When poor and normal people get too much money, this is what happens

[danlightbulb]

Im not rich. Decent job, but don't own my own house and drive an older car.

But this, what we're seeing now, is a result of giving 'the bulk of people' too much money. Increasing benefits, increasing minimum wages, and most of all, cheap and abundant credit and mortgages.

When a very small number of very rich people get even richer, it doesn't really matter too much for the rest of us. They don't buy up cheap houses, they don't buy up low end cars. They amass their wealth in the things that they want, yachts, houses in Monaco etc, that most other people would never have gotten anyway.

But when you give poor and normal people too much money, they can then buy up all the cheaper houses, they can then live more lavish lifestyles with holidays abroad, luxury appliances, bigger TVs or whatever. And because there are so so many poor and normal people, this has massive effects, and has resulted in what we're seeing now. Huge inflation because EVERYTHING normal is in demand. No houses because a whole load of low to middle earners have all of a sudden been able to buy to let and get their mortgages paid for nothing, and banks have handed out money to let these people leverage even more out of their rising asset values.

And the solution to this rampant inflation that's pushed by everyone - increase benefits, decrease tax burden, put even more money in all of our pockets to cover these increasing costs. Except it won't work, its a circular self perpetuating problem.

The very very very poor cannot win. The new middle class 'property class' win in all scenarios, and can accumulate, and accumulate, and accumulate. The very rich can lose or win but it doesn't matter either way, because it won't effect them anyway.

 

[Firestar_3x]

Which "poor" people on benefits or minimum wage are buying up all the houses exactly?

 

[Stu999]

Poor people aren’t buying up all the property. Wealthy people or people who can access credit on terms normal people can’t (e.g. BTL landlords) are.

You’re right that loose lending practices have resulted in the general housing prices being way overvalued.

 

[danlightbulb]

Which "poor" people on benefits or minimum wage are buying up all the houses exactly?

The poor people who should have been council tenants for life, unfortunate as it sounds.

Society needs a pecking order, and the dissolving of it, has left us in this mess.

 

[danlightbulb]

Wealthy people or people who can access credit on terms normal people can’t (e.g. BTL landlords) are.

They aren't the super rich though. They were 'normal' people who have become wealthy through the property gains. That's my point.

 

[vanandjuanunited]

Bit late for an April fools

 

[Firestar_3x]

The poor people who should have been council tenants for life, unfortunate as it sounds.

Society needs a pecking order, and the dissolving of it, has left us in this mess.

The government handing out minimal extra money to people aint moving them from the breadline to house owners on mass.

We are seeing the effect of after Covid housing demand, massive disruption in the supply chain and a war in Europe.

 

[Raikiri]

Im not rich. Decent job, but don't own my own house and drive an older car.

But this, what we're seeing now, is a result of giving 'the bulk of people' too much money. Increasing benefits, increasing minimum wages, and most of all, cheap and abundant credit and mortgages.

When a very small number of very rich people get even richer, it doesn't really matter too much for the rest of us. They don't buy up cheap houses, they don't buy up low end cars. They amass their wealth in the things that they want, yachts, houses in Monaco etc, that most other people would never have gotten anyway.

But when you give poor and normal people too much money, they can then buy up all the cheaper houses, they can then live more lavish lifestyles with holidays abroad, luxury appliances, bigger TVs or whatever. And because there are so so many poor and normal people, this has massive effects, and has resulted in what we're seeing now. Huge inflation because EVERYTHING normal is in demand. No houses because a whole load of low to middle earners have all of a sudden been able to buy to let and get their mortgages paid for nothing, and banks have handed out money to let these people leverage even more out of their rising asset values.

And the solution to this rampant inflation that's pushed by everyone - increase benefits, decrease tax burden, put even more money in all of our pockets to cover these increasing costs. Except it won't work, its a circular self perpetuating problem.

The very very very poor cannot win. The new middle class 'property class' win in all scenarios, and can accumulate, and accumulate, and accumulate. The very rich can lose or win but it doesn't matter either way, because it won't effect them anyway.

