To think house prices are too high but the economy is based on them so they will be kept high at all costs

[Namechangedec15]

I thought for years that they were about to crash as too high and unsustainable. Then scheme after scheme came out to rig the market and keep them high. Its shown that they will do anything to keep them high.

I guess its because the economy is very reliant on them, so if they fell it would bring the country down with them. The pound has already been devalued massively.

They are starting gradually to tax btl more, but seems like they are slowly doing it to not crash the market, but just to get them to exit the market gradually. Then as demand outstrips supply buyers will replace the over leveraged btl people.

Therefore I conclude that a whole generation will just be funked over in order to keep them high?

Am I pessimistic or realistic? I'm seriously looking at leaving my home country.

Namechanged Collapse? Part of definition of Ponzi scheme.

Don't get me started on estate agents, the practice of competing to secure a listing by over inflating valuations and then encouraging people to try and borrow more than they can financially sustain to prop up the valuation is totally immoral and in my mind a huge contributing factor to disparity in the market. We need transparent performance data to generate industry standard valuation practices and better conveyancing solicitors. The role of estate agents in the future will become redundant unless they dramatically innovate and improve.

Hugely agree with pp that it isn't just London. Its the entire country, people that can are getting into tbl or are not selling the old house and renting it out when they buy the next.

A huge number of people don't want to hear it though, as you're about to find out.

I think MN is a very ballanced and great place to have this discussion. I've been on a forum that thinks they are going to crash for about 10 years, but I got banned because I now can't see the crash coming and have bought a house. I was accused of working for the government to demoralise and divide people waiting for a crash . thus I've concluded the people there are largely paranoid and dilusional and by banning people that don't tow the site viewpoint they are becoming increasingly detached from reality.

Namechanged Collapse? Part of definition of Ponzi scheme.

But collapse how? A decline over a generation masked by rampant inflation?

However - a sudden crash would cause massive economic problems and misery for millions of people. Stability and a gradual decline would be best

I begrudgingly agree if I was to look at it from a non selfish viewpoint.

For me I'd like them to fall massively as I can't afford the next step up so I'm stuck in a small house that isn't really big enough to bring up a family in.

Yes, we are in a hole. I know it's not very practical but it really annoys me that no one was listening when it was just us poorer folks sounding the alarm 10 years ago! If anyone had we would have more options now. There are no good options left.

Still the first thing when in a hole is to stop digging. I like the idea of mandating a maximum house price, especially for the smaller 'starter' homes, linked to minimum wage. And of stopping multiple property ownership. We could solve two problems in one if we could mandate a maximum ownership of say (pulling figures out of thin air again) 3-5 properties per legal entity that isn't a council or other social scheme, and take extra straight back into public ownership. Somehow.

Preferably by just taking it off them, blow compensation. I can hear the screams now, but someone has to pay for this extreme imbalance and better it was those who've profited so much already from it than those at the bottom who've been excluded for so long.

House prices will collapse under the following 3 conditions:-

1. When people can no longer afford to either buy or rent, and more and more are forced into homelessness or housesharing, thus proving it's a Ponzi scheme.

1. Interest rates go up to 5%. Stocks and shares, housing and banks will all crash, thus proving our entire economy is a Ponzi scheme.

1. If the government bans buy to leave, including retrospectively, foreign investors who buy property and not use them either rent them out or dump them on the market.

Mitch Feierstein's blog over at Planet Ponzi is well worth a look.

Break NIMBY and NODAM and SOBBY so that builders can build.

Exclude BTL on new build.

You can't exclude it on existing property.

I don't think the first item on your list is accurate DoctorTwo. Homelessness is up by a third since 2009 (leftfootforward.org/2015/12/no-room-at-the-inn-for-the-50000-households-classified-as-homeless-this-christmas/) and the government proves by its continued use of benefit sanctions, knowing that they directly cause death, that they don't care about the have nots in our society. Interest rates definitely contribute to keeping prices high, that's why they won't raise them.

