To think London house prices are unjustifiably high

[Alanis126]

I was recently visiting London, where I once lived. It was a big big struggle financially and I wasn't sorry to leave. House prices have been stratospheric for 20 plus years and while there have been some small declines in recent years, I saw a central and fairly nice but ordinary sized flat which cost £1m. There are of course many properties costing way more. There are a couple of things in particular that I don't get. Forgetting the £1m central flats, even a very ordinary property in a quiet zone 5/6 area without much in the way of social amenities was £400k plus. While some people have family money, I think it is fair to say most people start their working lives with no or negative net worth. For many the early/mid twenties will be the lowest point if their income and when they most would like to or benefit from having access to social amenities. When even rent in a grotty house share is £800 plus bills, I don't see how it becomes feasible to live while you are trying to build a career. I know there are other cities but what if you have a job in an industry only existing in London? If houses are £2m or £3m then does it matter anymore what the price is? Could they be worth £5m, £10m,£150m? And while I accept people may still choose a London lifestyle, if someone has London equity and doesn't enjoy their job, is it only fear of being priced out for good that stops them relocating and having a total change of lifestyle?

I do not think it is a good idea AT ALL to widen the definition of “vulnerable” to mean most of the retired population, simply because they can’t afford to pay for their own housing cost out of their pension income

Most of the current and upcoming retired population are home owners. The problem will come when millennials retire.

The problem re millennials will be compounded by the rising proportion of older age people. It’s a demographic time bomb, as they call it. Plus lower home ownership.

The problem re millennials will be compounded by the rising proportion of older age people

I don’t understand that. The majority of boomers will be long dead by the time millennials retire.

It’s too late on a Sunday to match millennial term with this

I recalled stats re U.K. showing growth can’t google to find it now though. Here’s world

The world's older population continues to grow at an unprecedented rate. Today, 8.5 percent of people worldwide (617 million) are aged 65 and over. According to a new report, “An Aging World: 2015,” this percentage is projected to jump to nearly 17 percent of the world's population by 2050 (1.6 billion).

It could lower after that no idea. Would be good if so. Get over the hill.

Yes, a couple of people said that you’d need a car in outer London. Which you don’t.

I have friends who live in Banstead, Epsom & Carshalton Beeches who very much use their cars for supermarket trips, school runs, gym etc.

I live in an area where house prices are well into 7 figures so clearly we are here out choice not because we could afford a house elsewhere (but yes, Sutton has the full spectrum of property prices).

And it's great that you too love where you live, obviously 7 figures in Sutton gets you a lot more house & garden than it does in the areas I have mentioned.

Oh & are you involved with property?

I agree with you @sunflowery re stamp duty. We looked at upsizing but as it wouldn't have been for more than 5 years potentially we would have lost money. We are doing the loft instead & will do a longer term move later.

The UK birthrate fell exponentially after the 1968 Abortion Act so, once we boomers have gone, life should be a lot easier for the rest of you. As we’re predominantly home owners, the biggest expense to younger tax payers is our state pension.

Most of the current and upcoming retired population are home owners. The problem will come when millennials retire

This is exactly what I’m talking about. Younger people now who will be lifelong renters as they are priced out of home ownership.

@gigiblanks Banstead and Epsom are in Surrey and not in outer London.

Carshalton Beeches - you could walk most places if living north of the station. South of the station isn’t very walkable to places but there are buses and trains- so no different to being in other zones. People CHOOSE to have a car.

And I’m a SAHM. Not sure why you’re going on and what you’re getting at. It’s a simple case that ‘THE BUZZ’ doesn’t figure on many people’s house hunting list.

@gigiblanks PS most of the areas you mentioned don’t even have houses and gardens that we’d consider desirable for a family home. No countryside nearby etc It’s nice for kids to be able to ride bikes around or build dens etc. We just have very different visions of family life.

Banstead and Epsom are in Surrey and not in outer London

But Zone 6 nonetheless

And I’m a SAHM. Not sure why you’re going on and what you’re getting at

I've just never heard anyone describe the area they live in in the manner you did. Well apart from estate agents & property developers, hence the question. If i'm wrong, I'm wrong.

It’s a simple case that ‘THE BUZZ’ doesn’t figure on many people’s house hunting list.

Maybe in your case but I can't see how you can extrapolate that to 8m people. It definitely has an impact as places need to be popular to have said buzz & those areas tend to be more expensive. Likewise proximity to hiking/mountain biking wouldn't feature on many peoples house hunting list.

