House prices

[Socialmediamakespeopleunhealthilycompetitive]

In the mid 80s there were 3 bedroom family houses in ok areas of outer London for £50k, around 2.8 times a decent officeworkers salary. The same houses are now around £450k & ten times the same workers 2024 salary. I realise interest rates, even after recently hikes are somewhat lower. Since the late 90s I have wondered when people will demand government action on this, amd actually see lower housing costs as a good thing. When the above house was £200k ca. 2003, and 6 times a decent salary, I thought action might happen. Is the point at which action is taken the point at which the transactional costs of middle class young or middle-aged people buying their own home even wirh an inheritance become prohibitive? Do people doing jobs they don't like or which damage their health to pay enormous mortgages in expensive locations, London, Oxford, Cambridge, Dublin etc ever think about the opportunity cost of sitting on equity which could be invested to earn income if they relocated to a cheaper area? How on earth have modest, poorly insulated houses including those in rough areas been allowed to get to this astronomical level? Why is it politically unacceptable for a party leader to say they want to engineer lower house prices, perhaps even say 75 orn80£ lower (still leaves the million pound househat 200k)?

Where people who work full time in minimum wage jobs cannot afford to house themselves this country is broken.

Where people on average jobs cannot afford to aspire to the security of home ownership this country is broken.

The young people in this country have realised this and are mightily annoyed. So many in older generations are ignoring this frustration.

It isn't simply 'house price inflation' - it's inflation in general. If the same money had been invested elsewhere besides property it would still increase. GDP and house price increases are correlated. Economic events can swing things one way or the other for a few years but they generally come back into sync at some point in time.

In fairness people can ‘dare’ to have an opinion.

I’m benefiting massively from family wealth, but huge inheritances create a less equal society. Is it something I think should stop? … well there in lies the problem.

We’ll just have to wait until the imbalance gets so great that the downtrodden riot. It’s happened before, it’ll happen again.

Why should there be a 100% inheritance tax?! I’ve already paid tax on my money thanks - why should everything be taken by the state at the end? That would also just likely result in everyone pissing their money up the wall rather than saving (thereby fuelling inflation) - I know I would!

The average salaried income is approximately £35k. It is true that these days we mostly need 2 salaries to afford a home (however a single person could potentially purchase a below average priced home). A multiple of 4.5 x £70k = £315k. Plus a deposit of say 10% plus a few £k for fees is around £16000 per person would result in a purchase price of £346,500. The average UK house price is £281,000.

So in summary - the average person (couple) can afford home ownership. A big blocker is the deposit saving and the stamp duty free purchase for those in this position compensates for this somewhat. But is still difficult to save usually due to high rental payments.

You see. This is where people like you come unstuck. My dad for want of a better word is a scrounge when it comes to spending his money. He chose to buy the nicest house in that bloody pit village and stay there. Much to the despair of my poor mum. His house has increased in value but it’s a modest house. His income has come from working his arse off and saving. Building a business that employs a lot of the people in that community and saving. Making wise investment choices and saving. Do you want to call that unearned wealth as well?

So do you think inheritance tax should be limited to 'untaxed earnings' as you call it? So the mortgage payments this posters dad made for decades to pay off his mortgage should be exempt because he has definitely paid tax on that part?

I'm not sure where rent/house prices are going to go. As cost of living here increases employers are reducing their workforce (and therefore cost) for mid 40-100k level earners to replace them with cheaper offshore people so going to impact more and more people at traditionally able to afford a house levels

Not really. Wasn’t there a post on here the other day about how someone was spending benefit money? People would be up in arms if I told Karen she can’t buy cigarettes from her universal credit. It works both ways. What happens to Earned income is nobodies business once it’s taxed.

There are generous IHT breaks for passing on a business, and he can pass on a lot of his wealth prior to IHT being applied, but after that, he’s just a wealthy person and the recipient of that wealth (the beneficiaries of his will) have not done anything to earn it, so it is right that it is taxed.

A large forced price correction (if even possible) would push loads of people into negative equity and cause chaos in the economy. All we can hope for is a drop of a couple of percent a year, but mainly building enough new houses to keep the housing costs from growing and let wages rise so that they are a smaller multiple of income. It's taken 40 years for the change you outlined and it will probably be another 40 years before that happened, even if the government set out to do it.

It had already been taxed via income, corporation and capital gains tax.

Children that have parents that worked themselves to death generally missed out on seeing their parents at school events and were ferried between Nannie’s, boarding schools and childminders. I always find it so offensive when people say the children didn’t earn their inheritance.

Plenty of people who work hard for a living live in council housing. We need significantly more council housing in this country. We need shop workers, care workers, nurses, teachers, etc, in London and other expensive areas of the country and they all deserve affordable secure accommodation.

So you want to receive your inheritance tax free? So what tax ought to increase to pay for the loss to the exchequer? Or what public service do you think ought to be cut? Who is less deserving than you?

i think stabilising house prices and increasing salaries is the way to go, obviously long term to achieve this

if you just knock the value off properties you’ll have people in negative equity

Everyone advocating for a 100% IHT rate is forgetting the bleeding obvious which I think one poster mentioned - unintended consequences and behaviour change.

I can almost guarantee that it would raise less money for the Exchequer.

Is this a joke? Plenty of kids have a much worse childhood than this!! Where's their "earned" inheritance? Frankly I think most would find your opinion incredibly offensive

I agree, especially with salary increases. This is at the root of so many societal problems.

Sometimes it just takes time to get where you want to be. Husband income £45k, mine £35k. We currently live in a house worth we think about £850k. My salary is national average, husbands just a bit more. No inheritance. Both worked through uni but took student loans, used these as deposits to buy do-er upper properties separately for around £90k in 2003, both earning around £18k at that point. Did them up ourselves around full time jobs, sold for around £160k. That gave us around £140k equity after expenses. We used that to buy a £300k house in outer London, did it up, sold for £490k 6 years later. Bought current house at £680k, again did it up and now worth around £850k with a 200k mortgage. Yes it took over 15 years from start to finish, but with hard work, good financial sense it can be doable.

@Bushmillsbabe I don't think it's really possible to make money by doing up houses for the average person these days. Since covid prices have gone up SO much.

Not everywhere in the country has had the enormous price rises seen in London. My house is barely worth more than it was 15 years ago despite ploughing money into maintenance and upgrading. Maybe if you could correct the prices that actually need correction and leave the rest of us alone?

I’m torn on the Inheritance tax too because the very wealthy will pass on their wealth outside this system (who was the son that inherited 32m tax free?) and us ordinary serfs will be the ones paying. Two fingers right up to social mobility yet again.

Agreed. Research has shown that the IHT rate that would raise the most would be 5% with no exemptions. That’s the sort of level that the really super rich wouldn’t bother avoiding.

We live in one of the areas you mentioned to be close to family including elderly parents and because we like it. Didn’t realise we were just too stupid to be aware that there are cheaper areas we could live in, how silly of us!

I've advised my daughter to leave the UK when she starts working, nothing for her here but slavery for a 1%'er sitting on huge land/property wealth wanting a second yacht. I'll be sending my inheritance her way so she has an easy life.
Australia beckons, lots of land, good work/life balance, larges homes, encouraged to start families.

My inheritance has been tax free thanks. There is no loss as they were never going to get their hands on it.

But I don’t know maybe cutting waste in the monster that is the NHS and using the money properly. There’s also the quangos that have spent almost £1 million on support groups hosting events such as lectures on the 'Queer History of Tango'. The issue for this country isn’t how much we tax people but the ridiculous amount we waste on stupid shit instead of the necessities for people to have a basic standard of living.