To be incredulous at much property prices have risen in the UK!

[TwistyKnickKnocks]

Looking at buying a house and saw a 3 bed terrace for sale. bog standard 90s build box, tiny garden, no garage, needs work at £430k. It was sold 20 years ago for £105k so an increase of 300% or £16k a year.

20 years ago the average wage was £18k and it is now £29k, so an increase of £11k. Although where we live a managerial salary is less than £25k. Most jobs are advertised at around £20k and quite often want a degree! It’s quite a deprived area too.

How the actual fuck was this allowed to happen?

Something I read looked at several explanations for the rise in house prices in the UK and found that the biggest explanatory factor was lower interest rates. Surprisingly, they found there was actually slightly more housing availability now than 2 or 3 decades ago, the housing supply had actually increased more than the population. (So, while more housing always helps, a shortage of construction does not explain it being harder to buy now.)

@Wrinklefree

We went to view a house a few weeks ago seller bought it for £70k in 2019 and has managed to sell it (not to us) for around £120k

The sheer notion of a house being £70k in 2019 completely blows my mind. My deposit on the house I bought last year was £75k!

I can’t remember where it is but the cheapest area to buy in the UK, somewhere in County Durham has houses I could have bought in cash with change with my deposit so it’s definitely not house prices being insane everywhere.

The problem is you spend all your time before you buy a house wanting house prices to slow down/fall but as soon as you own a house you get to be on the other team benefitting from them rising. Ministers own homes, they benefit from increasing house prices personally, they have no motivation to do anything about it and schemes they put in place to help FTB only inflate house prices further.

I bought my 3 bed end of terrace on a bog standard late 90s/early 00s development for £275k last summer. Someone is now listing a two bed terrace on the exact same development also for £275k. The two beds are a lot smaller than the three beds and have no downstairs loo.

I feel infinitely grateful we were able to buy last year as rising prices coupled with limited housing stock means I don’t know if we would have managed it now if we hadn’t.

If people want to practice what they preach they can stop protesting every time a new housing estate goes up in their area though. The houses have to go somewhere 🤷🏼‍♀️

Our exact same house model sold in 2020 for £250k

House prices here have gone mad! Had ours valued yesterday at 350k bought it four years ago for 263k and the agents expect to get around 370k when it goes to final offers! I was totally shocked by it as when we bought the market was definitely not like this!

Our house, a 3 bed starter home, is currently SSTC for £120k more than we brought if for 5 years ago. We’ve spent about 20k on it so that’s a profit of 20k per year.

But houses in the bracket above us seem to have increased even more. We’re just offering on a house that sold in Oct and has fallen though and bids are already 30k more than it sold for in Oct.

We are also competing with cash buyers for the mid range homes who have sold their mansions! We have offered on several houses since we sold and all have gone for substantially over asking to cash buyers. We have no chance with our big mortgage, despite having a good deposit.

The whole situation is bonkers. And the only people who profit are those with a property portfolio.

Not really sure why people are surprised. If you elect a government of landlords, you're going to have no housebuilding and rents to match.

bigissue.com/news/housing/rents-are-rising-at-the-fastest-rate-on-record-rightmove/

Landlords are asking for almost 10 per cent more rent than a year ago, says Rightmove. And it’s set to rise further in 2022.

The whole situation is bonkers. And the only people who profit are those with a property portfolio.

Totally. Don't get me wrong it's nice knowing our house is (currently) worth quite a bit more than we paid for it, but there's no real benefit unless we want to exit the housing market completely, or move to a totally random area which for some reason hasn't been hit by the current craziness - which most people don't. Even if we downsized, we'd only be releasing some of our original deposit, as smaller houses have also gone up proportionately in value.

It must be so defeating for people trying to get on the ladder, or who really need to move for some reason. Ridiculous situation.

Cars are the same atm - a friend recently sold his campervan for £10k more than he paid for it originally a few years ago, with more miles on it, and the car DH sold a year ago for £15k (and that was the most he could get for it at the time, he looked around a lot), would now cost him £21k to buy the exact same age / model / mileage. My mum took her 3 year old car in for a service, and the dealership were practically begging to buy it off her as they have no second hand cars to sell.

The world has gone totally mad, and not in a good way.

