustainability. In 1961, there were about five workers for each pensioner; now, there are just over three, and the ratio will decline rapidly unless the state pension age is increased to about 70, which it will have to be. That, however,will just make it more difficult for young people to get work. Catch 22.
Last edited by Giantaxe; Jul 17th 2012 at 5:18 am.
Jul 17th 2012, 6:33 am
#58
Finally Home!
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Location: Used to be New York, now North Yorkshire
Posts: 3,610
Re: Is it really that bad?
Maybe my perspective on this comes from my family history research. My ancestors were Irish emigrants to different parts of the world. One of them built railways in America. One went to Panama to do the same. Others labored in the fields of rich British landowners. All jobs the locals didn't want, and all work that contributed to the wealth of the countries they moved to.
Of course they were hated and vilified. The more things change, the more they stay the same.
Jul 17th 2012, 8:10 am
#59
Was in Canada, now home.
Joined: Aug 2011
Location: Devon
Posts: 3,388
Re: Is it really that bad?
Giantaxe I think you should explain what is meant by "lump of labour fallacy". I know what you mean but you shouldn't assume Bud does.
Jul 17th 2012, 2:49 pm
#60
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Re: Is it really that bad?
Here's a couple of explanations that specifically mention immigration:
http://en.wikipedia.org/wiki/Lump_of_labour_fallacy
http://amateurassetallocator.com/200...mic-fallacies/