Are earnings too low / living costs getting too high??

[radderfire]

And then there are the BTL landlords, who are creaming off all this money from the worst off in society - along with our tax revenue to boot - and doing very nicely, thanks.

Doesn't that **** you off?

It always has done and it is beginning to get to me even more these days.

Historically, land control was done by violence, the most powerful got to control everything, and that's how the concept of land ownership was established. These days the rich and powerful are still firmly in charge, but they can't just use force, they have to use the rigged financial system to control everything for their own interests. Property prices are now a complete joke but being kept artificially high by Quantitative Easing, Buy To Let mortgages are really underwritten by the tax payer through quantitative easing for the banks, and are a major contributor to further inequality, and poor people are getting squeezed ever harder by the voracious financial sector which makes no real contribution to society, apart from piggyback off the hard work of others.

Another big joke is the Help To Buy scheme, which in truth should be named the Help For Bankers scheme, as it is a way for the taxpayer to artifically subsidise mortage lending banks and help them keep prices artificially high. It is certainly not a help for buyers, it is a way of extracting more money from them. What would be a help is allowing the property market to correct naturally.

Quantitative Easing has taken taxpayer money and pumped it into the financial sector to keep it on artificial life support. Money was injected into the banks, theoretically they would lend it on, but they just used it to shore up their balance sheets. This in turn makes the real economy suffer because it doesn't get the funding it needs and cannot invest and grow.

None of the fundamental problems in the economy have been addressed by the measures taken for the last crisis, and very shortly there will be another crisis, mark my words.

 

[radderfire]

And well BTL is the rich getting richer at the expense of less well off families, yes. I don't know what can be done about that.

Less well off families need to educate themselves about finance and start sticking up for themselves when it comes to government decisions regarding the financial system. What most people don't realise is that the financial elite of the banking sector have an unfair advantage in that they can literally create money out of thin air, and this creates a debt based economy. It would be fairer to all if the money supply was fixed, or increase in the money supply could only be done by government and the money created used for government spending, there is a charity called PositiveMoney which has started campaigning on this.

The less well off need to learn about this stuff if they want a fairer deal. I'm a realist so I don't know whether they will do that. If they don't, they are just going to get more of the same.

 

[adolf hamster]

I think the issue is that whilst the ratios of earnings to costs is still broadly similar and manageable to "ye olden days", there are so many more things people need, or at least they think they need, tv's, computers, phones, internet, cars, holidays to magaloof etc thats making us think we're not doing so well.

If we lived more simply, we're better off than we think, at least everyone can afford to put food on the table, well unless they make a decision to spend their money on something else.

 

[Energize]

It's really all just down to the governments planning regulations preventing affordable housing being built. The fact that certain measures of quality of life are lowering as time goes on is shocking but it's an inevitable consequence of government interfering in the economy.

 

[StriderX]

We live in a broken society that only a great wound can heal, or at least end the trauma of a patronising hierarchy.

Government has failed to provide a viable answer for four decades, finance is and always will be fluid... especially so if it only relies on social structures within the country to sustain it, all of which are failing to provide, nations relied on a relative nationalism that wasn't shunned - this is gone in corporate culture.

The first solution is to end the embarrassment in Westminster, the second is to simply leave.

 

[PapaLazaru]

Less well off families need to educate themselves about finance and start sticking up for themselves when it comes to government decisions.

They thought they did and voted for Brexit, the poor fools.

 

[Participant]

Less well off families need to educate themselves about finance and start sticking up for themselves when it comes to government decisions regarding the financial system. What most people don't realise is that the financial elite of the banking sector have an unfair advantage in that they can literally create money out of thin air, and this creates a debt based economy. It would be fairer to all if the money supply was fixed, or increase in the money supply could only be done by government and the money created used for government spending, there is a charity called PositiveMoney which has started campaigning on this.

The less well off need to learn about this stuff if they want a fairer deal. I'm a realist so I don't know whether they will do that. If they don't, they are just going to get more of the same.

That all sounds a bit red to me. I'd agree with this bit though :

Less well off families need to educate themselves

If people want to be / have more than 'average', they need to take ownership for the outcomes of their lives and stop expecting things to be handed to them. Education is a good way to do this.

 

[esoteric]

House prices/rent is the biggest impact on the wage packet. Our house is dead on 50% of my weekly wages.

 

[Irish_Tom]

If you want some historical context, check out 'Capital in the Twenty First Century' by Thomas Piketty.

It shows that although inequality has been increasing over the past 30-40 years, it's actually just returning to the 'normal' levels of the past 300+ years.

The two world wars and the great dipression were massive global shocks to wealth distribution which levelled the playing field to a degree (although not completely).

