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?

It is insane. I live in quite a desirable village. Last July there was tons on the market and a 4 bed detached went on for offers over £400k. It was in really nice move in condition but the location is a little off. Nicest house in the road but next to some old industrial buildings and opposite some run down houses. It stayed on the market for a month or so then was taken off. They have just put it back on the market with no changes aside from painting the front door and garage and it's on for offers over £440k. Given it is SSTC within 2 days I'd say they have got at least 440k for it. Madness for that house in that road although it is nice inside

@friendlycat

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.

None of which is an accident. This was what people wanted for 20 years. It's odd when people get what they want, they aren't happy.

@forcedfun

I agree with you. It really bothers me. Our house goes up an astonishing amount each year and I don't derive any pleasure from that because it feels so unfair on those "left behind" and on the next generations too.

I would like to see legislative change to improve the protections for renters for a start.

I agree.

I never would have bothered buying a place if I'd been able to get a decent rented place with a secure tenancy, but there was no chance of that. A lot of my friends felt the same and I suspect that's still the case now, nearly 40 years later.

A programme of building social housing, with secure tenancies and fair rents, would take the heat out of the market and massively improve the quality of housing stock. And in the medium to long term, it would pay for itself. Once the building and land costs had been paid off by rental income, all the subsequent income, after management and maintenance costs, could be used to build more houses.

There used to be schemes like this. They were known as "council housing".

+1 for supply and demand. Houses go for what people are willing and able to pay for them.

If there was a maximum wage of say 16K per year, with anything over that going to the government, prices would fall because people couldn't afford to buy at current prices.

If there was a hard-left government who deported/murdered millions of people, prices would fall because there would be fewer people chasing more properties.

The situation is how it is because we live in a free society where people are allowed to earn more if they work hard and educate themselves.

The situation is how it is because we live in a free society where people are allowed to earn more if they work hard and educate themselves.

That's rubbish, we now have an issue where how much you earn is less relevant then whether your parents own & if they can help you & how early they can help.

We also need more social housing

@DGRossetti

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.

Yep plus if you elect idiots, they grant planning applications without thinking about infrastructure. No new schools, no new hospitals, no extra GPs, nothing. There's no wonder NHS, police, schools etc are struggling. There's no thought behind them. The only thought is for new houses, with 10% for 'affordable housing'. Affordable for who exactly, surgeons?

The small starter home I bought in 1992, when I was 22 and earning £4500 pa cost £42k, about 9 x my salary.

The same house is currently on the market for £350k, which means an "equivalent" 22yo's salary today would need to be close to £40k .

I could give my DCs a decent sum towards a deposit (say£50k) but they still don't stand a chance.

@DGRossetti The root of the problem is not supply. There are plenty of empty properties. The root of the problem is indeed low interest rates, which in turn encourages borrowing/demand, whilst landlords don’t want to sell.

It depends where you want to live. We bought in 2020, a 3 bed (3 doubles) end terrace with scope to extend. Paid £140k - but we live in a small boring midlands town near a smallish city.

But now we both WFH there is no need to live somewhere more expensive so we can have a nice life, near family at a price we can afford.

Plus people are choosing longer commutes /increased remote working & affordability is already stretched in London so that's impacting prices elsewhere.

I read that more FTBs left London last yr to buy. My part of London has stagnated since Brexit & without increased equity people were stuck hence the stamp duty caused so much activity.

Higher taxation on second homes, holiday homes, Air BNBs would be a very good start.

But, instead of that, Covid grants were lavished on the likes of Air BNBs during covid restrictions. I've got clients who got over £28k of grants per property, which is far more than the rents they lost. It's madness.

For a start stamp duty on second homes needs to be increased again. Then we need to charge business rates on homes that are rented out (i.e. remove the small "business" exemption for property businesses) and massively increase the rate of business rate charges. Then go further and deny tax relief on interest for holiday rental homes.

Far too many "normal" homes have been bought specifically to rent out, especially via Air BNB. The tax system needs to discourage that.

Higher taxation on second homes, holiday homes, Air BNBs would be a very good start.

agree & higher CGT

@abbey44

It's not everywhere in the UK. I sold a house last year in the north-east at the same price I'd bought it for ten years before. Prices have risen a small amount in some parts of the area, but very many people are in the same position as I was. When you're in that position, hearing of all the other massive price rises elsewhere stings a little...

Me too, in the Scottish Borders. House 'worth' the same as when purchased in 2006. Lots of space for the money compared to 'down south' but almost no jobs ('Shepherd' anyone?) and they pay badly (ave 16K p/a) plus no public transport to speak of, expensive heating, awful internet, expensive food (no choice of shops for 10 miles).

but yes, the UK disparity between wages and expensive (often poor) housing stock is awful, plus the real lack of protection / security for renters. But that is what happens when the country is run by priviledges millionaires who know little of average lives & care less.

