Inflation - the Elephant in the Room

oxymoron said:
No they generally do not as you are probably well aware , i was pointing out you said "decent people " and that statement is pure tosh .
Not all people can work from home and you insinuated "decent people" should go somewhere where they can work from home .
Can you please define what you call decent people ? And why you think they should move jobs just so they can work from home ?
Are manual workers not in your list of decent people ?
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Not quite sure why you have your knickers innsuch a twist.

Anyone who is decent at their job has an opportunity to pick an employer that suits their preferred way of working. That includes scaffolders an builders. Obviously some people, such as the aforementioned scaffolders and builders cannot work from home. Niether can surgeons, nurses or fighter pilots. If they really really really want to work from home, they need to change what they do for a living.

My reply was to someone who specifically mentioned people working in offices. I have made offers to 6 new employees in the last 2 weeks. 1 wants to be full time in the office/on site. 1 wants to be full time on site. 3 want a mix, and 1 full time remote.

18 months ago my business wouldn't entertain anyone not full time in the office or on site. In fact, senior management wouldn't let me employ a guy who wanted to finish at 4:30 rather then 5 so he could collect his disabled child from after school care. He was an exceptionally good candidate.

Just as my company has. Employers will quickly realise that to attract the best people, they will have to be flexible with where people work from. Just offering the most money won't cut it anymore.
 
I've been questioning this spending for years. How are first time buyers buying 3 bed house new builds, driving big cars and working at places that can't be paying much more thsn what we (me and the wife) are pulling in? Must be all this very very low interest rate. Surely? But just for how long can this go on? And when they start to rise, as they surely will, who's going to get the repos and deal with the people who will need re-housing? It won't take must of a rise to get people (the younger people) to start to panic.
 
Crazyface said:
I've been questioning this spending for years. How are first time buyers buying 3 bed house new builds, driving big cars and working at places that can't be paying much more thsn what we (me and the wife) are pulling in? Must be all this very very low interest rate. Surely? But just for how long can this go on? And when they start to rise, as they surely will, who's going to get the repos and deal with the people who will need re-housing? It won't take must of a rise to get people (the younger people) to start to panic.
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Or you just lock in your mortgage for a long time

We have a 10 year fix at a more than affordable rate ?
 
BiMGuy said:
Not quite sure why you have your knickers innsuch a twist.

Anyone who is decent at their job has an opportunity to pick an employer that suits their preferred way of working. That includes scaffolders an builders. Obviously some people, such as the aforementioned scaffolders and builders cannot work from home. Niether can surgeons, nurses or fighter pilots. If they really really really want to work from home, they need to change what they do for a living.

My reply was to someone who specifically mentioned people working in offices. I have made offers to 6 new employees in the last 2 weeks. 1 wants to be full time in the office/on site. 1 wants to be full time on site. 3 want a mix, and 1 full time remote.

18 months ago my business wouldn't entertain anyone not full time in the office or on site. In fact, senior management wouldn't let me employ a guy who wanted to finish at 4:30 rather then 5 so he could collect his disabled child from after school care. He was an exceptionally good candidate.

Just as my company has. Employers will quickly realise that to attract the best people, they will have to be flexible with where people work from. Just offering the most money won't cut it anymore.
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Not getting my knicker twisted, just glad you clarified what you mean , not decent people but people who are decent at their job .
Good to see you are employing in this economic time , nice to hear of someone doing well enough to employ extra staff .
We are really struggling to find suitable candidates for an opening at one of our sites .
 
SwingsitlikeHogan said:
From a purely personal perspective I have decided that can’t and won’t worry about inflation and my savings and pensions. If down the line money gets tight then we can always do equity release or sell the house we own and downsize or relocate to refresh savings. We are fortunate that we are in such a position…as much of what has got us to where we are today has been luck and good fortune on top of our years of (mostly) hard work.
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One of my likes about what is going on is I did an Equity Release with no intention of paying the interest on it. The increase in my house value has far outstripped the increase in what I owe.
 