Shifting values of land, property and financial instruments (especially since the deregulation of the financial industry during the Regan / Thatcher period) have allowed the top decile (but especially the top 1%) to return to levels of wealth they had before the turn of the 20th Century.

Now, that isn't to say that this is right or fair, but it does suggest that the period between WW2 and the mid 70s was the exception rather than the rule. Baby Boomers enjoyed unprecedented levels of growth as well as a more equal distribution of wealth, and we all sort of convinced ourselves that was normal.

Globalisation and neoliberalism has allowed the cream to rise back to the top, and it will likely take another massive shock or two if we're ever going to see things change.

Another great book is 'Debt: The First 5,000 Years' by anthropologist David Graeber. It explores the historical relationship of debt with social institutions. One of the key points was that in ancient civilisations it was common for a new ruler to clear the debt record (literally wipe the slate clean) which would enable families to free themselves from debt slavery. This often saw a (short-term) levelling of wealth distribution (partly because so much wealth was built on slavery) until the poorest folk returned to debt slavery, owned by the rich, and the whole pattern repeated itself a generation or two later.

So the next big shock doesn't necessarily have to be a world war, it could be a 'Fight Club' style loss of the debt record.

I appreciate this is all macro rather than micro analysis, but it is interesting from a contextual perspective.

 

[Psycho Sonny]

So which of these things _should_ you ditch in order to have enough to put a roof over your head?

TV
Broadband
Phone
Car
Computer
Holiday
Smart clothes
Eating out/take-away
Going out

Because down here there are people with only 1 or 2 things from that list, who pay 75% of their wages on rent, and basically subsist.

A lot here on this forum have always been middle-class, and have no idea how much of a struggle earning a low wage really is.

"Oh you could just ditch Sky and have heaps of money left over then."

No. No you couldn't. Plenty down here working full time jobs just to pay the rent, with few/none of the luxuries on that list.

TV - is what £150 a year unless you **** sky then it's £1000 a year

Broadband - is what cheapest £20 a month and most expensive £45 a month depending on speed

Phone - You can buy yourself a moto g for £150 it will easily last 2 years so £75 a year plus a giffgaff sim for what £7.50 a month it's not a huge spend unless you want an iphone, then it's ££800 a year

Car - probably the most expensive item after a home. these are now available cheap thanks to dacia, running costs are high but always have been. unless you need to have a BMW then yes it will cost you a fair whack.

Computer - Buy second hand off members market for half the price

Holiday - Costs peanuts these days. Flights to Berlin, marrakech, Milan, amsterdam, tenerife all available for around £50 return thanks to ryanair and easyjet. It's only if you want to go to Vegas, cancun, thailand, australia, dubai and the likes it will cost you thousands. You can get a week away abroad in a decent hotel for about £400-£500 these days. then you need spending money on top.

Smart Clothes - Anyone who has half a brain doesn't really care about this. I know millionaires who wear the same pair of adidas trainers as those on job seekers do. Only materialistic people need to have Louis vuitton, ralph lauren, etc. You can get quality shirts for less than £30 in M & S, etc which should last a couple of years. Go to Primark and you get stuff which doesn't last as long but is much cheaper. I don't shop in primark but I do have a lot of t shirts from Qwertee that I paid £4 each for in their sales. Clothes now are cheaper than ever before unless you want a big HUGE brand name on it.

Eating Out / Take Away - I hardly ever do this for 2 reasons. I have a very high bar when it comes to food. Most restaurants and take Aways fail to hit this bar and I can make better food than them and for much cheaper. I possibly do this once every 2 months I personally prefer to eat @ home or @ friends/families houses.

Going out - I go to friends and families houses a lot. Maybe go out to other places once a month on average. It's not a huge expense if you pre-drink or just go out for a meal. I'm going to the Drake concert for instance but the only expense will be the tickets, parking and fuel. A whole night out for around £70. Then on other occasions go out for the day to a shopping centre to see if anything takes your fancy. Mainly though visiting friends and family which costs nothing in fact if they feed you which always happens it's actually saving you money on groceries.


You can enjoy life without spending millions of money. Obviously being able to afford nicer things makes your experiences more rich. As in Thailand is a lot better culturally than tenerife, etc. But if all your looking to do is go somewhere hot and relax tenerife ticks the bill.


Some people spend £10,000 on home cinemas. You can have a similar experience in your own home for £1300. £500 - projector HD27. Screen - paint on wall for £50 or cheap one off ebay for £100. amp and speakers - £700. You will get just as much enjoyment from that system as anyone would from a £10K one IMO it just won't be as refined.

the problem is people on low salaries want all the things on those with high salaries have. that is never going to happen. you will need to settle for a ford focus over a BMW.

 

[Eurofighter]

Houses cost too much. Simple.

