MoneyWeek TV: What’s in store for house prices?

This week, Merryn Somerset Webb and John Stepek explore the reasons behind Britain’s stubbornly high house prices. And 2013 sees the average baby boomer turn 55. International eChem chairman Paul Hodges explains why this anniversary is significant for investors.

Read more on some of the subjects mentioned in this week’s programme:
Video tutorial: Six things every investor should know about ROCE
Why house prices aren’t all they seem
Had it with low bond yields? Blame the baby boomers

21 Responses

  1. 03/05/2013, MrPricklepants wrote

    With House prices it depends where you are. My property in the SE has gone up 20% in the last year. However, my friend Percy, who lives in Oldham, has seen the value of his property in Oldham drop by over 10%

  2. 03/05/2013, Rennie Duggan wrote

    Watched for the first time, good program..
    If you have any money to invest at Oney Week, put it into the set design.

  3. 03/05/2013, Tom Roundhouse wrote

    Very interesting folks. Keep it coming.

  4. 03/05/2013, Alan Todd wrote

    Diction poor. Difficult to hear. Also Merryn did not let John complete his coments and talked over him.

  5. 03/05/2013, NeutronWarp9 wrote

    Apart from size of salary, bank balance and, perhaps, type of car the only other barometer of success / worth for many a Briton seems to be the value of their house – even if a pound sterling is increasingly worth peanuts. Politicians know this and hence nominal values will be protected at all costs.

  6. 04/05/2013, Boris MacDonut wrote

    #5 Neutron. The ONS has the total worth of the UK’s citizens at £8.3 trillion,with o/s debt of £1.4 trillion. The total for houses is £4.1 trillion so just under half. The rest is pensions, investments, other assets, antiques….For the average Joe about 58% of his wealth is in property.

  7. 04/05/2013, Christy wrote

    Enjoyed the piece on demographics, although I think an important issue was missed in primary school planning, which is apparent were I live. There has been a large influx of immigrant families which has increased the need for additional places. This presents a considerable challenge for the local authority as they are unlikely to have recieved 5 years notice of placing requirements.

  8. 04/05/2013, Boris MacDonut wrote

    #7 Christy.No. Since 2009 the driver of population growth has been birth rate, not immigration. Immigrants tend to be adults, who don’t go to primary school. UK birth rate has risen 12% in the last 4 years.
    Merryn/John are confused by demographics. They quote US baby boom stats. In the UK there was no real post war baby boom save a modest increase in births from 1946 to 1949. The big increase inthe UK was from 1957 to 1971, peaking in 1962.
    The average US boomer is now 57. The average UK post war boomer is aged 66 and 60′s boomer is 49. The real Boom year was 1920 when we had 960,000 births and only 40 million people. The social services problems began when that cohort hit 70+ in the 1990′s.

  9. 04/05/2013, Boris MacDonut wrote

    Pension age for those born in 1964 is set to be 68. The crunch years ought to be after 2030. It is easy to chart the real UK baby boomers as they went out to work or to University in, large numbers from 1976, bought houses (and cars) from about 1985 and had kids from about 1988 (the echo boom). They also pushed the crime figures up in the 1980′s and 90′s and began divorcing in 1994 as they struggled to cope with being 30+.
    But the average UK boomer is not now 55.

  10. 04/05/2013, Boris MacDonut wrote

    Merryn seems a bit spooked when Paul reminds her interest and bond rates are at the long term average since 1704. But he is correct.
    The average boomer bit only applies to the US. We have 9.2 million people in their 40′s and 7.8 million in their 50′s, so we are looking at beyond 2020 for the problems Merryn suggests may hit this year.
    UK population rises due to higher birth rates and longevity, not immigration. Population has risen as much in the last decade as in the previous 36 years. This is the major pressure on housing. John is wrong to allude to a normal affordable level

  11. 05/05/2013, me88 wrote

    Disagree about the population rise. Where I live population has rise greatly over the past 10 years. Most of this is immigration, most of the female immigrants either bring children with them or have babies once they arrive as they are the key to welfare.

    We have pressures on schools, non English speakers etc. This is costing tax payers huge amounts – oh and high numbers of unemployed as well.

    I am with UKIP – stop all immigration

  12. 05/05/2013, Boris Macdonut wrote

    #11me88. No you are wrong. You are saying that because of what you see on your doorstep you must be correct in the matter of the whole UK. But you are not. This is the fatal flaw of the simple types that support UKIP. They cannot see beyond their own noses.
    I am quite cross that UKIP won a few votes at the council poll. It seems to me it was co-opted by gut racists. It is much easier to malign incoming white folk than actually voice concern at the people who are not white. UK mpopuilation rises because of birth rates and longevity, NOT immigration however much you dislike foreigners..

