Why don’t people understand that not everyone wants to buy a house?

I recall the downturn but what I posted is the actual house price data from the Land Registry. Where is your paragraph from?

The recession of the early 1990s

In 1989 and the early 1990s the western world experienced another period of economic downturn thanks to the US savings and loan crisis, restrictive monetary policies introduced by banks and building societies to curb inflation, the end of the Cold War and the 1990 oil crisis in the wake of Iraqi’s invasion of Kuwait. In the UK, house prices had also seen an artificial increase as a result of prospective homebuyers rushing to purchase property prior to the withdrawal of the MIRAS tax relief option in August 1988

All of these issues in turn had a knock-on effect on consumer and business confidence and rising interest rates which resulted in a fall in house prices of 20% between 1989 and 1993. Properties in London were the worst hit, with an eyewatering reduction in value of 32%.

I would love to know how much your rent is in zone 1, compared to paying a mortgage on the same property. I never see rent less than mortgages where I live. I think if you have the means to buy you would be stupid to rent instead. Your paying someone else's mortgage when you will still need to pay for rent in retirement. If you own you will have more money in retirement.

See attached picture - on average a house bought in 1987 was worth more in 1992. The drop you describe is crazy, did something terrible happen in your neighbourhood? A flood or something? Or I see you say valued rather than bought, maybe it was very overvalued by someone?

Link in case picture fails to show - https://landregistry.data.gov.uk/app/ukhpi/browse?from=1980-01-01&location=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Funited-kingdom&to=1995-12-01&lang=en

I don't believe in the crash we have been promised for the last 50 years, and that some posters think would give them the chance to purchase a mansion for a tenner,

and financially it wouldn't be that great for me,

but the idea of a crash putting a stop to all the new developments ruining the countryside everywhere has some appeal 😂

That only applies to people who obtained mortgages at artificially low rates. Interest rates generally reverted back to normal levels and are steadily falling.

Boggles my mind. We all tell ourselves stories to get through the days I suppose, and I think the OP is telling herself a story that renting is better than buying.

One factor that didn’t exist a few decades ago, is a lot of properties in major cities being bought up as safe places (they assume) to park their money, by wealthy Chinese and other Far Eastern nationalities. Whole blocks of flats in London have been largely targeted at overseas buyers, and all too often the flats are left empty, not even rented, so as to maintain their ‘new’ value.

In Melbourne, according to Aussie friends who live there, a lot of new flats have been similarly targeted at overseas buyers. IIRC they do have a rule in Australia, that foreigners are not allowed to buy older properties.

Dh was told by a half-Dane at some business conference, that in Denmark foreigners are not allowed to buy any property unless they’ve been properly resident - not just back and forth - for at least 5 years. Apparently the rule was intended to stop Germans buying up loads of property, esp. along their extensive coastline, but since they couldn’t say ‘no Germans’ they said ‘no foreigners’ full stop.

The half-Dane was peeved that because of being only ‘half’, albeit with dual nationality, but not ordinarily resident, he was not allowed to buy.

And in the 80s, people thought a crash would never happen, because prices had risen inexorably for decades.

The crash at the end of that decade was shocking, and prices took around a decade to recover. My house had been valued at £87.5k in 1987, I sold it at the end of 1992 for £49.5k.

If I'd bought in the mid-80s, I'd have been in negative equity for years.

I am talking about conditions now, millions are coming off those low interest 5 year fixed deals to the normal rates now. How is a 400% increase in interest rates not huge. It’s a thing until 2027 I believe.Many will not be able to afford the increase and may put their property on the market. The OP is talking about what they should do now. All I am saying is carry on renting rather than buy into the falling prices of prime central London.

It was the lack of security that really got me to buy a house, although a bad experience with a landlord that hated fixing anything was also a factor.

If we'd had secure tenancies in the UK, like they do in most of Europe, I probably wouldn't have bothered. The rental market here is totally dysfunctional in the UK imo, although I concede it may be less so in other regions (I'm in the SE). My DIL is paying £1400 a month for a tiny 2-bed flat, above a shop on a busy main road, and considers herself fortunate that she's been able to stay there for several years.

I would happily rent from a council or housing association forever.

renting privately - not a chance.

