to wonder why house prices are so high if the economy is so bad?

(64 Posts)
RattyRoland Sun 24-Feb-13 07:03:55

I have been looking at three bed family homes in the area I live. Nothing amazing, just semis with a reasonable lounge and three ok sized bedrooms and small garden. They are around £750k shock about five years ago they were about £500k, property websites confirm this increase. No way can I afford 750k!

So Aibu to wonder how the property prices have risen so much when all we hear is the economy is dire? I live in south west London/ Surrey.

FillyPutty Sun 24-Feb-13 15:14:06

Excessive immigration, property speculation, unreasonably low interest rates: many reasons.

FillyPutty Sun 24-Feb-13 15:22:05

Here's an article by the BBC celebrating this:

www.bbc.co.uk/news/uk-21511904

Basically: mass immigration into central London causes existing white British population to move out the counties, where they bring their inflated London house price cash to buy properties there.

Of course anyone who doesn't already own a house is fucked, but hey.

Viviennemary Sun 24-Feb-13 15:30:10

I don't quite understand why prices are so high when the economy is bad. But I think it's a lot to do with exceptionally low interest rates. And the banks won't want lots of people defaulting on their mortgages. And what the banks want seems to go. That's my opinion anyway.

FillyPutty Sun 24-Feb-13 15:34:31

Around 2 million more people into the South East in the last decade. Have they built a million more homes? I doubt it.

Frogman Sun 24-Feb-13 16:44:22

We don't know what effect the reduction of the UK's AAA credit rating might have. Might be that interest rates rise again.

Might just be the catalyst we need. (sorry, but savers have been royally shafted). We do need house prices to come down.

andubelievedthat Sun 24-Feb-13 22:09:48

And factor in (for the near future) "quantitive easing" A.K.A. printing money that hasn"t been earned ,there is a mighty bill coming our way !

Beaverfeaver Sun 24-Feb-13 23:52:23

Yanbu:
We are thinking of selling our small 2 bed cottage to move to larger three bed cottage.
Whilst ours is approximately £280k, anything worth buying as a small step up is easily £350-£400k + !

Beaverfeaver Sun 24-Feb-13 23:53:46

To add, we only bought ours 3 years ago for £225k, so it really shows how prices are rising fast in the area.

Also in the south east.

FillyPutty Mon 25-Feb-13 00:56:45

Yep, that's the problem beaverfeaver. Your house is gone up, but that only makes the next step up a bit further away.

Those who benefit from this are:

* the dead (their heirs, at least)
* the government (taxation)
* people selling up to emigrate
* debtors, who remortgage to fund profligate spending.

For most people the knowledge that their £100k house is now worth £200k isn't really a good thing.

Beaverfeaver Mon 25-Feb-13 01:12:11

Exactly, and the worry for me is if it keeps it up in this increasing trend, we will eventually be stuck in our first house and not able to move

Frogman Mon 25-Feb-13 09:28:42

Beaver, it sounds like you must have done some fantastic work on your home for it to have increased in value by fifty-five thousand pounds in only three years. What tips do you have? What did you do?

Beaverfeaver Wed 27-Feb-13 08:13:47

Frogman: Bought a run down hope that had been rented by people who wrecked the place. We put a very low offer in in the first instance which was accepted.
The house had fag burns and broken windows but it was just cosmetics really, enough to put people off buying it at a standard amount though.

Then we deep cleaned the place, fixed broken windows, reprinted everything, bought furnitue that fits and shows off the houses potential, increased storage and just generally made it look a lot more loved.

Easy peasy

Does also help that we are in a town that house prices have still been on the consistent rise and do not stay on the market for long

MoodyDidIt Wed 27-Feb-13 09:52:28

OMG op a 3 bed semi in my area would be about 75k according to zoopla

crazy

(sorry not very helpful blush )

Paradisefound Wed 27-Feb-13 11:30:43

Supply and demand.
Lots of foreign investment in uk property, as investors in the EU and US don't want to invest everything in euros and dollars.... Buying up houses.
Lots of young Europeans finding work in uk... Need more houses.
General immigration ... Need more housing.
Birth rate booming..more need bigger houses.
More people than ever living on their own.. Need more houses
Social housing supply insufficient... Need more houses

Need more houses = price rises. In some areas prices have fallen sharply...less demand, no jobs/ fewer opportunities.

Future...concrete jungle!

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