Neilds said:
What is the big thing about house ownership in this country? Other European countries do not aspire to own their own home, Switzerland for example had 41% home ownership in 2019 (random internet search), Germany 51%. The UK were at 65% but expect many more wanted to be on the ladder but couldn't for various reasons. Top was Romania with 95% home ownership!!! I own a house, but with no kids there is no-one to leave it to and it is going to charity when we die so why did we bother? Could have rented and saved ourselves a fair bit of money and not had to worry about working so long - was in Military and didn't buy until almost 50, but it just seemed to be the thing to do. Was it security, status, can't really say.
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Both of my children were renters and were persuaded to buy simply because what they paid in rent was a lot more than what they subsequently paid in mortgage interest.

The same thing applied to my wife and I in the 70s.

My mortgage originally was paid off in my early 50s. Nice to know you have to pay neither rent or mortgage and with a good asset if I need funds for something in the future.
 
Neilds said:
What is the big thing about house ownership in this country? Other European countries do not aspire to own their own home, Switzerland for example had 41% home ownership in 2019 (random internet search), Germany 51%. The UK were at 65% but expect many more wanted to be on the ladder but couldn't for various reasons. Top was Romania with 95% home ownership!!! I own a house, but with no kids there is no-one to leave it to and it is going to charity when we die so why did we bother? Could have rented and saved ourselves a fair bit of money and not had to worry about working so long - was in Military and didn't buy until almost 50, but it just seemed to be the thing to do. Was it security, status, can't really say.
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The stat pension In this country is pathetic and so many people don't have enough pension for retirement

How will they afford rent?

Least if you own your house by then it's one less bill
 
oxymoron said:
Not getting my knicker twisted, just glad you clarified what you mean , not decent people but people who are decent at their job .
Good to see you are employing in this economic time , nice to hear of someone doing well enough to employ extra staff .
We are really struggling to find suitable candidates for an opening at one of our sites .
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Of course I meant people who are decent at their job.

Finding suitable candidates is always a challenge. As is landing new projects. Some regions are doing better than others, but at the minute we are doing ok.

Price rises for materials and labour are killing our margins through.
 
Neilds said:
What is the big thing about house ownership in this country? Other European countries do not aspire to own their own home, Switzerland for example had 41% home ownership in 2019 (random internet search), Germany 51%. The UK were at 65% but expect many more wanted to be on the ladder but couldn't for various reasons. Top was Romania with 95% home ownership!!! I own a house, but with no kids there is no-one to leave it to and it is going to charity when we die so why did we bother? Could have rented and saved ourselves a fair bit of money and not had to worry about working so long - was in Military and didn't buy until almost 50, but it just seemed to be the thing to do. Was it security, status, can't really say.
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My grandparents, dad's side, rented all of their lives, died in their early 80's. My mortgage will be paid off in 4-5 years time, I will be 55. If I get to their age, I will be miffed if not :D, then that will be 25yrs + with no major payment going out for the roof over my head. The cost of paying rent never ends. Rightly or wrongly, houses are also a fabulous investment, if bought in the right area. Both my mum and my in laws bought okay houses in what turned out to be great locations. Their houses are now worth a decent chunk, giving them the flexibility to downsize and spend on themselves, leave to their kids, pick the care home of their choice. None of that happens with renting.

To buy or to rent seems to be a cultural thing, country to country, but in the UK buying is king and really does make sense. I'm not saying it is a good thing for everyone but financially, in the UK, it is the best thing to do.

In terms of a bubble, we go from one boom to another and lessons are rarely learnt. Northern Rock anyone? Not that long ago, lending was tightened up. Now they are doing all they can to get people borrowing again and they are lending pretty recklessly at times. I'm pleased I am not starting out.
 
Some thoughts...

Organisations will be far more open to "remote working" when a multi million pound bill lands on them to renew a lease on a building that 2020 proved they don't actually need!

Low interest rates designed to protect a fragile economy always heats up the housing market... for those in work and assuming the banks feel like lending! Low interest rates mean naff all margin for banks, so they focus on fee income.

I say a meme today which said... "My bank doesn't think I can afford £1000 per month for a mortgage, so they leave me paying £1500 in rent!"