Yep. Bought ours for £160k in 2004, now would sell for £500k. As others have said, although this is great for us, we have 3 children all of whom are adults or nearly adults, and they will never be able to stay in their home city unless they get hugely highly paid jobs or lucky. We are being pushed out of our own hometown due to BTL landlords and incomers (a bit Royston Vasey - apologies :D )

Bloody Brexit,
Bloody Covid,
Bloody Boris,
Bloody House Prices,
Bloody Hell.

Bloody biggest gap between rich and poor since about 1800!

@TwoLeftSocksWithHoles EXACTLY!

@ninnynonny

Bloody biggest gap between rich and poor since about 1800!

You say that like it's a bad thing.

We bought our lovely ground floor council flat in our ultra cheap nw town 2 years ago. It's gone up in value from 60k to 82k ( we paid £22k) Its absolutely crazy! We had lots of cheap properties but we are right between Liverpool, Manchester and Wigan and have excellent travel links so I think the prices have been driven up by people moving out of the cities to get more bang for their Buck while working from home. Two years ago you could choose from a few dozen decent sized 3 beds for less than 75k but now it's much much harder.

Don't worry someone will mention 15% interest rates, sky & avocados soon. 🙄

It's a false economy as most people only make money when they downsize, it's harder to move up. And any money you do make needs to help your dc onto the ladder which causes more inequality.

It's fucked the economy imo.

Something I read looked at several explanations for the rise in house prices in the UK and found that the biggest explanatory factor was lower interest rates.

It's true

There has been lots of subsidy to do with housing but over the years governments have chosen to put it into housing benefit (so money goes to the landlord) and things like help to buy (the money goes to the developer) obviously both great things for the individual to claim but on a big economy wide scale they are bad

@dorkfink

Something I read looked at several explanations for the rise in house prices in the UK and found that the biggest explanatory factor was lower interest rates.

It's true

It's very, very simple.

When demand exceeds supply, prices rise.

If you wanted to fix that, you increase supply. Like we did in the 1930s and 1950s - building millions of houses in less than a decade.

If you didn't want to fix that, you'd piss around with interest rates, colour charts and anything else you think will fool people that you are doing something. Although admittedly it gets harder and harder when you have to keep stopping to count the profits you are making from "the housing ''''crisis''''"

It's all due to government printing money and the low interest rate environment we've seen for ages now.
The very high inflation we are currently experiencing and rising interest rates might cool off the market if sustained as buyers won't have as much purchasing and borrowing power.
Stock markets have already fallen significantly since the start of the year, the housing market might follow.

It's not just due to supply/demand.
Many landlords would rather keep their (empty) property in an inflationary environment rather than sell as real estate carries inflation. Where else would they park their money if they sell? Keep in a bank account and lose money every year in real terms?

Interest rates need to be higher so property is less attractive in terms of saving

Because there is too little land available for building. And what there is developers are allowed to hang onto to drive prices up. Every change in the law supposed to benefit new buyers has actually benefitted developers.

What is needed is a reconfiguration of greenbelt, so we can build in the places where people need homes (lots of land around towns is low quality, but fine for building). Only about 4% of Britain is built on, we have room.

We also need bigger homes, ours are the tiniest in Europe.

For 600 years up till WW2, the average home was x 3 the average salary. That is how it should be. You aren't being unreasonable.

(In some areas like London and tourist spots, who owns property also needs to be controlled, but in most areas it's a lack of land for building.)

but as soon as you own a house you get to be on the other team benefitting from them rising
But you only really benefit if you choose to sell up and move to an area where prices didn't go up. If you're in the house for the long-haul like me, the only benefit of it appreciating is that the LTV ratio improves, resulting in a better interest rate. Otherwise the gains exist only on paper.

@XpressoMartini

It's not just due to supply/demand. Many landlords would rather keep their (empty) property in an inflationary environment rather than sell as real estate carries inflation. Where else would they park their money if they sell? Keep in a bank account and lose money every year in real terms?

It is exactly supply and demand

If the market were awash with houses, there would be no monetary incentive for landlords to hoard.

The underlying problem is the fact that we decided to live in a society where housing is a commodity, not a necessity. Which is a cultural and social issue. And it's been that way since the 1980s.

(We've also decided that health is a commodity too, but that's for another day.)

Demand and supply, plus low interest rates for years and years
Then the stamp duty holiday
Foreign investors buying up UK property

These are all the reasons why the housing market is what it is.