To think house prices need to go down

I think there can be a balance, where house prices stay relatively stagnant, going down or up very slightly, tjen wait for affordability to catch up. Although some people go on about it I can’t actually see a massive price crash. People have been affording houses, there’s been a housing shortage not the other way round, so all it would really need would be stagnant or a slight drop.

Voted Yabu purely because of

reducing demand by restricting immigration etc

Because it really isn’t the driver, imo.

It’s because of cheap money which has historically been largely available to UK buyers, and also due to the leverage those who have access to money via family (grown by said cheap money and property inflation) have which some have but most do not.

A lot of wealth is tied up in property that has already been paid off. Boomers if I’m not beating around the bush, passing on funds to family.

Couple this with overseas buyers buying up property as an investment gain (historically returns have been very good, less so maybe now) to let out or even sit dormant while the asset increases…

And a contested/nimby attitude to house building and planning in this country. Oh, and there aren’t really the builders that can build houses anymore due to out lack of training and Brexit because we told all the builders that could actually build to fuck off out of our country

Thats my pound shop Gary’s economics version of it.

They are too expensive compared to income, but if they fell enough for a proper correction then a lot of people would be in negative equity and it would all be a disaster. I think we need a massive increase in supply so that they stay at current prices but growth so we earn more and it takes up less and less of our income until it's more reasonable overall.

I don't think all the Chinese flats in London are there to grow, although that's nice, plenty are there as an escape route from a regime that could go even more rogue.

We need more houses

They are generally static at the moment.

I don’t want prices to plummet because that would likely mean a severe recession, which would mean we’re all in trouble.

Mortgage affordability should be on the same basis as rental affordability, with more 100% mortgages.

But house prices will always go up generally, due to inflation.

It doesn't always work like that though as many people renting get their share, or some of it covered by universal credit (including me despite working full time)

No, this isn"t correct, you are confusing wage inflation with the explosion of cheap mortgage debt that fuelled the present property bubble, prices have a long way to fall before we reach a point where they can start to increase again in line with wage inflation.

You may well have been able to afford to buy a house earlier in the 80’s, however there would also have been a strong chance you may have lost it as well. Unemployment was very high, jobs were not secure companies (even a major bank in the early 90’s) were going bust. The housing market crashed and people had to hand their keys back whilst still being responsible for their mortgage debt. Ask yourself how you’d feel if there was a price correction now, I don’t know how much you paid for your property but let’s take an imaginary figure of £400000, you take a 90% mortgage of £360000 the market crashes and your house is suddenly worth £280000 but you still owe £360000. A correction in house prices won’t wipe out your mortgage debt!

Unless you have died (so no longer care) or have multiple investment properties, the state of the market if you move is generally proportional - ie our house has risen in value a fair bit, but so has everything else so if we moved (which not planning to) then we would pay more for the other house so the rise in value doesnt really make a difference. If house prices fell we would get less but generally other properties would also be cheaper; so not too bothered really.

I dont think there is any magic wand, but the price of some of the poorly built, cramped new builds stacked into random bits of land away from any amenities is ridiculous yet sadly the best way for many to enter the market.

There is too little housing stock and we’re not building any more because the planning process makes if too hard. It costs 8.5x more to build a mile of high speed rail in the UK compared to France. Thats bat tunnels, newt awareness, NIMBYs, blah blah blah. House prices are still going to remain high as there aren’t enough houses for everyone to own one.

We need to scrap regulations and get building.

I think it’s a bit unfair on people who have put everything into their houses and paid enormous mortgages to then lose everything- if they went down enough to have the effect you want, it would have that effect as people would be put into negative equity. So not just a case of “oh well the next house you buy will be worth less too”.

The people in that situation aren’t the ones who have benefitted from the massive rises in house prices either.

I just took out a mortgage and I am absolutely not concerned about house prices going down. The reason being is because I bough my house to live in, not to sell it on at a profit. So it is irrelevant to me whether it costs £500k or £5k at this point.
I understand that sometimes circumstances are such that a person may need to sell due to loss of job, relationship breakdown and such and in these cases, it will be devastating to end up in a negative equity. But the whole housing market speculation is what got us to where we are to begin with. Buy a house, live in it. Job done. A house is a home, not an investment opportunity.

House price falls are always going to affect these people though. It would affect me hugely. That doesn’t mean that I don’t think house prices need to fall if young people are going to get on in life. High house prices:

Stop young people moving out of the family home, having families, being happy, normal adults.

Take up so much of our wages we don’t want to pay more tax for better public services etc.

Raise the complaints against asylum seekers.

Stop companies wanting to invest in the UK.

Nobody other than first time buyers want cheaper housing.

Solution could be a gov-backed buyer scheme with very low/no deposit, where you just need to demonstrate 2 years of employment and then you're eligible for a gov-backed "mortgage" in the form of housing payment which could be taken directly from wages for the first five years, after which point you'd be free to shop around for a bank mortgage.

it could get people into owned housing from a young age (say 20-25yo) and the post-gov mortgage term could go as high as 40 years.

"Nobody other than first time buyers want cheaper housing."

And as they borrow the mortgage debt that supports the bottom of the pyramid that is quite important! I think mortgage approvals are down to about half their historical average now?

That is the capitalist debt system, sometimes you lose sometimes you win (unless you are a banker then you always win) People who got themselves involved in enormous mortgage debt when it was well telegraphed for years that rates would need to rise, and maybe very sharply, at some point only have themselves to blame, what do they want, another zero rate bailout?

I don’t know about anywhere else, but around here (outer SW London) hardly anything is selling at the moment. One estate agent near us has recently closed.
IMO it’s a) just general uncertainty (Trump and oil), b) property is just too expensive, and c) everything is just too bloody expensive!

Even twenty years the three bed terrace house I grew up in midlands was beyond us.

We now have a four bed semi in cheaper part of UK and house prices have dropped slightly in our area last few months but we couldn't buy where we are now - when we could a decade ago.

I'd like house prices to drop at some point so our kids can afford to move out to rent and later buy. Our parents own outright - and money will either go on care homes or deposit for our kids - rest of family in HA housing we only ones with a mortgage really and I'd still like them to drop.

The problem is we haven't built enough for decades at time population has increased and hosueholds have got smaller and smaller. It is a factor in low fertilty rates with long term implications and its increasingly an economic issue as more and more goes on getting a roof over head less and less is avaliable in discretionary spending for rest of economy or to save.

Surely it is also unfair on people that haven't been able to buy a house for years because they are too expensive.

It's madness for so much of the countries money to be locked up in housing and peoples ability to service larger and larger mortgages is reducing all the time.

The last thing we need is more government schemes.

All of which seem to be orientated around propping up house prices.

We’re in quite an interesting situation. I was reading about a major builder who was exiting from building flats in London as it had got too expensive in raw materials for them to make a profit. So they and their competitors are all pulling out when their current projects have finished. Fewer properties on the market, then many landlords getting out of private letting. Fewer private lets, fewer new properties, more people arriving all of the time. Much higher mortgage rates incoming.

its just going to keep getting more expensive for young people wanting to move out of the parental home.