PS most of the areas you mentioned don’t even have houses and gardens that we’d consider desirable for a family home. No countryside nearby etc It’s nice for kids to be able to ride bikes around or build dens etc.

Exactly it's not for you & your family. Clearly plenty of families do find the homes desirable hence the higher prices. I think all those areas I mentioned have commons, my kids ride their bikes on the one at the end of my road, just as I did when I was growing up here. The countryside is not a million miles away from any of those places nor is the coast. I am lucky that I have family in the Languedoc-Roussillon so my dc do get to experience a very rural, safe environment for the Summer holidays just as I did growing up. That 5 weeks is my fill of countryside for the year 😁

We just have very different visions of family life.

Absolutely.

House prices down where I live ,Dorset coast are CRAZY and our wages are no more ...no London weighting....

I love living in London but seeing what you could buy in other parts of the country for the same price as a Coronation St terrace in SW6 London blows the mind.
The upside I suppose is that Londoners in that situation doesn’t really have to worry much about retirement especially if they plan to leave London. In our case, we plan to move abroad when we retire (hopefully late 50s) and the equity in these terraces will find a comfortable retirement. That’s probably a massive benefit to owning property in London.

London house prices are ridiculous quite frankly! I'm in Scotland, with less than 10 years until I'm mortgage free, although that could be less if I chose to use my savings or made overpayments.

The central point for me I think remains that hugely inflated house prices make prosperity generational. I don't think it is fair that person x might never need to work due to inheriting property worth millions while person y may be forced into a high paying high stress job they dislike and which damages their health just because their parents aren't in that position. I'd rather property prices fell even as a homeowner myself so that things are evened up.
As for London, it comes down to experience, taste and personality. Like many here I've lived in many places and found London the worst. I realise that many people love it and I absolutely can see the appeal of central London and all the historical buildings etc. I can't afford to live there and the places I did live I didn't like. The only places I absolutely hated were Stratford and Croydon especially the latter. So it is interesting to me that some people's perception is so radically different from my own that they are willing to pay big money to live somewhere that frankly I found toxic. It might sound like a judgement to those who want to take offence but it isn't, just an opinion.

So you don't like London and aren't prepared to pay the price to live there. You are a prime example of what I've talked about all along.

"Most of the current and upcoming retired population are home owners. The problem will come when millennials retire"

To what extent will that be balanced out by the increased tax revenue from btl, l wonder? Landlord letting out property pays income tax on the profit (subject to enforcement issues). Owner occupation does not generate income tax revenue. So, does the increased tax revenue go towards paying the hb of the retired renters who can't any longer afford private sector rents without benefits?

It is an interesting point though - increased life expectancy may means that more widespread private sector renting will have very different financial consequences for the government from those in eg the 1950s (when psr was quite common, but life expectancy lower). Basically, if people can't accumulate capital they will be less able to support themselves in retirement (including care home fees as a pp has said). Though of course you also have to look at what will happen to people's pension income, and the fact that retirement ages will have increased for those who are still able to work.

So you don't like London and aren't prepared to pay the price to live there.

Sounds like that, OP.

The central point for me I think remains that hugely inflated house prices make prosperity generational. I don't think it is fair that person x might never need to work due to inheriting property worth millions while person y may be forced into a high paying high stress job they dislike and which damages their health just because their parents aren't in that position.

Not sure if you’re aware that inheritance tax is very high. There are also plenty of variables in life so it’ll never be fair.

The average age of inheritance is between 55 and 65 too.

I love the fact that Brixton now has a village.

When I was born there over 50 years ago it was just common old Brixton market where my grandad had a stall for years. ButI suppose that is not posh enough for the new residents.

It's hard. Im in my early twenties and still live with my parents in SW London. Parent's bought the house on a mortgage in the 80's for around £200k (5 bed house) and it's now worth £1.5m !
A lot of my generation are stuck, all my friends live with their parents still or pay £900 a month for a 1 bed flat! We are saving for deposits but £30-40k is difficult and will take a lot of time.

I love London. It's not just a cool city but it's my home, friends family. I have no friends/family in other cities or areas. I would consider moving away for a more affordable life but at the moment my life is still in London but I can't see a future here ...

Not sure if you’re aware that inheritance tax is very high

There are ways to mitigate this though.