To think the housing boom has falsely made the U.K. think it was rich

[Upthebracket22]

The U.K. manufactures very little these days - we import a lot of things. Brexit really has caused a lot of export issues to Europe (which was our closest large market) for many businesses. I know people are talking about Ukraine a lot at the moment but actually it’s brexit that has also done a huge amount of economic damage.

A lot of the money rolling around in recent years has been created by the housing boom- people getting building work done, using the equity in their houses to buy cars & holidays etc. Everyone felt wealthy.

The cheap money is coming to an end and so people don’t feel so rich. It’s more expensive to borrow money accross eve board.

It really feels like the U.K. is going through such a shift - hopefully we’ll come out the other side but it feels bleak at the moment.

And yes I do blame the tories for a lot of this but Blair also as he started a lot of it too. And it was the 2008 financial crash that caused the low emergency rates we have been on too. Obviously brexit is Camerons fault.

I just don’t think basing a lot of your economic model on rising house prices has been a good thing!

Britain is a wealthy country. The majority of its wealth is in the hands of a tiny amount of super rich people rather than spread through many.

The divide between rich and poor is growing due to the greed of those few - e g, wages being kept artificially low for most workers and propped up by taxpayer funded benefits while directors and shareholders receive high dividends.

@SmokedHaddockChowder exactly. And it’s totally outrageous that large numbers of people (especially young people) are living in shitty Victorian rental conditions paying most of their wages to do so. It’s shocking.

The housing industry has been developed to feed the rich, whether that means the banking industry through mortgages or through the value of property going up. No one large group has really protested against this so has left to run unchecked.

London is only rich because wealth and decent jobs have been centralised there in the past few decades. There's a "brain drain" of highly education people from the regions because the big firms closed down regional offices/depots and centralised in London, meaning very few decent, well paid, jobs in the regions. Reporting profits etc also favours London which is where most head offices are located - the profits made by your local Tesco store don't get reported as profits locally, they're reported geographically where Tesco's head office is located!

It's no surprise that regions are "poor" when head offices have relocated in London, regional offices closed down, etc., meaning there are few, if any, decent local jobs for graduates in their home towns (or even their university towns for lots of Unis). Even Uni job placement schemes, summer internships etc are mostly in London (and a few other big cities) rather than the University town, and most graduate jobs are in London.

If firms moved out of London and back into the regions, then automatically wealth will flow back into the regions, simply because the well paid staff will be living and spending in the regions again!

Even worse are the Uni students paying £150-£200 per week for a small bedroom, en-suite toilet and shared kitchen in the new student accommodation blocks being built everywhere at the moment.

Only if those people that are going to uni are upskilling in terms of jobs.

What actually happened is the % people going to uni increased but the job market remained pretty much the same. So we now have people with arts degrees and 50K worth of debt doing jobs people with GCSEs used to do.

Oh yes, and a massive shortage of people with vocational skills like plumbing, bricklaying, electricians and nurses.

Because everyone must go to uni and et a media studies degree ...

Pretty much.

But ever increasing house prices is now at the core of our economic problems.

Prices are now to high for people in "normal skilled" jobs to afford a house. So if you can't even afford the house, why bother working in the first place.

The problem is that to return to balance some people are going to have to feel an awful lot of pain.

Its worth remembering they never hit the target of 50%, even now its just below 40. Plus nursung is a degree and forms a big chunk of the number of 18 year olds doing a degree.

But, generally, yes there are more graduates than needed in some subjects with big debts and its a real shame.

It's cheap debt in general tho.

Cars on HP. Never really owned
Personal loans
Credit spending online
Credit cards

Plus a large mortgage

All adds up to many people in dire straits very soon.

But I guess having equity in a home makes you feel like you can afford it.

But the equity will reduce now.

The only plus is youngsters many be able to get a foot on the ladder.

I was lucky enough to get a home in the early 90s crash

Ive massively benefited from that it's true. Now it's others turn.

Yep, we've now got a massive mis-match between the skills/qualifications that people have against the workers we actually need.