  13. 06/05/2013, Segedunum wrote

    @7: Boris

    Birth rates have naturally increased with immigration. If you were to delve into the uncomfortable statistics you don’t want to find you’ll find that birth rates are much, much higher amongst immigrant families – and that is an across the board truth.

    That is just the way things are I’m afraid people are certainly concerned on the pressure that puts on resources. Telling everyone that everything is fine will not work although that is sadly something that will continue because it’s the only way certain people know how to respond.

  14. 06/05/2013, Boris MacDonut wrote

    #13 Segedunum. No. I accept that birth rates are high among some ethnic minorities,especially Moslem and Polish people. However, many of these are not immigrants. The majority are second and third generation British, born here. The proportion of immigrants is very small,only 2.5million but there are 8.5 million ethnic minorities in the UK most of whom have similar birth rates to the White British who have seen a higher birth rate than any time since 1988. Part of this is women having babies later in life ,with a big surge in births to over 35′s.
    I fear you have read too much Daily Mail and confuse ethnic minorities with immigrants. Even if every immigrant woman in the UK had 10 babies in the next 10 years it would not match the numbers produced by British citizens.

  15. 06/05/2013, Boris MacDonut wrote

    #13 sege’. I hope you didn’t pick up your cod “across the board truths” from the UKIP propoganda machine. These are dangerous people who should be kept away from serious issues for fear of making a shallow political pond even shallower.

  16. 06/05/2013, Segedunum wrote

    Oh dear. I’m afraid your quoting figures in an apparent effort to throw mud into the pond. You can shift goalposts as to who an immigrant is to your heart’s content. Not washing. Heads buried sixty feet under in the sand, as I see most people interviewed on the BBC today are about the elections, which will only make things several times worse.

    Among native British people the birth rate has absolutely free-falled, and that is a well accepted trend over many decades. But, people see limited school places and even more stress placed on the NHS, but it’s OK because it’s not really happening.

    Like I said, telling everyone that everything is fine simply will not work.

  17. 07/05/2013, Jay wrote

    Citing baby boomers and demographics as the cause for lack of future growth is ingeniously unrealistic. Sure, it contributes a small influence, no more. It swamped by massively more significant factors such as old tired lazy complacent Western economies being out-competed by young dynamic energetic opportunistic Asian economies. They make almost everything now, we merely consume it, they are getting slowly richer,we are getting slowly poorer.

    There will come a point when increasing Asian wage demands reduces competitiveness so that manufacturing returns to the West. The realization needs to dawn that Asian goods are poorer in quality and the purchase of them is false economy. Until then look forward to zero to negligible growth, boomers or not.

    Please don’t use the TV program to run irritating meaningless trailers for the admirable Tim Bennett’s tutorials, especially the wearisome long run ins. There are sufficient links to the tutorials elsewhere on the web site.

  18. 07/05/2013, Glen wrote

    Have I heard this correctly? It appears that Money Week have changed their tune regarding a house price crash. They have now accepted that the UK Government will do what ever is neceessary and at any cost in order to prop up house prices until inflation catches up.

  19. 07/05/2013, Boris MacDonut wrote

    #16Segedunum. I do not apologise for “quoting figures”.What would you have me do make them up?
    The fecundity rate for white British women is now above 1.75 and for all British it is 1.92. Higher than for 20 years.
    Please explain on what you base your assertion that native British births are in free fall or is it merely wishful thinking?

  20. 07/07/2013, Boris MacDonut wrote

    2013 sees the average UK baby boomer turn 48 and the average US one turn 58. In Germany the typical boomer is only 40. Who makes thses articles up?
    My post #8 is slightly out. The years of the baby pop, were 1946 to 48 only. Then the UK baby bulge was from 1957 to 1973, peaking 1964/65.

  21. 14/07/2013, Boris MacDonut wrote

    I am rather concerned at the negligence shown by the authors here. I have clearly pointed them to the correct facts about the myth of a UK baby boom and how the figures they quote a re wrong. They should either accept they are incorrect or explain why they think they are right. For the average UK boomer to be 55 would put the putative babyboom in the years 1946 to 1945 to 1968 like in America. But that did not happen in the UK. In fact over the next 7 or 8 years Britian can look foraward to fewer and fewer retirees claiming the state pension as our birth rate fell rapidly from 1948 to 1956 and only 85% of those born in thosae years are still alive to collect the pension. Hodges is badly wrong because he co-opts Us problems onto the UK. Misinformed you see and too lazy to check.

Commenting on this article closed

MoneyWeek magazine

Latest issue:

Magazine cover
Don't be spooked by Putin

Take a punt on eastern Europe

The UK's best-selling financial magazine. Take a FREE trial today.
Claim 4 FREE Issues
Shale gas 'fracking' promises to transform Britain's energy market. Find out what it is, what it means, and how to invest.

Which investment platform?

When it comes to buying shares and funds, there are several investment platforms and brokers to choose from. They all offer various fee structures to suit individual investing habits.
Find out which one is best for you.