I think the op is right, whole generations are being fucked over to keep this elitist oligarchical system going.

2nd attempt at clicky link leftfootforward.org/2015/12/no-room-at-the-inn-for-the-50000-households-classified-as-homeless-this-christmas/

whole generations are being fucked over to keep this elitist oligarchical system going

Small point of order - nearly 70% of houses are owner-occupied. Even the most stretched definition of 'elitist oligarchical system' can't be applied to something which includes 2/3rds of the population

It is also worth bearing in mind when reading all the 'oh my parents bought a 5 bedroom house on one junior trainee salary in the 1970s' posts... In the 70s, only around 50% of the population owned their own homes, up from 20% a generation earlier. It was not the norm to do that, and it happened because demand was lower than it is today

NoTechnologicalBreakdown You'd better vote Conservative. Nobody else will repeal the Human Rights Act and allow confiscation without compensation.

Fixing maximum prices for houses was tried after the War when house building resumed. It didn't work. The difference between the official price and the market price just turned into back-handers in brown envelopes. My late FIL paid £250 - a lot of money in the late Forties - to a site foreman to reserve a house. It would happen again, probably in a more sophisticated way.

Andrewofgg, oh well it was a thought. I guess left wingers have to abide by the HRA even while the right wingers rip the spirit out of it. I didn't know about price fixing, but the question then is who is determining a separate market value for houses and how. And enforcement of laws against bribery of course, and access to law for all.

sparechange, yes, home ownership started to increase, actually from the very early on, in the 19teens, as social inequality started to decrease. Renting from landlords is fundamentally a sign and cause of mass inequality. And since 2001, since inequality has been dramatically increasing, owner occupation has been decreasing. It's now closer to 60% than its peak of 69%, according to the ONS in 2013. You'll note that house prices have been drastically increasing in that time. So it's not owner occupation that drives prices up as you seem to be inferring.

Well NTB, what are private landlords going to do when people can no longer afford to pay rent due to neotard policies? There is a race to the bottom, and those of us at the bottom are already struggling. I can't afford to rent a place, so it looks like I'm homeless from Jan 10th. Luckily I have a car I can sleep in.

We have quite high owner occupation rates, yes, but anyone not having had the opportunity to buy their first home before maybe 2003ish has ended up paying much more in relative terms than FTBs in previous decades. I'd say a good number of that sixty odd percent of the population who are owner occupiers have still been fucked over. Its not like people buying in the last few years have had the opportunity to opt out of the fucked up housing market. Rent or buy, still a mess.

Namechanged How collapse? I have no idea, and if I did I could make a fortune by betting on it! I have struggled with this for years, especially as I have usually bought houses on the peaks. Let's try:

1. Major pandemic H5N1? MERS? Ebola?

2. Natural disaster Supervolcano kicking off? Asteroid strike?

3. Manmade disaster, Global warming? Terrorist attack on Hinkley Pt?

But a primary financial meltdown must be the most likely scenario. The very rich have already bought protection against this. I think the technocrats must be hoping for rampant inflation. But:

UK plc can be valued at £8trillion, our houses are worth a bit more than this but business and the govt are in debt so bring it down to "just" £8trillion. That works out, in round numbers, at about £125K per person in UK. My pension valuation almost exactly accounts for the shares of myself, dw and 2xdc. That makes as much sense as did property prices in Tokyo before meltdown when at the rate plots of land was passing hands, the land in Tokyo was worth more than the whole of US. That was a messy correction, lets hope it works out better in UK when it eventually comes.

spoiling a good story with facts:

Yes, there are 'guaranteed rental' schemes which allegedly pay even when there's no tenant. These are as good an idea as 'we buy any house' and similar setups.

