Bah, its never legally your property as long as the King/Gov collects property tax on it. They bake public education money into property taxes here in most of the US and it just goes up and up. For the chilllldren. Then you have the idiots in government who think that despite taking away various industries like timber (spotted owls are saved!) along with a real estate bubble exploading housing values that taxes should be raised to keep paying for bloated government programs or even just the local sheriffs.

I’d love to buy a house outright but they’re all over valued and losing value every day if you look beneath the lies Real Estate/Banks/Gov sell you. Many still don’t and fall into the trap. Then they want bailouts. In the last 4 years I’m still ahead of the game waiting for prices to return to sanity and at least still mobile if I need to be.

The recent US experience suggests that you can print money like mad without seeing any real wage inflation.
How it all ends I don’t know.
But the darkest cloud on the horizon is the bursting of the Chinese property bubble and the effect this will have on all emerging markets.
Apparently couples with a combined income of $5000 per year are paying $120k for a flat an hour’s train ride from the centre of Beijing. That’s 25 times combined income, 50 times the income of a single male wage earner. Prices would have to fall 90% to make that affordable. Paying this back is obviously impossible, they borrow money from relatives and loan sharks and hope that China becomes as rich as the USA before they have to pay it back.
What are the odds China’s GDP will rise from $4000 per capita to $40,000 per capita over the next 20 years without any hiccups? That’s what they need to happen just to break even.

here in america people are starting to figure out that we have a whole generation of young people yoked with hugh college debt who dont’ have jobs, or work flipping burgers, who won’t be able to buy cars, buy houses, pay high taxes to keep the ebt cards filled. think thru that equation. the future is detroit.

btw: detroit has houses for sale for $1. nobody will buy them. heh.

Look at the Tory party. They fucked up on Black Wednesday back in (Sept) 1992. Interest rates rose to 15%. And suddenly millions of home owners were staring down the barrel of a gun. With the bank’s finger on the trigger.

Now think about this. The Tories haven’t won an election in the UK since (April) 1992. And they won’t win next year either. So it will be 2020 at the earliest before they get round to winning an election outright.

That means 28 years of punishment from the natural Tory supporters. And it can all be traced back to what the Tories did on Black Wednesday when they sold out their core vote to the money markets.

The UK is pretty weird. People can see the logic in lower house prices. But as soon as they sign up for their first mortgage – they are now on the side of the casino and not the punter. They have their hands on the prize and the only thing that keeps them sweating at night is the idea of a house crash.

Fucked up all round.

Is there a solution? I am not sure. But I do think it is the biggest problem facing the UK today. And the depth of the problem is disguised by the large number of poor people who get housing benefits, and so don’t have to worry about house prices.

I read a book related to this area. It is called ‘The Grip of Death’ (which is where the word mortgage comes from apparently).

http://www.amazon.co.uk/The-Grip-Death-Destructive-Economics/dp/1897766408

The book blames rocketing house prices on the fractional reserve banking system – which doubles the amount of money in circulation every few years.

It is a fascinating book – but I am not qualified enough in economics to judge its claims. It is pretty ‘out there’ – in the sense of everything of saying everything you thought you knew is wrong.

Love the blog by the way.

Also – what advice would you give to a young person who has inherited a nice flat – already fully paid for. What is the best way of playing such a hand? Would you look at life differently in that situation?