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.

acrabadabra Sun 24-Feb-13 07:13:34

I haven't a clue tbh but, where I am, prices have stalled (central Scotland, less than an hr from Edinburgh and Glasgow).

Supply and demand is generally what controls the price of things. My guess is there's a hell of a lot more jobs/money where you are than were I am. And, a hell of a lot less houses!

3 bed semi in my town would be less than 200k. Not so nice areas probably just over 100k.

HollyBerryBush Sun 24-Feb-13 07:16:19

Because we live in an affluent area? I doubt they are rising that much in Durham or Burnley.

acrabadabra Sun 24-Feb-13 07:16:56

where

lauriedriver Sun 24-Feb-13 07:22:16

we bought our 4 bed semi last year for just under 100k, makes me gasp when I hear about England house prices. We're central Scotland....maybe not so nice area to an outsider but we love it here

TheFallenNinja Sun 24-Feb-13 07:22:31

Speculation/stupid estate agent valuations/unrealistic vendors/I don't really want to sell it price/the price I NEED/

All the bullshit reasons that the housing market is a shark infested pit.

havingamadmoment Sun 24-Feb-13 07:27:09

We live in a not so nice area in the north west. The house prices if you are buying are between say £100,000-200,000 for a 3 bed. The problem is wages are very low, unemployment is high and so most people I know can no more afford that than they could £750,000.

Personally we saved £25,000 for a deposit but despite asking pretty much everyone we can't get a mortgage for enough money to buy a house as our income is not high enough. So we are stuck renting . Of people my age (20s) I don't know of anyone who owns their house here they all rent.

House prices here have not gone down, but houses don't appear to be selling much either . The same house are for sale now as 6-12 months ago.

Alongside this rents have skyrocketed. Despite the low cost of housing the rents average around £750-900for a 3 bedroom house. Not because they at lovely or in a good area just because there is So much demand and few properties to rent.

We have been trying to find a new house to rent for months but every time one comes up there are multiple applicants and you end up competing for the contract.

I have no idea why the prices to buy have not gone down they seem to be based on fantasy!

Marcheline Sun 24-Feb-13 07:27:18

Yanbu, DH says that house prices will probably stall very soon and the Market will re-adjust to bring itself in line with the economy, as prices are unsustainable.

However, I think people are too greedy and have been expecting huge returns on property for too long, so sellers are unlikely to want to price their houses more realistically. Particularly where you are. At the end of the day, if there is someone willing to pay for the house at that price, the house is 'worth' it. In barnes / Richmond ( guessing that's approx where you are) people will pay those prices.

It's not right, though. Our housing Market is totally fucked.

Artichook Sun 24-Feb-13 07:27:59

In the South East there aren't enough houses and there are a lot of people. It's simple supply and demand. Plus the SE has the highest wages so people can afford more. And we have more jobs so more and more people are moving into the area. Finally mortgage rates are still v low so it makes financial sense to buy and pay a mortgage rather than rent (rental rates in SE make this even more true).

Artichook Sun 24-Feb-13 07:30:58

Those saying its to go with greed, it's not really, it's not greedy to sell at a price people will buy at, to do otherwise would be financial suicide. House in SE are selling quickly so they must be priced to reflect the market.

Speedos Sun 24-Feb-13 07:34:12

Supply and demand in the south east plus SW London/Surrey because of the mini baby boom since 2007 means everyone has wants these areas for schools as those babies are now school age.

Speedos Sun 24-Feb-13 07:35:54

Posted too soon - our DS was born in zone 1 in 2008 and every family we knew (prob 15 or more) has moved to the home counties in the past 5 years.

HollyBerryBush Sun 24-Feb-13 07:36:19

According to Halifax, house prices are going to keep on rising until at least the end of the decade, to average 1/2 million in the south east. Thats doubling in most areas over the next 7 years. (The SE being more than just London)

FamiliesShareGerms Sun 24-Feb-13 07:38:20

All the above, plus interest rates at historically low levels (and likely to remain so for a while, most experts suggest) means that people with mortgages can mre easily continue to pay them even if other costs etc rise and income falls.

Plus in London and other parts of the SE there is an influx of people from outside the UK who have wealth to buy expensive housing and who are largely unaffected by our domestic economic problems.

RichManPoorManBeggarmanThief Sun 24-Feb-13 07:43:31

Because interest rates are low so money/credit is cheap and people can afford to borrow lots and service that debt (i.e. pay the interest on it). If interest rates rise, house prices will fall very quickly.

