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)?

@Tiredalwaystired which was my point…

What we miss out on in this country is good quality long term rental accommodation. They do this well on the continent (in Austria it is done particularly well by the state). A company wants to invest in an asset that has a long term good return so builds some nice flat, lets it to nice people, they know they aren’t going to get turfed out at the drop of a hat, the landlord gets a consistent return on investment.

This doesn’t happen in the UK. The private rental martlet is a hodge-podge of buy to let investors, stopping people from decorating their flat, never doing repairs, kicking people out at 3 months notice to try to find alternative accommodation in their child’s school catchment. The stress of our poor private rental options is why we want to buy in this country, not for some sort of ‘social aspiration’ fgs.

What was your point?

Yes I completely agree. But they also deserve to own their own homes and not have to rely on the council. I’m sure they don’t want to live in council housing and would prefer their own home. Therefore we need more affordable homes.

The way the financial and emotional needs of single people are utterly ignored is one of the great undiscussed scandals of modern life. In Covid many of the political pronouncements and some truly appalling posts including some on this website derided them or acted as if they don't exist. Not everyone's path in life is to be with someone. Even if they do, what if the partner is financially insolvent, has to support needy family members elsewhere or is in another way incapacitated? But no all the politicians and media do is harp on about hardworking families

@Tiredalwaystired what part wasn’t clear?

Citing a 100k house in the nineties somewhere not in outer London when the initial comment was about 80s house prices in outer London. I wasnt sure why that was relevant.

We defo need more social housing & better rental options. It’s much harder to build wealth here unless you own which isn’t right. If your parents own & can help you onto the ladder is more important that your job/salary.

@Tiredalwaystired my initial response said the below

*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.

I thought it was obvious that if a house was 70k in z3 then you could easily get one in outer zones for 50k. My later comment about Hackney was just illustrating how much price growth there has been in some areas, that Hackney house is like 1.5m now.

I certainly never claimed Hackney or z3 were outer London 😆

Whilst most people will empathise with the sentiment, all that can happen now is a cooling down at best. It won’t/can’t take a big hit for all the obvious economic reasons.

The best outcome is a steady increase in new housing supply which should result in slower property price growth, such that values relative to wages reduce as wages rise at a faster rate.

This is exactly what the current government are trying to do with various programs to increase housebuilding. We just need to give them a solid couple of terms in power for the impacts to start to really be felt.

I think labour or any other future government are going to come after some of that housing wealth. It’s inevitable as we need money, the costs of an ageing population are ££££

https://thelondonweekly.net/uk-news/7337-london-house-prices-lag-behind-rest-of-uk-for-past-eight-years

I certainly know of flats in London that sold for the same price or less as 5 yrs prior.

What would that look like, though?
I live in a house worth far more now than when I bought it. I actually earn less now than I did then and my monthly salary covers my expenses but nothing extra.
My house is the right size for my family, no spare rooms.
What would I pay any extra expected of me?

thats where we fundamentally disagree as I don’t think a home should be a reward to be “worked” for (in quotes because some of the hardest workers don’t earn enough to buy a property in some locations, hard work doesn’t equate to wealth).

A secure home is just a basic need in a fair society. It would be a nicer world as well if people had the freedom to pursue passions and arts and creative pursuits rather than feeling pressured to “work hard” for a home, if affordable accommodation was a fact of life.

An unemployed person being able to access a home as easily as a lawyer or a surgeon takes nothing away from people who choose to pursue those jobs. If you feel you need to be motivated by a cut-throat society that penalises people for being poor and takes away their access to basic living standards, I find that depressing tbh. We don’t live in a meritocracy now, it’s all predicated on familial wealth, so levelling the playing field for those at the bottom would take nothing away from those at the top.

Single occupation households are fuelling the housing crisis. Around 10% of houses were occupied by a single person in the early 1970’s. This has risen to 30% due to longevity and the rise of single parent households and people just choosing to remain single. It’s a huge societal shift. I mean a few of my friends live in family homes alone now mainly due to marriage breakdowns and children that have now left home. This isn’t a they shouldn’t or any debate about should it be allowed it’s just an example of a massive change. I mean in my row of big three bed semi detached houses with drives half are occupied by a single person.

It's probably because first time buyers are now much older. Trying to fit two adults and a teenager into a pokey studio flat when you are in your 40s is quite an undertaking.

The problem with this kind of idealistic thinking is that actually meeting someone's basic needs isn't easy. It is something that has preoccupied humans since the dawn of time and requires a lot of time, energy and resource. The act of building a house uses land, materials and labour. The idea that a house is a basic entitlement assumes that someone else (who?) is duty bound to expend a hell of a lot of effort and resource to build a house for someone that has no obligation to expend any of their effort and resource to do anything at all.

This is the fundamental problem with entitlement. The buck has to stop somewhere with someone or nothing would get done. Someone has to work out in the cold and rain laying the bricks or carting around heavy loads on the building site. Someone has to dig up the earth doing the ground works or even clean the house at the end. They may well all want to pursue more creative and fulfilling occupations too but we need housing (and food and clean hospitals).

DH and bought our first home together in 1991. Three bed semi for £85k. Now worth £450k. It’s our forever home, we have no interest in moving up the housing ladder for the sake of it, it will help pay for care home costs should that be necessary.

@jellycatandkittens I think some will be indirect, eg you need that operation but the NHS waiting list is 3 yrs so option is to go to private or wait. And something similar to Teresa May’s tax, including the value of the home when calculating care in the home costs.

Housing has become a status arms race. Round by us some people saddle themselves with massive mortgages as the 5+ bed detached is the expectation. Clearly not everyone has to borrow or be burdened by it, but many are.

Tbh people will have to fund private care as there aren’t enough carers anyway, some relatives of mine wanted to stay in their house until they died. The state provided care was woeful, no continuity, unreliable etc so they paid for their own private care.

Round by us some people saddle themselves with massive mortgages as the 5+ bed detached is the expectation.

Round by me some people saddle themselves with massive mortgages for a flat but it’s still cheaper than renting.

Get rid of Stamp Duty and Council Tax. Introduce new taxes to raise the equivalent - Annual Land Value Tax and Poll Tax.

Stamp Duty is a daft tax only paid on specific purchases. It acts as a friction stopping people from moving - up, down and geographically for work.

Council Tax based on simple bands created 30 years ago is also daft. Mega mansions pay as much as homes a factor less. Some people avoid it altogether.

Annual Land Value Tax (ignore farms, forestry, etc for now) would apply to the amount of land owned, how it has been developed and its current value (the more your home is worth - the more tax you pay every year). Landlords would pay this tax along with homeowners. Will encourage (not mandate!) empty-nesters to give up large family homes. Second homeowners need to pay on second homes.

Poll Tax paid by every adult living at an address - homeowners and tenants - who benefit from local services. Brings equity when two equal homes are inhabited by one or four adults.

This should organically lower out of control house prices since out of control house prices would trigger corresponding tax bills. Tax bills will significantly increase in more expensive locations - such as Westminster.

A last measure would be to add house price growth management as a BoE target. Raise/reduce rates also corresponding to house prices.