I'm going to attribute this to stupidity rather than malice. The problem is being caused by companies buying up huge swathes of property and renting them at above market value. They can do this because there's no rent control and people need housing, it's not something that's optional.

For example, last year, Lloyds announced plans to buy to let 50,000 properties in the next ten years and that's just one company.

Homeownership has decreased from 73% in 2007 to under 65% currently. Low and even middle-income earners in a lot of places can't afford to buy a first home, let alone multiple properties.

 

[danlightbulb]

Think about the figures.

Two full time salaries earning minimum wage is now about £38k a year, which will get you nearly a £200k house.

That's why there are barely any houses below £180-200k anymore.

The combination of minimum wage increases, banks willingness to give credit, and working class people with a bit saved up who invest it into low end property, is why we're in this mess now.

We are seeing the effect of after Covid housing demand, massive disruption in the supply chain and a war in Europe.

Those events have triggered this all of a sudden, but they aren't the root cause. The root cause is buried in the last 20 years of economic policy.

 

[clv101]

Nonsense!

Many countries have both richer 'poor' people and poorer 'rich' people and get on just fine. We do not need the inequality associated with your 'pecking order'.

 

[arknor]

Im not rich. Decent job, but don't own my own house and drive an older car.

But this, what we're seeing now, is a result of giving 'the bulk of people' too much money. Increasing benefits, increasing minimum wages, and most of all, cheap and abundant credit and mortgages.

When a very small number of very rich people get even richer, it doesn't really matter too much for the rest of us. They don't buy up cheap houses, they don't buy up low end cars. They amass their wealth in the things that they want, yachts, houses in Monaco etc, that most other people would never have gotten anyway.

But when you give poor and normal people too much money, they can then buy up all the cheaper houses, they can then live more lavish lifestyles with holidays abroad, luxury appliances, bigger TVs or whatever. And because there are so so many poor and normal people, this has massive effects, and has resulted in what we're seeing now. Huge inflation because EVERYTHING normal is in demand. No houses because a whole load of low to middle earners have all of a sudden been able to buy to let and get their mortgages paid for nothing, and banks have handed out money to let these people leverage even more out of their rising asset values.

And the solution to this rampant inflation that's pushed by everyone - increase benefits, decrease tax burden, put even more money in all of our pockets to cover these increasing costs. Except it won't work, its a circular self perpetuating problem.

The very very very poor cannot win. The new middle class 'property class' win in all scenarios, and can accumulate, and accumulate, and accumulate. The very rich can lose or win but it doesn't matter either way, because it won't effect them anyway.

Have you ever heard of governments purposely devaluing currencies by quantitative easing?

blaming the poor... WOW just WOW how can you not understand how economies work?

 

[danlightbulb]

Nonsense!

Many countries have both richer 'poor' people and poorer 'rich' people and get on just fine. We do not need the inequality associated with your 'pecking order'.

Then we'll get this rampant inflation.

When money and credit pours into the system, inflation is the result. Its baked in completely now, because a lot of people have a lot more money than they other wise would have in an equivalent position 50 years ago.

 

[Raikiri]

Think about the figures.

Two full time salaries earning minimum wage is now about £38k a year, which will get you nearly a £200k house.

That's why there are barely any houses below £180-200k anymore.

The combination of minimum wage increases, banks willingness to give credit, and working class people with a bit saved up who invest it into low end property, is why we're in this mess now.

So if those two minimum wage people only earned £28,000 instead of £38,000, you're saying there would be a lot more houses under £180,000?

Well if that were true... they wouldn't need as large of a mortgage and could still afford a house because they would be "cheaper".

Except, adjusted for income, they wouldn't be cheaper, it would be the same.

 

[danlightbulb]

blaming the poor... WOW just WOW how can you not understand how economies work?

Im not blaming the poor, its not their fault.

But objectively, what is happening is a result of too much money/credit in the system, and most of the spending that causes inflation is spent by the majority of people, i.e normal people.

 

[danlightbulb]

So if those two minimum wage people only earned £28,000 instead of £38,000, you're saying there would be a lot more houses under £180,000?

Well if that were true... they wouldn't need as large of a mortgage and could still afford a house because they would be "cheaper".