My parents bought a house in Chelsea on an NHS doctors wage for £12,500 in the 60s. They now sell on that street for £6.5-7.5m. Don't think any NHS doc is going to be able to afford that! It is incredible, but people do buy them so someone has the money.
I now live in a three plus box terraced house in SW London. It's a lovely sought after neighbourhood with average price of just over £1m. And it's full of young families. I guess they have well paid jobs - my immediate neighbours rent (about £3k/ month), both are civil servants and cannot afford to buy here.
I can afford it due to starting on the property ladder in the 1980s, and inheriting from my husband.

@TomPinch

It's not just the UK. It's worldwide.

Too true. A young Singaporean woman - part of dh’s extended family - who was married this month, told me a few months ago that she and her fiancé had been outbid on flats to buy nine times.

As we know from friends in Melbourne, prices are beyond crazy there, too. Ditto Vancouver.

America is popularly supposed to be relatively cheap, but not all areas are. Two years ago a sister sold an ordinary enough suburban house in Cambridge, Mass. - not at all the sort of large house you see in movies - for $1.8m. It sold the first day - and two viewers offered more than the asking price.,
Not many years previously she’d sold a similar sort of house - admittedly not in such pristine condition - just a couple of doors away, for around $650k

@user1497207191

Higher taxation on second homes, holiday homes, Air BNBs would be a very good start.

But, instead of that, Covid grants were lavished on the likes of Air BNBs during covid restrictions. I've got clients who got over £28k of grants per property, which is far more than the rents they lost. It's madness.

For a start stamp duty on second homes needs to be increased again. Then we need to charge business rates on homes that are rented out (i.e. remove the small "business" exemption for property businesses) and massively increase the rate of business rate charges. Then go further and deny tax relief on interest for holiday rental homes.

Far too many "normal" homes have been bought specifically to rent out, especially via Air BNB. The tax system needs to discourage that.

"That's nice dear"

as my late DM would have said about something which will never happen.

What’s needed is a massive massive investment in proper social housing. Not shared ownership and not for-profit rentals. But decently built, decent sized, decently maintained housing stock with secure long term stable rental contracts. No right to buy. Rents capped and reflective of costs to the council/housing association.

Take out the need to buy in order to provide stability by making long term rental an equally secure method of having a home. And then take out the impossibility of buying (because rent so much higher than mortgages you just can’t save), so that people can save for a deposit and buy something somewhere else if they choose to.

Where ex council places are being sold give the council the right to first refusal to buy it back (at market rate), and add it back into rental stock.

Can’t happen. Would cost billions. But I can dream.

Locally we’ve hundreds of new builds going up. But people living in decent but older 2 bed terraces can’t sell, everyone wants the shiny new build with the tiny garden. So get housing associations to buy them up and rent them to people currently crammed in one beds and b and bs.

@SilenceOfThePrams

What’s needed is a massive massive investment in proper social housing. Not shared ownership and not for-profit rentals. But decently built, decent sized, decently maintained housing stock with secure long term stable rental contracts. No right to buy. Rents capped and reflective of costs to the council/housing association.

Take out the need to buy in order to provide stability by making long term rental an equally secure method of having a home. And then take out the impossibility of buying (because rent so much higher than mortgages you just can’t save), so that people can save for a deposit and buy something somewhere else if they choose to.

Where ex council places are being sold give the council the right to first refusal to buy it back (at market rate), and add it back into rental stock.

Can’t happen. Would cost billions. But I can dream.

Locally we’ve hundreds of new builds going up. But people living in decent but older 2 bed terraces can’t sell, everyone wants the shiny new build with the tiny garden. So get housing associations to buy them up and rent them to people currently crammed in one beds and b and bs.

See previous post ...

I live in the rough town in the area, the next town over any 3bed+ house on a private estate will be close to £1m. The whole town. What do all these people do for a living?!

YANBU. It’s also reflected in the rental market, we pay 900pcm for a 3 bed, we now need to move and every 3 bed that suits our needs is at least 1100pcm, I don’t know how we are supposed to find 200/300 extra each month to afford a new rental?!

@MorningStarling

+1 for supply and demand. Houses go for what people are willing and able to pay for them.

If there was a maximum wage of say 16K per year, with anything over that going to the government, prices would fall because people couldn't afford to buy at current prices.

If there was a hard-left government who deported/murdered millions of people, prices would fall because there would be fewer people chasing more properties.

The situation is how it is because we live in a free society where people are allowed to earn more if they work hard and educate themselves.

I don’t disagree with wage caps but £16k a year??

What do you think people working on the checkouts will be expected to live on if that was the maximum?

Things may shift, we have an ageing population & heavy income tax burden. I think more young people with skills will emigrate for a better quality of life. We are already seeing it with doctors.

We have a skills shortages but high youth unemployment. It's a mess, thank god mine have European passports.

plus the wage stagnation for two decades!

I also forgot to add in order to rent a property for 1,200pcm you need to be earning 36k!