That is the crux of it.

HollyBerryBush Sun 24-Feb-13 07:45:38

I've been watching a history programme on Sky Bizarrely Obscure, following the social rise and decline of some of the more famous streets of London. This weeks was Caledonia Road - that largely has been bought lock, stock and barrel by a Cypriot who came to the UK with 60 quid in his pocket in the 1960's and created a property empire.

He buys shops and converts the upstairs accommodation into bedsit land. But he also does it with the basements. 300 quid a week, in a poor area, for a room in an underground bedsit. They are usually taken by backpackers working in bars, sleeping in shifts and 'hot bedding'.

Thats 1200pcm in rent for a dingy room that breaks every planning law going. Very jaw dropping as to what people will pay.

bluer Sun 24-Feb-13 08:18:10

Rural town in Scotland half hour from a small city and an hour from Glasgow and Edinburgh. Detached four bed bungalow with huge garden and views...164000 two years ago. And that was top end of budget. I feel so sorry when I see the prices elsewhere.

lotsofdogshere Sun 24-Feb-13 08:28:54

We're in the north west, north manchester on the edge of the moors. The area has spread from 4 villages but they now almost meet each other as the suburbs have spread. It has been a great place for the children to grow up, with manchester 12 miles away but open countryside here. House prices generally continue to drop, but it is still very difficult for young people to buy because wages are low, jobs hard to get and deposits too high. The result is lots of houses for sale over a couple of years, and many being rented rather than sold. The north south divide is growing and can't be good for anyone, anywhere except those who manage to buy in the south east, and then sell and move to a less expensive housing area (if they can get work) It's grim isn't it!

HollyBerryBush Sun 24-Feb-13 08:33:20

Again with it being half term, I've caught a couple of the property programmes.

You sell a pokey 3 bed mid terrace house in London for 400,000 (In an area wild horses wouldn't drag me into in the first place) and wander off into the wilderness and the same money buys you a 6 bed Victorian cottage, complete with 17 acres, an annex, a trout pond and a set of stables.

All very idyllic - except these people are mainly about 10 years away from the probable onset of ill health - and who the hell wants to live half way up a mountain, with no neighbours and the nearest supermarket 2 hours away (or 2 weeks if its snowing) - plus it might be a lovely cottage - but do you really want to be starting up a B&B at 60?

Marcheline Sun 24-Feb-13 08:36:26

I think a lot of problems have been caused by collective greed, tbh. Just before the crash, people were getting 110% mortgages, borrowing more than they could afford to, and making money just by buying a property, waiting for a few moths and then re-selling it for £50k more than they paid. Yes, it was a sellers market and property can o ly sell for what someone is willig to pay for it, but people's greed was what was driving up prices. Estate agents were going into people's houses, Over valuing massively, and people didn't argue. No one said 'I think that's too high'. No one complained when they sold heir houses at a huge price.

Even now, after all that's happened, mentality hasn't changed. There's a bloody rightmove ad on the telly with the line 'get the house you deserve'. People are greedy, and companies play on that. Who is at fault?

I think you must be looking in really very very very nice places that are an exception rather than a rule. I live in the south east and you can get a house like you describe for less that £200,000 in a nice area.

racmun Sun 24-Feb-13 08:43:33

You are not being unreasonable it is crazy. In the South East lots of couples/young families are moving out of central London into Surrey. Central London prices are booming because of Foreign investors and that is filtering through.

Also i think house prices are really over inflated now due to dual income families and cheap mortgages.

Now nearly every household has 2 people earning, over a couple of decades this has meant that families can 'afford' to pay more for a family house and due to supply and demand prices have risen.

Also interest only mortgages have a lot to answer for, in that people can pay over the top for a house without ever being able to fully pay for it- if interest only mortgages hadn't been allowed I wonder if we would have seen such a boom- also I think the chicken will come home to roost for some people when they wake up and realise in 10/15 years that they haven't paid off their mortgage and still owe hundreds of thousands- no doubt it will be another mid selling scandal like endowment mortgages.

XiCi Sun 24-Feb-13 08:52:53

There will always be areas that are more expensive/desirable than others. If you grew up in an afflent area chances are that you will have to move away to get your foot on the property ladder.