OP, you sound very naive. Particularly not understanding why would buy when the market is going down.

If I were you I would have a good think about this.

I can imagine nothing worse than privately renting in my old age. Particularly in London.

@GETTINGLIKEMYMOTHER
“For some reason I have yet to understand it seems to be pretty much a global thing, we’ve heard the same from other (both European and non European) countries, inc. Australia”

Population increase and governments not building enough homes in the right places. More and more people moving to the cities for work. More and more single person households. Same everywhere.

Interest rates were 5% in 2006, they’ve gone down 1% in the last year with more cuts envisioned so I have no idea why you think there’s been a “huge increase”.

Remember as well that the profit in selling your primary residence is tax free. One of the last remaining things that is (and no doubt won’t be for much longer).

IMO attitudes have changed somewhat in certain countries where renting used to be the norm. E.g. a Swedish friend who returned a few years ago to Stockholm, after over 20 years in different countries inc. the U.K., didn’t even think of renting - she bought a flat a few years ago and told me that prices had continued to rise afterwards.
Likewise her adult sons have both bought their own homes. One is IIRC on his 3rd, having bought, done up and sold on the previous ones.

And only yesterday, at a Gdc’s birthday party, dh and I were talking to a professional musician parent, who was saying how cheap Berlin used to be some years ago, how cheap it was to rent a place, but how property prices have now soared and are eye-wateringly expensive.

For some reason I have yet to understand it seems to be pretty much a global thing, we’ve heard the same from other (both European and non European) countries, inc. Australia.

At the end of the loan the house is yours, and will hopefully over the years of the mortgage appreciate in value

renting won’t, all that will happen is you getting rent increases, and it remains someone else’s asset

Renting suits some people, other want the security of knowing they have a property that won’t be kicked out off at relatively short notice

People have been saying that for many years, and not just London. There used to be a housepricecrash forum, which I last visited probably at least 8 years ago. Some on there had sold their houses, confidently expecting that prices were about to crash and they’d be able to buy again, more cheaply…😱

Doesn’t mean it won’t eventually happen though, but TBH I’m not putting money on it. A long period of price stagnation, on the other hand….

We paid off our mortgage age 49. So for the last 15 years have been able to save that money. Our house has increased in value by about 240k since we bought it. it is a 4 bed semi in a mediocre area.

A 1 bed flat in our area is about £800 pcm.

why on EARTH would we think renting is better than buying?

I personally think you’re bonkers but we’re all entitled to our own opinions. I mean, yes, you’ve got your investment but you’re always at the mercy of the landlord. If they wanted to sell up tomorrow then you’ve got to try and find somewhere. If the boiler breaks, will they fix it quickly? I don’t like having to rely on someone else.

That's totally fair enough, I'm just saying people certainly were saying the same types of things in 2006. I can remember commentators saying it would take a decade for things to recover.

2006 is 20 years ago, we have some unique things happening right now. Not least a huge increase in stamp duty and interest rates and last month 40,000 less people working. I don’t even think it’s timing the market, it’s recognising it’s falling in the areas I am looking at and seeing if it goes further- it will.

I think it depends on your timeframes, it's very difficult to time the market. As I said, I was advised against buying (in central London) in 2006 and possibly I could have paid slightly less buying 6 months after I did but it's been very good financially when looked at even over a 5 year period.

I would carry on renting, many policy changes like stamp duty increases, millions coming off mortgage fixes which could see more property for sale, changes to leasehold and landlord regulations which could derail the market. Also not impossible there is a recession by Christmas. I would buy at some point but not now. Also Prime Central has seen 20% to 30% drops from the peak.

Also quality of life in central zones in London is changing, it’s little things but I think we might get the same problems as some American inner cities. Maybe take the opportunity to rent somewhere within London with a different lifestyle.

I'm glad I bought when I did - which was in 2006 at a time when lots of people were convinced there was about to be a housing crash. That, and some other reasonably sensible moves mean that I'm now paying 2k a month in mortgage for a house that would cost nearly twice that to rent. I can invest the difference in various asset classes and will have a large asset paid off when I retire.

Honestly I do find my mortgage a bit of a millstone but once it's paid off I'll be glad I did it I think.