I remind everyone that much of the flooding we are seeing is caused by excessive building in stupid places. We've got plenty of houses if we make proper use of the stock we have. Buy-to-leave should indeed be stopped, but that only happens in London.

all the other ideas on here are impossible without dictatorship. Suitable countries are available for those who wish to leave.

Something is definitely wrong with the housing market, although I don't know what is needed to make it right.

In 1999 I was given the chance to buy the house I was renting, but for various reasons, didn't.

The house was offered to me at £21,000. It was in this road.

I was paying rent of £300 pcm. Houses in that road00 now rent for between £550 - £600 pcm

I was working as a Administrator, earning around £15,000. Administrators now earn around £15 - £20K.

So - House prices have gone up 4 fold, minimum. Rents have doubled. Salary has gone up by £5k, if that.

The only way that DH and I have been able to buy recently is because we've had a lot of help from his parents.

Fuck a duck, just had a quick look on Zoopla - the house I was offered for £21k is actually the one I've linked to! That's bloody random!

It was sold in 2001 for £33k.

Do you name change so often op you need to date it with the month and year?

There are no good options left.

Yep, its got far too big and out of control now. Can't bring down to country so chances of a crash or interest rate rise back to normal anytime soon are slim. If London crashed overnight 60% wed just be back to where we were in 2007, when it was still out of control.

doctor two are you saying we need all three?

Owner occupier rates have peaked and are going down. I think France has about the same rate, and they have proper renters rights.

What they should do is limit builders profits, just like they do with the energy companies. Stop them making 40-60% profit and limit it at 5%.

That is interesting with Japan, however today we have a far more global interlinkd economy and serval countries have the same problem at the same time. Japan was in issolatipn and could export to help. So don't think we will end up Japanese.

I just wanted to refer back to the point about normal working people are the ones that buy houses.

I own my house (with DH). We have owned for 5 years and this is our second home. Our first home increased in value by appx 50% in 4 years, we thought great! Sold up and moved somewhere nicer.

Since we moved the stamp duty rules changed and prices went up. If we were looking to move now we could no longer afford out new house, we only moved 8 months ago. Our old house has recently been sold again. Sold price not yet available online but was on the market at about 25% more than we sold it for, and I bet they got it, or thereabouts. Basically my old house has nearly doubled in value in 5 years.

When we decided to buy, DH and I were both living at home with our parents. We saved up £25k between us and bought a house in London Underground zone 5.

Roll on only 5 years and in my friendship group we are still the only ones who own a house. Although everyone else is now renting so has less spare cash to save. Plus the fact that to buy now, they would need about £50k to get started.

It's crazy. We are so lucky but most of my age group (early 30s) are royally fucked. All normal working people with decent jobs and pretty good salaries.

Reading back, my No1 would only cause a small correction, which in London and the SE would quickly be erased. Either of the other two would cause mayhem.

Another thing is if the govt changes the way banks make loans. Google 'positive money', it's most interesting.

It's crazy. We are so lucky but most of my age group (early 30s) are royally fucked. All normal working people with decent jobs and pretty good salaries.

Pretty much it, a whole generation are fucked. House prices in London can't go down 70% overnight as would crash the economy, ristrict lending, leave lots of people quickly out of work so most wouldn't be able to afford a house anyway.

Doctor interest rates aren't going up any time soon to 5% and they aren't going to bring in new rules to stop foreign investment in property. Bojo still goes to Singapore to actively promote it and say its a good think for uk PLC.

No, they can't put interest rates up, I agree, but they should. If we want an economy that works for the majority, that is, the zombie banks have to go. When they're gone, we can rebuild the economy, as Iceland has.

If the current system is adhered to then we have to carry on bailing out the banks indefinitely, as you can never taper a Ponzi scheme. Japan started QE in 1990, and know they can't stop.

YANBU, its a huge scam. France has no problem with living in rented accomodation, as used to be the case here.

Housing is seen as a financial investment, not an investment in families or a sense of security.

An insecure population is more stressed, anxious, blaming and compliant to extremism.