XiCi Sun 24-Feb-13 08:53:20

Affluent

chandellina Sun 24-Feb-13 08:53:35

Yanbu, the market by rights should have corrected in the crisis after having more than doubled because of prolific lending at high earning multiples. However cutting rates near zero kept existing mortgages affordable and prices only fell 20 percent from their peak nationally, and are up in desirable parts of London / southeast. Banks have also kept a lot of people in their homes who can't afford repayments, but it's politically preferable to mass foreclosures, and allows banks to avoid crystallising losses.

I'd expect prices to continue to stagnate in most areas, though there are always little pockets where people flock.

XiCi Sun 24-Feb-13 08:55:13

And I don't mean that you have to move to the ends of the earth, there is usually an artea with cheaper house prices nearby especially in a major city

hazleweatherfield Sun 24-Feb-13 09:03:28

I was looking through the estate agents reports on rightmove the other day. In an ex pit village near where I live in the north east, someone has been trying to flog a three bed mid terrace for £140k for the past three years. They only paid £35k for it in 2004 yet they've obviously decided they "deserve" a £100k profit.

If it wasn't so depressing it would be laughable.

HollyBerryBush Sun 24-Feb-13 09:04:52

Average prices across all London boroughs. Some surprises in there.

news.bbc.co.uk/1/shared/spl/hi/in_depth/uk_house_prices/counties/html/county39.stm

AngelsWithSilverWings Sun 24-Feb-13 09:04:54

I'm amazed at this too. We bought our home 5 years ago just one month before the Northern Rock went under and a year before the banking collapse.

We paid £430k after selling our previous house for almost three times what we had had paid for it 8 years earlier We assumed we had bought our present house at the peak of the property boom.

Now we are seeing similar houses to ours in the area being marketed for £599k - it's ridiculous and I very much doubt they will sell at those prices.

There does seem to be a lot of young affluent families from London moving to our area as it's an easy commute into The City from here and there are excellent schools. I think that has pushed local house prices up.

You can't lump all of the south east in together. I'm in a 3bed semi, bought last July for £160k.

CogitoErgoSometimes Sun 24-Feb-13 09:17:24

"someone has been trying to flog a three bed mid terrace for £140k for the past three years. "

The seller is being stupid rather than greedy holding out for an unrealistic price.

I think a big part of the problem is the disproportionate concentration of commerce and population in the SE which has created a hothouse bubble of good job prospects on the one hand but huge living costs and high house prices on the other. If any government is looking for ways to generate growth it would be to set about deliberately developing the other big cities of the UK, relocating big government departments out of London the way the BBC has relocated, putting serious tax incentives in place for companies to set up far away from the M25 and putting capital investment in supporting infrastructure such as airports, road and railways. Make Newcastle the job hot-spot and lure people in with the promise of trading in the poky 3-bed semi in the Home Counties for a luxurious five-bed detached in Tyneside... why not?

HollyBerryBush Sun 24-Feb-13 09:29:37

Weather - on average you are 10 degrees lower than London and have 25mm more rain than London.

Ergo, it's cold and wet up north grin

FarBetterNow Sun 24-Feb-13 09:29:54

Fifty years ago a low paid worker could not only pay the rent on a reasonable house, but pay all the other household bills too, whilst his wife was a SAHM.
In a way Housing Benefit has facilitated the increase in house prices.
If it didn't exist then rentals would have to be lower.
So did the 'wonderful' Mrs Thatcher who created a free market by selling off council houses.
Banks benefit enormously by the high cost of houses, the interest payable from a £200k mortgage is a lot more than a £100k mortgage.
Redrow made £43m profit last year.
Capitalism at it's worst.
High house pri

HecateWhoopass Sun 24-Feb-13 09:33:49

Houses, like everything else, are worth only what people are prepared to pay. Not one penny more or less.

So they will go down when nobody is willing to buy at the prices they currently go for.

Which will mean that a lot of people will make a huge loss.

Which is why people are reluctant to let that happen. Many buyers are also sellers. Nobody wants to make a loss.

alabamawurley Sun 24-Feb-13 10:07:50

HollyBerryBush, the report you refer to was talking specifically about London and it didn't say prices would double, rather they would rise by 30% - so around the rate of inflation.

Also, it wasn't the Halifax, it was the CEBR, who you'll find were predicting similar in early 2007-before prices EVERYWHERE fell by around 20% - and yes that includes London and the South East.