Far too many people with random degrees that don't have much workplace skill value and lots of jobs requiring skills that people don't have.

Hence the shortage of doctors, nurses, builders, plumbers, drivers, but a massive surplus of people with, say, humanities, degrees working in shops and call centres.

A couple of decades ago, we should have been looking at the jobs market and "matching" the availability of further education courses roughly in proportion to the likely job market. Sadly, we didn't do that, just pushed loads of people through Uni, taking degrees with minimal relevance to the job market.

I think it depends on your own situation
We are doing ok
I have a buddy who is a self employed electrician who earned 120k last year
Another is a stockbroker earns a mint
Another who is a sales director does very well
I was in Tw Ickenham the other day pubs and restaurants were heaving

@HeBeaverandSheBeaver

It's cheap debt in general tho.

Exactly so. But it was necessary so that the govt could give us the illusion of economic growth/prosperity. Throw cheap money at people and they'll go out and spend it (and more), which increases the country's "GDP" figures, to make it look like we're a prosperous country. Trouble is, at the same time, they completely forget/ignored the balance of payment deficit. In the 80s and 90s, the balance of payment was a big/important "marker" but somehow it started to be ignored - convenient that, at a time when we were always running a deficit due to the sheer volume of imports, i.e. money leaving the country! Then Brown giving away lots of money in the form of tax credits and virtually unlimited housing benefits, which drove house price/rent inflation, again, to give the illusion of a prosperous country. It's all smoke and mirrors. All completely unsustainable. We should have stopped it years ago before it got too bad, but politicians over the past 20 years have been incompetent, and just let things get more out of hand. Now the cards tumble as we're also hit with covid, Ukraine, climate change, etc. But it was always going to happen at some time. Successive governments just kicked the problems into the long grass.

Agree totally
Degrees in social studies
Psychology
International relations
May be interesting but are worthless in the work place
I have mate who is an electrician he charges £450 a day os booked until March
A decorator who charges £275 a day
Brickie £400 a day
But at school kids are told they have to go to collage and get a 50k debt to do social studies

I think a lot of parents have been used to pushing their kids to uni because in the past it is the right thing to do to get a highly paid job - in the past it didn't really matter what subject you did or where you went, it was a universal door opener.

My parents did the same to me, but I was lucky and chose STEM. If you choose STEM you get a wide range of career options when you leave. I was also lucky as I went to a Russell group uni (Russell group didn't exist then) which are much more highly regarded by employers.

I feel sorry for kids that are sold the lie that any course at any uni is the route to a high paid job. It simply isn't true. A degree in a non numerate subject is often just a ticket to a poorly paid job and 50ks worth of debt. As a student if you wish to pursue non STEM/numerate courses then that is of course fine, but you need to accept early on that these days that isn't necessarily a ticket straight to a high paying career and you may well need further training following university to land a higher paid job.

This is of course a generalisation. Some people with arts degrees do very well, especially if that degree is from a top quality university. But it is generally true.

A couple of decades ago, we should have been looking at the jobs market and "matching" the availability of further education courses roughly in proportion to the likely job market

I did a design degree in the mid 80’s. At that time they only took on nationally the number it students as there were vacancies within the industry. There were about 20 courses in the U.K. and about 15 people graduating from each course a year. So about 300 graduates, which sounds about right.

Now there’s about 50 courses with about 30 graduating each year. Not enough vacancies.

The bubble isn't just in housing, its in the Stock Market and other assets. We are facing "The Great Unwinding" with the end of cheap money.

In the crash of 2008 we were told if we just print more money and don't restructure another much worse crash was inevitable. So thats where we are, we just kicked the can down the road and now people are in more debt with more assets that will dive in price = poverty and misery. In America the Boomers hold something like 70% of the wealth because by pure chance they were the generation they got to ride the wave or sit on the Bubble as it blew up.

I wouldn’t say it’s worse at all, sounds far better, the purpose built accommodation shouldn’t have damp with drafty leaking windows, it should be warm and dry and relatively cheap to heat plus it’s nice to have your own private bathroom in shared accommodation.

