The government shouldn't be propping up these mad house prices

[flashbac]

Forecast before the budget was that property prices would be more or less static this year. Then came flipping Rishi extending stamp duty and introducing a mortgage guarantee for 95% mortgages. Since then demand has hit the roof.
I spoke to an estate agent yesterday who said we were in a "red hot" phase and she last encountered such madness in the 70s (similar bubble caused by too much flowing and easily available credit, burst by the oil crisis).
I fear for younger generations that will be left behind.

I don’t think I’ll ever own my own house now. Early thirties, no deposit. I’m not busting a gut for those prices. Luckily I do live in a council house which I waited nearly a decade for so I have security and that’s all that matters to me now. I really feel for people stuck in private rentals. It’s just awful. I feel bad I will not be able to pass on any property inheritance to my children, but I was born into poverty and unfortunately stayed in it (fair play to those who didn’t).

I count my blessing for what I’ve now got.

Many will be stuffed either way: deposit savings will be hugely reduced if there’s high inflation (overall inflation, not just property), but if house market drops then those buying will see their deposit savings wiped out anyway.

If a developer builds 10 houses and noneone in the local area can afford to buy them what will happen?

What happens here, @Blankscreen, is they get sold to people moving out of London, who've just sold a 2-bed flat in some fancy-schmancy part of Clapham or Blackheath and have £1m+ to blow on a family home in a small town in Sussex.

With (apparently) little likelihood of a return to working in central London offices for many, the travel radius for former commuters will become much greater imo. If you only have to go to London one or two days a week, it doesn't much matter if the train journey is one hour or two.

Friends in Somerset and Dorset tell me this is already happening there, I daresay the same applies in the east of England and the midlands.

@LakieLady

Absolutely. West mids here near Brum.
London is an hour away on the fast train. You could buy an incredible Warwickshire home for 1 million.

@Chillychangchoo

I don’t think I’ll ever own my own house now. Early thirties, no deposit. I’m not busting a gut for those prices. Luckily I do live in a council house which I waited nearly a decade for so I have security and that’s all that matters to me now. I really feel for people stuck in private rentals. It’s just awful. I feel bad I will not be able to pass on any property inheritance to my children, but I was born into poverty and unfortunately stayed in it (fair play to those who didn’t).

I count my blessing for what I’ve now got.

Will you be able to buy your council house once you've been there long enough to qualify for max discount? Unless they've changed the rules, your discount can count as your deposit, so you all you have to be able to demonstrate is that you can afford a mortgage equivalent to the discounted price.

Mind you, home ownership isn't all it's cracked up to be. I'm due to retire soon and will no longer be able to afford to stay here, following the death of my partner. I practically shit myself every time the boiler makes a funny noise or anything, and find myself envying MIL who just has to pick up the phone and call the council instead of potentially having to find £2k+ for a new boiler.

And none of us know what the future holds, your kids may end up very wealthy and buy you a house!

They’ve not been that mad here (North) slightly more and there was a crazy few weeks but that tailed off VERY quickly almost anything here that went on late autumn and is still for sale has been reduced at least once of not twice since then.

Also I find the 95% mortgages and no stamp duty at odds with what the lenders are doing. Most are now not lending to anyone who’s been furloughed at any point. And they’re seriously turning the screws for self emp and owner directors - i.e just not lending at all, or giving really paltry LTV and loan amounts and this is regardless of whether the business has been negatively effected or not.

I also think in some places it could the stamp duty holiday in tandem with very limited supply.

I knew before I opened the thread that you would be house hunting

Like it has been said countless times. Supply and demand. That’s it. That’s what drives prices. Too few houses, too many people. Now let’s count the number of nimbys who oppose any development near them. Of course no one here will admit to being a nimby. So it’s just easy to spout the ‘oh govt shouldn’t be supporting a house price increase’. Just boring re hashed nonsense which avoids the actual issue.

@Ifailed I don't think gerrymandering means what you think it means...

Totally agree.

I need to buy now due to life circumstances and I'm somewhat bitter about the high prices, and worried about potentially being in negative equity in a couple of years' time. (Though I realise that I'm fortunate to be in a position to buy and to stop paying rent)

I agree it's awful. They are interfering with the market so much when should have just allowed a natural correction, which might have been a small drop but nothing too damaging. This just pushes them up, yet again.