Fact is, high prices are being sustained (at least in parts of the S.E.) by a number of artificial and ultimately unsustainable measures e.g. Funding for lending, historically low base rates, bank forebearance, several stamp duty holidays etc. and in case anyone hasn't noticed, we as a country are broke-we need to spend less. And as more and more potential voters rent, political will is going to turn in favour of withdrawing these props.

ZenNudist Sun 24-Feb-13 10:41:20

I bought my 4 bed semi in a Manchester suburb (15mins drive from centre) in April 07. The other half of the semi just sold for £5k more than we paid for it. It's nice to know that prices have held up here.

Prices in commuter belt from London are high because London wages are high. It would be good for everyone if there was a move to decentralise jobs and spread the wealth out more evenly across the country.

CloudsAndTrees Sun 24-Feb-13 11:21:33

The problem has been lenders giving out mortgages that are more than people can afford.

People used to start small and move their way up the property ladder. When people started getting 100% mortgages they were able to jump the first couple of rungs of the ladder, but then they get stuck there. They can't afford to move up to a bigger house so demand increases for mid price homes.

People aren't being greedy by wanting to sell a house for £140k that they bought for £35k a few years ago. These people still need somewhere to live, and to get that they need significantly more than the £35k they invested.

Sellers aren't making a profit because they can't afford to upsize even if they house has quadrupled in value. The value of a house means nothing when you have to pay the same amount to move into a similar sized property.

In theory, I have made £50k profit on a house that I bought a few years ago, but it's not like I have spare money that I can now spend on holidays and shoes. That money doesn't actually exist, it's tied up in a supposed value of a house, and all the other houses have gone up in value by that much as well.

Startail Sun 24-Feb-13 11:30:16

Because there will always be just enough people with very well paid jobs or money inherited from family to be just that bit better off than the rest of us.

Anyone selling a nice house, who is retired or can commute just sits in their house until such a buyer comes along.

Startail Sun 24-Feb-13 11:37:59

Interest rates on savings are lousy, property is still seen as a safe investment.

The banks are being very risk obverse. They would much rather lend to some one who has just sold another house or inherited granny's bungalow than a first time buyer.

If the risk to the bank is nowhere near the cost of the house they don't care.

Mimishimi Sun 24-Feb-13 11:55:07

We're not in the UK but when we were looking to buy our first place, the bank we applied for the loan with said that they could lend us up to the equivalent of £600,000. We only wanted to borrow the equivalent of £75,000 because we already knew which place we wanted to buy. It was a 3 bedroom split level unit in an area that was not hugely popular then. It has become more popular since then due to a certain well-off immigrant community making it their base for restaurants, grocery stores etc. We had a deposit for about half of it. For a week, we kept getting calls from the bank agent about how we could get a much bigger place in a nicer area, buy a new car etc etc if we took out a bigger loan. Eventually, they reluctantly agreed to lend us what we originally asked for. This was in 2007 and pretty sure that banks were starting to try and rein in debt.

So I think one of the problems is that many people go to the bank and they think "Well hey, the bank says that they can lend us this much, and they know what they are doing, so we will take it!". That, of course, pushes prices way up beyond what most people could really afford if they were sensible with their finances.

Mimishimi Sun 24-Feb-13 11:58:09

Although the value of the unit has gone up quite a bit, if we wanted to sell up and buy elsewhere, the value of all the other houses has either gone up as well or, if not significantly higher than before, are still far too expensive for us to feel comfortable with.

hazleweatherfield Sun 24-Feb-13 12:16:43

People aren't being greedy by wanting to sell a house for £140k that they bought for £35k a few years ago. These people still need somewhere to live, and to get that they need significantly more than the £35k they invested.

That's a fair enough observation, but surely this just means they can not afford to move elsewhere? Trying desperately to attain the impossible is just driving up prices elsewhere. If everyone in their position sat tight and didn't sell just yet it would be easier for prices to come down to a much more sensible level. Then their £35k (plus a proportional profit, say £10k) WOULD buy them something else.

dikkertjedap Sun 24-Feb-13 12:25:05

It is not the asking price what is important but the price at which it sells.

In many areas, sellers egged on by estate agents are totally unrealistic. Those houses are not going to sell.

The UK has just lost its triple A rating, borrowing costs are likely to increase. The economy is still a quagmire. I would hold fire for a while.

However, there will be areas where prices are high and may even go up, like areas in Central London (lots of foreign buyers, Russians, Greeks etc. with plenty of money) and areas in good (and affordable) commuting distance to Central London.

