AIBU to think that the UK housing crisis is not caused by supply and demand?

[Goodnightseamer]

It's often trotted out as a reason but there are 29 million houses in the UK. There are slightly fewer than 28 million households. That's over a million houses more than there are households. So there are plenty of houses. Houses are unaffordable due to speculative investment, not under supply. AIBU?

I agree with both of you but ironically the historic model of the rentier economy would be better for lots of people because at least tenants had security of tenure and landlords were subject to rent controls. Right now we've got the worst of both worlds as more households are renting privately but they have fewer rights and protections than tenants did in the 1930s!

I think it's likely that landlords (the smarter landlords) are seeing that the writing is on the wall and they are starting to offload their portfolio early before things really start to bite

I've just had a quick look at rightmove for our area. There are a tiny number of one bed flats at £160k. The 'affordable' end of the market is all dominated by retirement flats for the over 55s.

I don’t believe the bubble will burst. Interest rates will stay low for the medium term if not longer.

@CuriousaboutSamphire i think you describe a vicious circle really- how many people on this thread alone have said people from the south east of England should be relocating to cheaper parts of the country? House builders don’t build houses they don’t think they can sell. Why would they?

I live in a block of flats where I've noticed a few of the rented flats have recently been sold to the tenants without ever having been put on the market, suspect the landlord's have made a calculation that their best option was to offer the tenant a price they couldn't refuse now rather than put the property on the market and struggle to sell as prices slide

Property prices have been static or reducing for about 2 years, those landlords seem a bit slow off the mark!

Where I live there are no 2+ bed houses/flats for sale for under 220k. The mortgage would be doable for most I guess but with rent, Bill's etc getting a deposit together remains an issue unless you get help of some kind.

I feel like we have been 'waiting' for a crash for years. Correct me if I'm wrong, but it feels that since the 90's the UK has been on a ten year'ish cycle of houses dropping and then rising higher than ever before. So judging by that I suppose we are due one.
But I agree with a PP about interest rates, and maybe that will keep a crash at bay for now. And brexit, well... We'll see about that one

Exactly @Ginghamricecakes. The houses are still there. In fact there is an over supply of houses re builds Vs households. But they're not being bought by owner occupiers

The problem is property prices have gone up so much they can’t crash. It just won’t happen. What should/ May well happen/ is starting to happen to some extent is that property prices will reduce over a very long period of time, and wages will increase. So maybe our children or grandchildren will find housing more affordable.

However the idea that a £300k house is going to crash to £150k- it’s never going to happen

It's not a bubble either. I don't think it will correct. This has now become a structural (if you'll pardon the word) problem caused by thirty five years of housing policy that encourages investment and introduces ad hoc props to sustain prices. It's not going to go away.

Recent political technological and cultural changes mean that more than ever we are in uncharted waters, no one knows how this is going to pan out😳
it's interesting to speculate and look at the possible implications of the current setup but really I think it's anyone's guess!

I dunno answers to everything, but I am struck by one thing...

20yo is planning how to buy property. This is great. He should do it within 4 yrs. He's in military & paid well on deployment.

Does he want a single room flat or a 2 bed terrace? Since he might be away 6-8m of the yr?

No, of course not. He wants 3-4 bed detached. Gym room, guest room, wet room... One of many people I know greedy for large property well beyond their needs. This must skew the prices and poorer families who need a large property get squeezed out.

I think the problem is lack of landlords willing to accept housing benefit and the lack of affordable housing for low income working families.

Why will the £300k house never fall to 150k?
What about all the big expensive houses owned by elderly people, when they die the family will need to sell that property, surely they will have to sell at whatever price they can get?

That's interesting about a long-term reduction. I wonder if future government come down harder on landlords, then it would be a less attractive prospect, causing them to sell up and increase availability, which would bring prices down gradually. Especially if wages go up, which they do seem to be, every so slightly (though not enough!)
It feels like we are on the brink of something, though, no idea what.

@RhinoskinhaveI I agree that there are massive societal implications in having over a third of households housed in insecure lets and being subject to the consequent uncertainty of eternally possible eviction and rent increases with no ceiling. I don't think this is a good state of affairs at all.

People selling inheritance houses are a very small part of the market. And why would they sell it for £150k if everyone else with similar houses are selling them for £300k?

What happens in other countries where property prices go so high even rich people end up having to live in a cupboard?

There are no countries with rich people living in cupboards.

@lljkk Interesting point! But at the same time, buying as a 20something means buying the fear of a crash. It makes more sense to buy bigger, meaning that you could stay in a house long-term and 'ride out the storm' of a crash, than buying a one bed and the market collapsing, leaving you in neg. equity.

Cut me some slack, we all need a bit of hyperbole now and again 😊
You get the gist of what I'm saying 😋

@JustAnotherMammi OR housing benefit is part of the problem given that it rises responsively to rent increases, as it's not a set figure but changes in accordance with the lowest three deciles of the local rental "market" ie the market is fixed according to what housing benefit will pay out. We're spending billions on this a year, mostly not to unemployed people but to people in work who couldn't afford their rent without housing benefit. Which is set according to "market" rent ... you get the picture.

I'd rather ride out the storm in a small cheap property that I could afford to maintain

But there aren’t any countries that don’t have a variety of housing stock. You could take an example like Monaco, where only rich people live. But Monaco isn’t relevant to a country like the U.K.
there are plenty of countries with unaffordable cities- Sydney, New York, Paris- and these cities are just unaffordable. They’ve been that way as long as we can all remember.