@LakieLady

I could potentially buy my council house after three years. (Only been here a year) I work and have a stable income, not massive mind. The only thing is this house, albeit a spacious 3 bed is getting very old. Personally I think it’s a fab council house but I don’t see how my quality of life would be any better for buying it. Mortgage payments would be relatively similar to what I pay now but then I would need to pay for maintenance. It’s swings and roundabouts really. I’m glad I have the option to buy one day but it’s certainly not on my current agenda. Sorry to hear about your partner, hope it all works out okay for you.

@littleloopylou
Look up the Westminster Council Homes for votes scandal & Shirley Porter. Not Gerrymandering in the sense of altering boundaries, but a clear attempt to change the demographics of council wards.

I spoke to an estate agent yesterday who said we were in a "red hot" phase and she last encountered such madness in the 70s

That is one very old estate agent

@Ifailed got it and thanks for explaining - that makes sense

@sst1234

Like it has been said countless times. Supply and demand. That’s it. That’s what drives prices. Too few houses, too many people. Now let’s count the number of nimbys who oppose any development near them. Of course no one here will admit to being a nimby. So it’s just easy to spout the ‘oh govt shouldn’t be supporting a house price increase’. Just boring re hashed nonsense which avoids the actual issue.

This thread encompasses more than that.

Plus you have missed out landlords who own multiple amounts of houses to make big profits.
Plus many more people living alone in houses, than their used to be decades ago.
Both situations are not to do with too many people.
Number of new houses "needed" in those scenarios could have gone on a long time.
Now there is a bit of a reset in the btl market[rules changed Nov 2020], plus this new 5% deposit situation.
Personally, I do wonder if there is a government manipulation of things there, as seems odd that both things have happened at much the same time?

Tbf the house prives should of been dealt with about 15-18 years ago when they really started to shoot up way beyone peoples wages
Its ok if your sat in a house that you don't need to move from but for those that can't get on housing market that need 5% mortgage etc then its a helpline
If the houses drop then many will be in negative equity , its needs to stay stable now for years so peoples wages can catch up, but should of been something done years ago when they first started going up by so much

@Leonberger

To those who are desperate to see house prices fall. What would happen to people like us who have scraped and saved and crammed ourselves in a tiny rubbish home for years to afford to save and buy somewhere.

We just get plunged into negative equity and loose 5-10 years worth of hard work, sacrifice and savings? Great

This.

@jimmyhill

I did think that. It was the lady who picked up the phone at the estate agents. Might be admin or reception staff. If she was around in 70s she could be in the late sixties or early seventies.

@sprockerdilerock

I'm certainly not calling for a crash but prices should not be pushed up using taxpayer's money. Static prices are needed to allow salaries to catch up. We won't have a crash anyway I don't think.

@jimmyhill

I spoke to an estate agent yesterday who said we were in a "red hot" phase and she last encountered such madness in the 70s

That is one very old estate agent

Even older than me (65)

I was an estate agent from1980-1983.

@Curiosity101

I'm not as worried for future generations as I am for current house buyers. If/when the artificial propping disappears there's likely to be a crash and there could be a lot of people in negative equity (even accounting for the government's 5% in the mortgage), especially taking into account how many people will have bought new builds.

People need to do their homework just the same as previous generations. They need to make allowances for the unexpected, whether that's disease, job loss, house price crash. Just because something is offered to you in your current condition doesn't mean you should accept it. We were offered twice as much for a mortgage than the house we bought. Came in great when interest rates shot up to 15%.

Yes we are FTBs and struggling. We were trying to buy last year but after covid started lenders were asking for a 15% deposit which we didn’t have. Stayed out for a year and started trying again this month - we’d hoped the end of stamp duty holiday would help but as it’s been extended it hasn’t. So much competition. We saw a place we loved last week, it had 15 viewings on the same day. Put an offer in a few grand above asking but it went for 15k over asking!! Just madness. Cant see how we are ever going to find anywhere we like as it seems there are many people with deeper pockets than us willing to go far beyond the asking.

I think it's fantastic. About to flog my house to a naive FTB before I leave this brexit ridden, plague infested island. Thanks, Rishi!

I don't know what to think. People have been saying for a while that we're due a crash, so we've held off on upsizing. Meanwhile the prices seem to be drifting out of reach.

I'm now worried if we don't go for it we'll never be able to make the jump, because if the market hasn't slumped so far, what will cause it? Demand isn't going anywhere, and govt seem intent on keeping housing going. I was annoyed Sunak extended the SD holiday, it's just prolonging the limbo!