Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - 30th Nov 21
Omicron Covid Wave 4 Impact on Financial Markets - 30th Nov 21
Can You Hear It? That’s the Crowd Booing Gold’s Downturn - 30th Nov 21
Economic and Market Impacts of Omicron Strain Covid 4th Wave - 30th Nov 21
Stock Market Historical Trends Suggest A Strengthening Bullish Trend In December - 30th Nov 21
Crypto Market Analysis: What Trading Will Look Like in 2022 for Novice and Veteran Traders? - 30th Nov 21
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Impact of Demographics on UK House Prices

Housing-Market / UK Housing May 06, 2019 - 10:01 AM GMT

By: Nadeem_Walayat

Housing-Market

This analysis directly continues on from (UK Real Unemployment Rate is 5.5 million - Britains Benefits Culture) which is part of a series that aims to conclude in a new multi-year trend forecast for UK house prices. But first a recap of my analysis to date that so far suggests to ignore mainstream press hysteria that warns of impending doom for Britains housing market, encouraged no less than the Government and Bank of England which warn to expect a 30% CRASH in UK house prices should the UK LEAVE the EU without a deal.


Instead my analysis so far (first made available to patrons) continues to paint a picture for UK house prices to remain on an overall upward trend trajectory.

uk-house-prices-analysis-2019

Impact of Demographics on UK House Prices

The impact of Britain's demographics crisis on the UK Housing market suggests to expect an increasing supply from the mid to upper range of the UK housing market as many people approaching retirement will have during their working lives looked on their homes as a means of providing for them in their retirement as the expected rise on house prices as a consequence of inflation and economic growth to result in a profit far in excess of any outstanding mortgages at the time of retirement and in most cases they will have played the property market wisely and thus be sitting on a small fortune, especially those that bought in the South East of England over the past 20 to 30 years. Therefore a significant number of retirees look set to continue to either downsize or move into retirement homes and retirement villages that have been springing up, and maybe even new retirement towns will be built which in part will free up traditional housing supply and put a dampener on house price inflation of the likes of which we saw during the last boom whilst INCREASING demand for smaller properties in retirement towns and areas of the country such as sea-side towns.

Furthermore the psychology of seeing ones property as a retirement investment is widespread amongst all ages so continues to act as an encouragement to buy properties as people continue to imagine that properties will always deliver huge gains as has been the experience of their parents and grand parents, one of an inexorable rise in house prices beyond that of purchasing power of earnings.

In addition to this we have the wage slaves with less real terms disposable income to pay towards housing costs in terms of mortgages which on face value implies a persistent real terms deflationary outcome for UK house prices over the next 20 years. However this has to contend with what still amounts to rampant immigration coupled with domestic population growth as immigrant couples tend to have larger families which coupled with the benefit culture of having children for benefits will result in at least an extra 10 million people over the next 20 years, a trend that is more than capable of overcoming any deflation as a consequence of a downsizing ageing population that ultimately has to imply persistently high real rates of inflation not just for house prices but for sectors right across the economy.

Furthermore as more of the benefits for life claimants are increasingly encouraged or forced into work, in addition to many more retirees continuing to work in some capacity will improve Britain's productivity which coupled with ongoing exponential technological advances will mean that a ratio of workers to retirees that is unsustainable today could become sustainable 20 years from now which ultimately translates in workers being able to support a greater proportion of wages being spent on housing costs in terms of affordability than is the case to today, which is why those fixated on affordability ratio's as compared against those of the past will continuously find themselves wrong footed, as ratios get ramped ever higher from 20% of income 20 years ago to 1/3rd of income today to 50% of income in 10 or so years time.

And finally another point to consider is that by far most of the increase in population will be made manifest in England, specifically as a wave rippling out of central London where the more distant the region the lesser the impact of population growth and therefore to more likely suffer the consequences of having an ageing population namely Scotland which is thus likely to continue to be subsidised at an even greater extent by England which means that whilst the SNP will continue to peddle there dreams of Independence via a second referendum, however the demographics imply it's going to become less likely of ever being achieved with each passing year! Which means whenever the SNP are speaking on the TV one should hit the mute button, or change channel rather than waste your time on listening to their fantasy.

Therefore the message being painted by this demographics analysis supports my long standing view that one of the only ways for people to leverage themselves to the exponential inflation mega-trend is by being exposed to assets such as housing and not only that but whenever prices fall due to events such as the current BrExit chaos, and fluctuations in the business cycle, even if not in nominal terms but just in real terms (i.e. after inflation) than prospective home buyers should seize such golden opportunities because the over riding trend for house prices over the next 20 years will be Upwards! For instance I would not be surprised if house prices double over the next 10 years or so! So ALL of the risks are to the UPSIDE, i.e. if the Government loses control of inflation, which in its immediate aftermath would result in a real terms drop but which would sow the seeds for the next ramping higher of house prices just as the Great Recession house prices depression concluded in the embryonic bull market of 2012 soon followed with a bull market proper.

In terms of implications for my forthcoming house prices forecast, then this analysis is supportive of my view for an overall bullish outlook for house prices for at least the next decade and likely beyond. Which means that there isn't going to be a crash or collapse as the Bank of England has recently been propagandising in attempts to scare the population and politicians into supporting Theresa May's BAD Brexit deal. For the reality is that any fall in prices over the next few months would be temporary as in terms of the big picture Brexit does not matter where house prices are concerned, deal or no deal, house prices are going UP in either case!

In fact I would not be surprised if house prices soared soon after Brexit, i.e. do the OPPOSITE to the doom and gloom consensus view of the mainstream press.

Ensure you are subscribed to my always free newsletter for the next analysis in my UK Housing Market series.

This analysis was first made available to Patrons who support my work - https://www.patreon.com/posts/uk-ageing-and-25361373

So for immediate First Access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat.

Recent analysis includes:

And planned analysis for May includes:

  • Stock Market Trend Forecast Update
  • Machine Intelligence Investing stocks sub sector analysis
  • UK Housing market ongoing analysis.
  • Gold / SIlver trend forecast update.
  • China Stock Market SSEC

Your Analyst wondering if the Night King is actually dead!

https://youtu.be/3ELmQRb9q0o

Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2019 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in