Except, adjusted for income, they wouldn't be cheaper, it would be the same.

Exactly my point!

But what has happened is the increased input money, has fed house prices, allowed people who already own to leverage up, and has fed more house prices.

If money stopped coming in at the bottom, we would have had stable prices.

 

[do_ron_ron]

Im not rich. Decent job, but don't own my own house and drive an older car.

But this, what we're seeing now, is a result of giving 'the bulk of people' too much money. Increasing benefits, increasing minimum wages, and most of all, cheap and abundant credit and mortgages.

When a very small number of very rich people get even richer, it doesn't really matter too much for the rest of us. They don't buy up cheap houses, they don't buy up low end cars. They amass their wealth in the things that they want, yachts, houses in Monaco etc, that most other people would never have gotten anyway.

But when you give poor and normal people too much money, they can then buy up all the cheaper houses, they can then live more lavish lifestyles with holidays abroad, luxury appliances, bigger TVs or whatever. And because there are so so many poor and normal people, this has massive effects, and has resulted in what we're seeing now. Huge inflation because EVERYTHING normal is in demand. No houses because a whole load of low to middle earners have all of a sudden been able to buy to let and get their mortgages paid for nothing, and banks have handed out money to let these people leverage even more out of their rising asset values.

And the solution to this rampant inflation that's pushed by everyone - increase benefits, decrease tax burden, put even more money in all of our pockets to cover these increasing costs. Except it won't work, its a circular self perpetuating problem.

The very very very poor cannot win. The new middle class 'property class' win in all scenarios, and can accumulate, and accumulate, and accumulate. The very rich can lose or win but it doesn't matter either way, because it won't effect them anyway.

You an Express reader?? You sound so disconnected from the problem.
The poor never have so much money that they can indulge like you seem to think they can. The normal, especially under the Tories is they do not have enough, full stop. The Tories always go after the sick and those on Welfare while giving the wealthy tax cuts.
There are no cheap houses unless they are run down and in areas where there is little employment. It is how the market works, lots of demand equals high prices and vice versa. The inflation is due in part to Govt economic policy. We are going to get Stagflation rather than just inflation. Your view of the housing market is so at odds with reality. People are struggling to get a house in almost all areas of the country due to high prices caused by Govt policy of continually inflating the housing bubble.
The only way the middle class can become other property owners is to inherit their parents houses. The middle class has been squeezed for years.
The only ones making it are the very rich and have been for two decades.

 

[danlightbulb]

It is how the market works, lots of demand equals high prices and vice versa.

The demand wouldn't be there, if money into the bottom end hadn't been accelerated in the way that it has over the last 20 years.

The 'old money' very rich don't really have much impact here at all. The new property rich do.


My landlord is a fitter for British Gas. That's it. That type of job should never have been sufficient to own three houses. Too much money flowing in.

 

[Raikiri]

Exactly my point!

But what has happened is the increased input money, has fed house prices, allowed people who already own to leverage up, and has fed more house prices.

If money stopped coming in at the bottom, we would have had stable prices.

Except it's not your point.

If low earners making more money is the driving force behind increased housing costs then reducing their income would reduce housing prices in tandem. Meaning that their decreased income would have the exact same buying power and they would still be able to buy the properties.

Do you see how this is contradictory?

 

[Retro6]

Humanity... isn't it wonderful.

 

[arknor]

Im not blaming the poor, its not their fault.

But objectively, what is happening is a result of too much money/credit in the system, and most of the spending that causes inflation is spent by the majority of people, i.e normal people.

it's nothing to do with the poor having too much money and being able to afford things.....

the government destroyed our currency so it's worth less, you need more of it to import things from china etc.
so things then cost more to get here.... they must be sold for more monies..... then there was this pandemic in china where most of the country shut down so not as many things were getting made.
this increased the demand of them and increased prices because supply was less than demand.

but yea lets blame the poor for the government making phantom monies.....




Yep toally the poors fault sorry my eyes won't stop rolling

nothing to do with the tory party creating obscene amounts of money for the last 2 years....., it's all the poor peoples fault and those on benefits...... Boris Johnson told me or something