House price madness

[Jadedbuthappy82]

Sorry to rant, but how on earth have house prices been allowed to rise so ridiculously. The going rate here for a basic three bed semi is £300k... The same houses would have sold ten years ago for less than half of that 😩

Yep buy to let

You only have to watch homes under the hammer

@Echobelly i reckon it’s becuase banks relaxed their lending rules , lending bigger and bigger multiples of income , lending to sub prime customers, this caused the problem in 2008

We don't need a mass house-building programme at all.

I agree. Also, more department stores are being converted into apartments. We need to get cleverer with our living spaces.

We moved from the South as we were priced out. Just about to buy a 3 bed semi for 180K in the East Midlands. In fact, where were are now I believe is the start of the curve in the other direction. We'll soon have too many homes and not enough people to buy them when the ageing population dies. We'll be like those Italian villages selling homes for 1EUR to entice people in!

Yep.

Years of low interest rates have fuelled house prices. People can borrow so much because interest rates are low. If interest rates had been up at 9, 10,12% the way they were back in the 90s people simply wouldn't be able to afford to borrow as much. Houses can only sell for what people can afford to borrow to pay for them

Lowest interest rates in centuries, people being encouraged to take on massive debts (mortgages) as "house prices only ever go up", governments allowing predatory BTL to run rampant and giving them loads of advantages over normal house buyers, free taxpayer money being thrown at the bankers so no need to offer good savings rates, taxpayer cash being paid to landlords as easy money (housing benefit), all mean that normal people have to partake in the risky UK housing casino if they want the basic necessity of a roof over their head. It's an absolute abomination.

There really isn't one single reason why house prices have risen- it's a combination of factors- however, low interest rates are one of the main reasons- most other reasons are fuelled by this including the rise of but-to-let, people borrowing more, people saving less etc.

We bought our house five years ago for £180,000 ( in a decent condition not a run down project) there are similar/same houses for near enough double that on our road/estate. Ridiculous. 3 bed semis. Some extended slightly but not all.

Houses were flying out with multiple offers over up to a few months ago. Not any more they are often on for weeks/months so I think the ceiling/over pricing has reached its limit. Expect to see reductions or being taken off.

We brought an end of terrace ex council house last year for 248
its in a nice area and was the cheapest house we had seen (no drive)

it’s shocking
a friend of mine brought a second house so her children won’t have to buy

Simple answer is supply and demand. Demand will always outstrip supply so prices continue to go up, especially when “property developers” can buy up
huge swathes of low cost housing for their pension pots and push up rents and values. It’s a racket that favours the rich and means everyone else is shafted. So many middle class property owners buying second properties as a legitimate passive income stream. Nice for them - crap for everyone else. I blame Sarah Breenie.

@LunaDeet that’s such a good point about the ageing population - I’d never thought of the impact of that on the housing market. I wonder if foreign buyers will buy those houses that become empty? I guess it depends on how desirable the area is that those houses are in.

Zone 6
3 bedroom +1 bathroom ( either terrace/end of terrace ) £425 going to £550 for semi detached

My DS constantly saying about how can people afford homes (though most FTB won't be going to 3 beds unless they have a load of deposit saved)

House prices are crazy in my area (NE). My (council) estate is next to an expensive estate, where people are getting out priced, so are buying on my estate, which has then driven the prices on my estate up. In 2 years my house has doubled in value. I'd love to sell and move somewhere a bit nicer, but the prices are crazy!

Wow, I'd love to be able to get a 3 bed semi for £300k

My DF brought in a very nice part of West London in the 60’s. Didn’t look after his house but when he moved into care home I noticed all the neighbours were people in their 70’s in houses much too big for them who probably couldn’t face a clear out so they stayed where they are.

You could say they should sell their house and release it to a young family but who has over £ 1m! Ironically his profit is being eaten up by significant care home fees so someone is making a lot of money out of him.