The extortionate cost is the problem, plus having to pay for 46/50 weeks when you're only at Uni for 30 weeks. Someone is making serious money on the back of it. Charging for 46/50 weeks worth of utilities which most people don't use in the holiday periods. Around her your "drafty/leaky" house share would only cost around £100 per week. That's one hell of a difference!

Yes, it is a Ponzi scheme, isn't it?

Re degrees, hasn't it worked well for the boomer employers? Make the young person pay for their own training, where once it was 'on the job'/day release'. And demand a degree before you'll even interview.

Government wrings its hands (privately because of the massive student debt that'll never be paid off), so sets up the apprenticeship levy, so you can become an apprentice barista. Or childcare worker.

Our young have been sold such a pup, and we've all 'bought' into it.

when middle England think their house is making them 50k a year, they feel rich and think life under the tories is splendid.

I totally agree with this. I'm lucky to be a homeowner but I don't celebrate the bonkers rises because I know how despairing a lot of people in their 20s and 30s are about getting on the ladder. I also hate that people's lives and affluence are far more influenced now by how wealthy their parents /grandparents are (ie whether they can help with house deposits/whether they get a sizeable inheritance) than by how hard they work/ how successful they are at work.

@fordian you can get apprenticeship funding for professional roles too. In my team I have two lawyers being funded to qualify through the apprenticeship route. They are very impressive but come from backgrounds that mean they couldn't have afforded university. I also know of apprentice auditors and accountants in my organisation.

Housing, consistent inflation, low interest rates, pension, investment portfolios, index funds... it's a system that requires infinite growth to work properly. It's propped up artificially and there is nothing "real" behind London's financial "wealth", making it precarious by default. But the people with the most money and power have very vested interests in keeping the system running, for obvious reasons, so through them using every means in their arsenal by the skin of their fingertips to keep it running, it doesn't always seem that way. How long can it really last, though? The youngest generations are already feeling tremendous pain from this setup. It's a fascinating topic and I wish I understood it completely, I am fairly financially literate but not an expert by any means.

The uk gets wealth from services eg finance, science, consultancy and IT. Creative services too eg marketing.

However other countries are growing these areas and have moved since brexit so we will lose our edge in that. Brexit did huge amounts of damage in these areas, alienating talented internationals

The thing is that most employers still have to provide training as the graduate will either have an irrelevant degree (different subject) or the degree in a relevant subject simply doesn't give the skills needed.

In my 30+ years as an accountant, I've recruited a fair number of trainee accountants and can honestly say that graduates, even accounting degree graduates needed the same amount of training as the 18 year old school leavers we took on. There was very little difference in ability and skills. An accounting degree is far too theoretical to be of practical use in day to day accounting.

I didn't go to Uni, I took chartered accountancy qualifications via evening classes and day release alongside a full time job, after starting a job on the Monday after leaving sixth form on the Friday. I was a chartered accountant sooner than my contemporaries who went to uni (3 years) and then did their accountancy exams after graduating (3 years). I'd qualified within 4.5 years of leaving school!

An accounting degree doesn't make you an accountant, a law degree doesn't make you a lawyer. In one of my earlier jobs, none of the trainee accountants had degrees in accounting, one had a degree in traffic management, another had a music degree, another had a degree in geography - hence why full training still had to be given by the employer, and for that reason, they didn't look any more favourably on an accounting degree graduate as they did any other subject.

For even professional jobs, a university education and a degree don't really mean much. That's probably the problem. Fair enough for professions such as medicine and science/engineering where practical skills are taught in the Uni as well as the theory, but for a lot of degrees, they're little more than "tick boxes" as a means to progress through recruitment processes where an employer has specified a degree is a requirement, not for business reasons, but just to reduce the number of applicants.

Agree

i work in publishing and an English degree doesn’t prepare you for that job.

some degrees I’d say focus on what unis like to teach rather than what’s actually needed