They need to reform the planning laws. Give people land or something.

 

[DampCat]

Just a question for the people angry at BTL landlords. If someone you knew was earning pretty well in a non-sustainable lifestyle (IE, physical labour which will at some point deteriorate due to aging), and with property being such a sound investment; would you really begrudge them buying a second home as a retirement plan?

Or are we specifically talking those with 50 properties etc

 

[Psycho Sonny]

Houses cost too much. Simple.

They need to reform the planning laws. Give people land or something.

So what happens to all those that paid lots of money for their houses and been struggling with their mortgage for the past 5 years?

It's not a simple fix. Their will be more losers than there are winners with the type of thing your suggesting. If your going to give land you need to give it to those who already have homes too to make it fair.

 

[Psycho Sonny]

Just a question for the people angry at BTL landlords. If someone you knew was earning pretty well in a non-sustainable lifestyle (IE, physical labour which will at some point deteriorate due to aging), and with property being such a sound investment; would you really begrudge them buying a second home as a retirement plan?

Or are we specifically talking those with 50 properties etc

BTL landlords are seen as being evil. They need to make it law that nobody can own more than 5 residential homes in the UK. No company can own more than 5 residential homes, etc.

that would help the market come to a natural balance.

 

[Tom_ed1987]

Not sure why landlords are still seen as the absolute evil - BTL yields have all but collapsed in much of the SE where rental costs have in no way kept pace with house prices.

 

[Rroff]

...

Some people spend £10,000 on home cinemas. You can have a similar experience in your own home for £1300. £500 - projector HD27. Screen - paint on wall for £50 or cheap one off ebay for £100. amp and speakers - £700. You will get just as much enjoyment from that system as anyone would from a £10K one IMO it just won't be as refined.

I have very mixed feelings about your post hah - I built a home cinema pretty reasonably being sensible (a little over £2K) most people wouldn't even notice the difference between a £10+K setup - only thing that wasn't brand new was the seating as I got it nearly new from a relative at a good price.

Problem with buying second hand tech stuff is that not everyone can do it - there needs to be enough people buying new and selling on to supply that market which does mean that most mainstream people have to buy new or the market collapses. Personally with tech stuff I prefer to buy new with the warranty and least fuss to go with it.

Cars are actually relatively affordable these days via leasing options (even if in the long term you spend more) - you can get a brand new well specced, top brand, car on leasing for well under £300 a month new or under £200 nearly new.

I'm always an advocate of spending a little more on clothes - the cheap stuff can often be a false economy i.e. socks some of the better ones will last like 6x as long as a cheap sock while only costing 2-3x as much. The slightly more expensive stuff (if you aren't just paying for a label) often looks nicer and sits on you nicer.

If people do need to budget Eating Out / Take Away is probably one of the biggest valid areas as it is easy to get into the habit of spending a lot of money on it and most places are very expensive for what you get.

 

[Uther]

BTL landlords are seen as being evil. They need to make it law that nobody can own more than 5 residential homes in the UK. No company can own more than 5 residential homes, etc.

that would help the market come to a natural balance.

Why do people need more than one home? If houses were seen as homes and not investment opportunities a lot of the problems with the housing market would disappear.

 

[Rroff]

Not sure why landlords are still seen as the absolute evil - BTL yields have all but collapsed in much of the SE where rental costs have in no way kept pace with house prices.

The problem is the market doesn't work to the normal rules of supply and demand, etc. and external regulation would be heavy handed and over-reaching but maybe necessary as there is little to no capacity internally for self regulation and in some cases no desire for it at all even though in the long run the market will destroy itself.

 

[Chris1712]

Not sure why landlords are still seen as the absolute evil - BTL yields have all but collapsed in much of the SE where rental costs have in no way kept pace with house prices.

Yes that's the situation NOW, not if you bought it 20 years ago . Certainly most of my landlords have been of that ilk, went from 1 to ~20 homes through the 90s and now sitting pretty. My landlord lives next door and is currently getting a 2nd garage built for his 'other' Aston Martins. Meanwhile I have tiles missing in the bathroom and half the plaster missing on one wall, been on his list to fix for 3 months now...

 

[Puzzled]

BTL landlords are seen as being evil. They need to make it law that nobody can own more than 5 residential homes in the UK. No company can own more than 5 residential homes, etc.

that would help the market come to a natural balance.

I'd rather have a company own a portfolio of properties than the current situation of people with overstretched finances having a go at being a landlord and failing in their responsibilities to the tenants. Easier to to regulate companies as well and that is something that is missing from the rental market, proper regulation. At least they have started to tackle the scandal that is letting agency fees.

For renting to work it either needs to be affordable so people can save money to purchase a property or stable enough to provide long term housing, at the minute its neither.