Too many buyers from abroad. They don't even want to live in them .
we can't ever have enough housing if this isn't stopped

When Gordon Brown/Tony Blair messed with the tax on pension funds, it was the death knell for the guaranteed final salary pensions. So many people turned to property investment. Hence the proliferation of "amateur" landlords. Who were buying the kind of property suitable for first time buyers. Which elevated the cost of same. Throw in buy to let mortgages and low rates and here we are.

We were having to race to save. It was seriously going up about 5 thousand pounds a month.

We finally managed after lending a couple of grand from a friend (literally borrowed the money for 2 months just to keep on top of the rising house prices which I am so thankful for aswell) and managed to get the worst house in the worst area. The seller could have gotten more but she wanted to sell to a family and not a potential landlord which I'm thankful for every day)

After one year the price of our house went up by £50k
in one year. If we hadn't borrowed thar money just to get the ball rolling quicker we would never have a chance.

5 years ago this house would have cost 70k less. How it is possible I don't know.

it means nothing to us because we aren't looking to move until the kids move out and we have nearly 2 decades to wait for that. When we can we want to buy something tiny and some land. maybe a caravan on here for family. We would do it now if we could.

@vickibee - yeah, that was my best guess that it might be when they allowed 100% mortgages etc

I don't know what the answer is. House prices need to fall, but then you end up with a retirement crisis of the people who are relying on downsizing when they retire, but I suppose one could argue it's a relatively small cohort and you'd just have to find ways to support them. But a lot of things have become reliant on borrowing against a home.

But it isn't sustainable - at this rate, if my kids want to live in London, unless they manage to make ££££ in their 20s, they'll basically be dependent on their grandparents' deaths to have a deposit for anywhere and you'd hope that would not be until they're well into middle age, but even then a 1 bed broom cupboard in the suburbs could cost 3/4 of a million by then!

Low interest for far too long and high demand.

It's obviously more convenient to blame other people especially landlords but house prices have roughly doubled on average every decade since records began.
It's really dangerous to tell dc to wait for grandparents dying for your deposit. Makes them get used to relying on handouts from others.

It is bonkers. But have to disagree with talking about it being "allowed". It's not the government setting house prices - it's supply and demand.

We all need to stop having more kids and going to Airbnbs. The population is growing, we live a small crowded Island and don't want the fields built on. Space to build houses isn't readily available - so is expensive and only going to get more so as population grows. We also like going on holidays and nice little Airbnbs - owned by 2nd home/ property developers who snap up whatever they can to turn a profit.

We could build blocks of high rise flats on all the fields. Pass legislation to prevent anyone owning a second home or a house any bigger than necessary. Holiday homes aren't allowed, all houses have to be your only house or you're forced to sell it to someone that will live in it. If you have a spare room you have to allow someone to live in it. The government introduces a 1 child policy and buys up everything, knocks it down and builds 2bed council flats. But I don't think any of us would fancy that either. I don't know what the answer is. Blaming the 'they' probably isn't it though.

People buying and extending isn't helping either. Where I'm from had lots of houses built in the 60s. Not terribly big houses, but on big plots (separate garages, and big gardens).

There are hardly any left that are the original 2/3 bedroom starter or small family homes, and they're the ones still being lived in by their original buyers! The others have all been extended to be 5 or 6 bedrooms, and are very expensive.

The only new houses built recently have been 4/5 bed executive homes, so there just aren't many houses that you can buy as a first step on the ladder.

I completely understand why people extend by the way, nicely settled in an area and want more space etc, but the style of house they're extending doesn't get replaced.

You could argue that's it's the notion that everybody should own their home and the actual decrease in rental properties that has caused the continual rise in house prices through the decades, rather than an increase in rental properties from buy-to-let schemes. In years gone by only the fairly wealthy owned their houses, the working class lived in properties rented from the land-owners, the mill owners built and rented purpose terraced houses to their workers, and the successful built properties on their land for the sole purpose of renting them out. If those of lower incomes didn't want to own their homes, then demand for low-cost houses would be lower, so house-prices would be lower, and rents would be lower. It's mainly a supply and demand issue which has been able to continue because of low interest rates.