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)?

Not read the full thread just the OP.

Sorry OP but houses in outer London in the mid 80's were not £50k !!

I bought a studio flat just outside the M25 in 1988 for £47k. A studio flat. At that time affordability was a stretch at around 4x income.

We have pretty much created a vicious circle where ppl feel they must own a property to not get left behind. If property contains to inflate as it has, the issues of home ownership and unaffordability won't just affect London, but most places in the UK and for future generations, your lifestyle will be determined not by how hard you work but by whether you inherited - that's already the case in some areas but this will be widespread in 50 years.

That's not great for society.

The joke is on us average ppl because while we are doing our best to ensure we have something to leave to our children, the gap between rich and poor will get wider and for future generations, ppl will be fucked unless they inherited.

My average home doubled in price in 8 years, not in London, and I'm not even that old. I'm late 30s. This is unsustainable and basically fucks us all in the long term but of course I won't give my equity away because i need to pass it on to my children one day so they stand a chance in future. It's a huge issue and I recognise I am a part of the problem. My next house purchase will be significantly more than i ever thought I'd pay for a house for a smaller one than I'd hope, but I will no doubt pay it anyway to try and not get left behind.

I would be open to any solution but it needs to be one that everyone goes along with. I worry massively for future generations

This is just one example though surely? I bought a 2 bed garden flat in zone 3/4 ( could walk to either station within 10 mins) for 97k in 1998 (aged 19!!!) Sadly didn't make any money because ex-husband racked up massive gambling debts but if he hadn't? I think our combined income was about ,£50k when we bought (and when we divorced, after paying off debts we had about £5k each 😂 so NOTHING like now

Yes this

Well if we we’re going to make everything a level playing field,why would anyone study hard to achieve greater earning potential if they thought we were all going to get a home at equal cost to each other. Getting on the housing ladder, and climbing up it, is what we all strive for. If people can’t be arsed to work, or are just happy working in a minimum wage job, then that’s their prerogative, but they shouldn’t want to drag everyone else down.

I think more councils should be doing this:

https://www.nuplace.co.uk/site/index.php

Nuplace is not a housing association but a council owned housing company with reasonable/affordable rents. They have 72million in property assets and make almost 3million a year in profit even after investing in more properties.

I think it’s genius, because it’s essentially council housing but it’s not based on deprivation and so doesn’t pool together those in society who are most vulnerable and instead creates mixed communities with people from all walks of life. The homes are genuinely nice homes and in good locations too and give families the security they need.

I own my own home but wish these sort of schemes were set up everywhere so that my children could find affordable rents if they can’t buy.

Yes housing became expensive especially when 2 lots of MIRAS was abolished

IMHO, it's not house prices that have risen too fast, but rather wages have risen too slow. Every year you accepted a raise less than inflation - or none at all- has contributed to this.
The difference is important as the solution is to now make wages raise faster. Good luck with that btw! This is what end-stage (or at least i hope it's end stage) capitalism gets you, sadly. We need unions back, we need better rights for employees etc. But even with labour in power, make no mistake, things will take years and years to improve -and that's if they steer a clear course and don't waver (big big if).

Tldr: there's no quick solution and the long term one is hard to implement. If all goes well, the toddlers of today MIGHT have a better chance.

But if things carry on as they are, it won't matter whether you earn minimum wage or equivalent of 50k. You will be fucked either way unless you inherited. We already have a situation in London where hard working ppl who contribute to society and have studied for their careers for example teachers and nurses, struggle to afford to buy in certain areas and this is only going to become more widespread.

The difference you can make to your lifestyle by achieving a salary of say 50k compared to minimum wage is negligible if the next person can come along and put down a 250k deposit because their parents bought a house in the right location 40 years ago and this gap will widen as time moves on.

We are not too many years off from creating a society where hard work will count for nothing. However no one will do anything to stop this because as my previous post, those of us who are home owners will make sure we can set up our children so they are not left behind and so the cycle will continue.

When the baby boomers die off, billions will be inherited. Anyone not receiving an inheritance will be massively left behind and no amount of studying hard is going to get you the equivalent.

This is a great idea. I’ve been saying for years that the government should be encouraging responsible corporate landlords that can offer this kind of high quality housing, but public-owned is even better.

And also, as other posters have said, hugely skewed by area. House price increases in the SE have been of a different order of magnitude than anywhere else in the country. And the massive profits made by people who happened to benefit are entirely random, nothing to do with hard work or good judgment.

Agree. If it went that way I’d sell up, travel and then come back and demand benefits. Why on earth would I bother working the hours I do if I’m going to be penalised for it?!

What do you mean by type?

How do you account for the fact that the same property is worth more or less depending on where it is?

If all houses of a given type cost the same, then why would anybody spend money on improvements if they weren't certain that they would be staying there for at least a decade?

But if first time buyers can’t afford anything in the nice area they would like, it just means they might have to make do with a small one bed in a not as nice area. Then in a few years, they see another house in a nicer area, sell and buy that one, and so on. When I started out many years ago I bought a back to back in a nice area, but had to compromise on no garden, a tiny kitchen and one bedroom. I climbed the property ladder every few years until I got my nice three bedroomed house in a nice area with a garden. Took a few years, but that’s how it works. First time buyers now want to skip the pokey little house, and go straight into buying their three bedroomed lovely home straight away. There will always be a two tiered housing population, always has been and always will be. Those who achieve their dream of big house in nice area, and those who can’t afford and live in rented or tiny homes in run down areas.

More affects the value of a property than just inflation FFS 🤦🏼‍♀️

But that’s because the salaries in the South are a lot higher than those in the North, so it’s all relative. If people in the South want housing as cheap as the North, then their salaries would need to be cut to make it a fair playing field.

I meant more from the perspective that people in the South will inherit very significantly more than those in the North because of house price differences- further entrenching the N/S divide.

Economic policy has resulted in crap wages & inflated assets. It isn’t sustainable, London property hasn’t performed as well as other regions over the last decade I think.

My parents bought a three bed house in Zone 2, in 1987 for 78k. It was a doer upper but even if it were in that condition now it would still be pushing a million.

But if first time buyers can’t afford anything in the nice area they would like, it just means they might have to make do with a small one bed in a not as nice area. Then in a few years, they see another house in a nicer area, sell and buy that one, and so on.

The idea of a property ladder doesn’t really exist when you have high entry prices and older FTBs, plus stamp duty costs. A 35 yr old has different needs to a 25 yr old.

Not true. One bed flats near me are £350k. There’s not a load of wiggle room upwards as the next step up is about £500k. On an average age that’s not easy to achieve. The property ladder can easily end at step one and stuck.

Sorry OP but houses in outer London in the mid 80's were not £50k !!

Parent and in-laws houses were 60-80k in early 80s in z3.

The property ladder can easily end at step one and stuck.

yep

And I’m sure a colleague bought a 100k house in the late 90s in Hackney.

Hackney and zone 3 are not especially outer London though. Harrow for example is two zones further out and is still outer London. It would have been even cheaper there.