The UK is a very capital centred country, everything happens in London, that is where most well paid jobs are, etc., as a result house prices reflect this. Really, it is madness as it destroys the rest of the country, but you get the politicians you (collectively) vote for.

CloudsAndTrees Sun 24-Feb-13 12:28:37

A lot of people are sitting tight and not moving, but I think it's that that's driving the prices up because it creates more demand for fewer properties at the bottom of the ladder, and at the same level.

There will always be some people that have to move, then when they can't sell without making a loss, they end up renting, meaning that there are even fewer properties available for those willing to buy.

It's craziness, and I can't see it getting better any time soon.

DontmindifIdo Sun 24-Feb-13 12:47:33

i would say with your area, you probably have a lot of people who either work in banking or industries that service the banking industry - that's prime area for commuters into the city.

5 years ago or so is when redundancies were happening in those industries, we make a lot of our money as a firm from banks, we did a round of redundancies in early 2009. that was the year DH didn't get a bonus and a lot of people didn't either even though under normal years, their same performance would get them a large bonus.

we moved in 2009 (Kent, good London commute), and I know our sellers made a loss but needed to move (divorce). Since then, prices have bounced back quite a bit.

It could be the people you are 'competing' with for the houses are people who are those who've weathered the redundancies in their industries, so aren't feeling the pinch now, whereas if you'd been looking in 2009/10, you might have found a relative bargain as that's when your area really was badly hit.

There's a lot of recruitment going on in the city again. There's a lot of confidence that those who've held on to their jobs are 'safe' from the economic storms. If you are looking at houses in the £750k range with an easy commute to London, you are looking at houses being sold by/to the sort of customers banks want; people who probably have large deposits, with secure highly paying jobs - in industries where they can easily move to another job should something go wrong with this one. It's everyone else who are screwed, I think we might see bigger gaps between types of houses/areas than we used to.

dikkertjedap Sun 24-Feb-13 13:24:32

I agree with DontmindifIdo if you happen to live in an area attractive to bankers/City people, then prices are likely to go up rather than down in the (near) future. Large bonuses are coming back again as no reform has taken place whatsoever, all mistakes are probably going to be repeated, but that is not going to help you.

Can you move to another area or extend your current house?

sarahtigh Sun 24-Feb-13 14:19:32

here in argyll 750k would buy a small castle, a detached 4-6 bedroom victorian pile with 1-2 acres is about 4-500K (same in glasgow but will small garden would be 6-800K)

but prices have dropped in last few years here at least 10% in our perfectly ok village with good school ex-HA 3 bed semis are 85-90K we are 1 hour from glasgow, prices go up as nearer glasgow

it is demand in SE that keeps prices high but it can not last indefinitely as I reckon SE is over priced and at some stage bubble will burst

DontmindifIdo Sun 24-Feb-13 14:34:26

BTW - "we're all in this together" doesn't mean "we're all going to feel the effects of the downturn equally". there are a lot of people who have very secure and well paid jobs, and right now their mortgage rates are low, any services they buy are competing for less business so if you can afford a cleaner/gardener/building work, it's a lot cheaper than it was 5-6 years ago. There are deals on cars, clothes, holidays, restaurants near us have vouchers pretty much every other week. If you have the money to spend, your money goes a lot further, therefore saving more towards a house deposit is easier to do.

Round here, only one of my friends DHs does'nt work in the City. Everyone gets the train every day and we are in a strange little bubble. It sounds like you live in a similar area. The prices are effected because for a lot of these guys, throwing more money at housing in a good commute location is the difference between being home for bathtime or not seeing their DCs in the week. It's worth it to someone who's cash rich and only needs a 3 bed house to accept they are effectively overpaying for space compared to other areas in order to get that quality of life.

Move away from commuter belts and watch the house prices tumble to closer to the average.

Wishiwasanheiress Sun 24-Feb-13 14:37:42

Because the price of tangible items like property, gold, silver etc is always more solid. People are prepared to pay for something they have confidence in and things like this doi not drop confidence.

Things like pound value fluctuate as people have more varied opinions. Usually more negative. Most people are positive around actual items.

Wishiwasanheiress Sun 24-Feb-13 14:39:44

Bubble in commuter belts will not bust. Demand will not cease. It will get more strained as salaries do not compete, but there will also be an upswing and then all this will be forgotten and change again.

Just cyclical.

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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