People who are sensible with money are less likely to end up in the doo-doo than those who are not. But we all know folk who are an exception! :-)
 
Lord Tyrion said:
My grandparents, dad's side, rented all of their lives, died in their early 80's. My mortgage will be paid off in 4-5 years time, I will be 55. If I get to their age, I will be miffed if not :D, then that will be 25yrs + with no major payment going out for the roof over my head. The cost of paying rent never ends. Rightly or wrongly, houses are also a fabulous investment, if bought in the right area. Both my mum and my in laws bought okay houses in what turned out to be great locations. Their houses are now worth a decent chunk, giving them the flexibility to downsize and spend on themselves, leave to their kids, pick the care home of their choice. None of that happens with renting.

To buy or to rent seems to be a cultural thing, country to country, but in the UK buying is king and really does make sense. I'm not saying it is a good thing for everyone but financially, in the UK, it is the best thing to do.

In terms of a bubble, we go from one boom to another and lessons are rarely learnt. Northern Rock anyone? Not that long ago, lending was tightened up. Now they are doing all they can to get people borrowing again and they are lending pretty recklessly at times. I'm pleased I am not starting out.
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I could rent a 3 bed, 2 bathroom semi-villa here for €565/mth, or a decent 2 bed apartment for €300/mth. If I sold the house I’d have 40 years rent, taking me over 100 yrs old. Inflation would get in the way but interest rates on investments would cover that. Buying in the U.K. makes sense, with rents being so high, but does it make sense here…?
 
surely the real elephant is the amount of money various governments have printed over the last 18 mths, where that money has ended up and the effect it has had on the majority of asset classes prices due to the sheer volume of inflow of money some of them have seen
 
fundy said:
surely the real elephant is the amount of money various governments have printed over the last 18 mths, where that money has ended up and the effect it has had on the majority of asset classes prices due to the sheer volume of inflow of money some of them have seen
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spot on. This is the route cause of keeping borrowing costs down for governments, comapnies and consumers, and is the fuel behind the inflation boom that may happen (if it is not temporary). Then we have significantly rising costs for everyone and the asset bubble is over. QE needs to end now as the longer the tap stays on the worse the fire
 
Hobbit said:
I could rent a 3 bed, 2 bathroom semi-villa here for €565/mth, or a decent 2 bed apartment for €300/mth. If I sold the house I’d have 40 years rent, taking me over 100 yrs old. Inflation would get in the way but interest rates on investments would cover that. Buying in the U.K. makes sense, with rents being so high, but does it make sense here…?
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Absolutely, different in different countries. That amount, based on current exchange rates, is around £485 a month. I did a quick look in Newcastle, and that gets you a 1 bedroom ground floor flat, grim looking as well. In some cases it only gets you a room. Renting sounds the way to do it where you are. Can you ditch the British mindset about buying though? :D
 
IanM said:
Some thoughts...

Organisations will be far more open to "remote working" when a multi million pound bill lands on them to renew a lease on a building that 2020 proved they don't actually need!

Low interest rates designed to protect a fragile economy always heats up the housing market... for those in work and assuming the banks feel like lending! Low interest rates mean naff all margin for banks, so they focus on fee income.

I say a meme today which said... "My bank doesn't think I can afford £1000 per month for a mortgage, so they leave me paying £1500 in rent!"

People who are sensible with money are less likely to end up in the doo-doo than those who are not. But we all know folk who are an exception! :)
Click to expand...

When I have been working retail credit reviews for some of the banks, this comes up a lot. And on one side of the coin the customer's have a point. What the bank isn't transparent on is that using the stretch calculations, that £1000 payment can sometimes be pushed out to £1750 - 1800 due to volatile interest rates. They then give this glib "affordability" reject to the customer which, on the surface makes no sense, without explaining the context.

I saw a couple of occasions where interest rate instability caused stretch payments to be over double the "standard" rate. But they do need to be more transparent IMO.
 
Hobbit said:
I could rent a 3 bed, 2 bathroom semi-villa here for €565/mth, or a decent 2 bed apartment for €300/mth. If I sold the house I’d have 40 years rent, taking me over 100 yrs old. Inflation would get in the way but interest rates on investments would cover that. Buying in the U.K. makes sense, with rents being so high, but does it make sense here…?
Click to expand...

Spot on

Rent round here for my house looking about £1,750 a month

Mortgage £1200

And that's including a second mortgage to pay for the loft extension
 
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