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)?

Council Tax should be revalued on a property which has any extension and increased immediately once the work gets signed off by Building Control. At the moment it is only revalued once the property next sells.
For example, 4 properties in my road were purposely built 4 beds, all CT band F.
Many of the 3 beds (all band 3) have been hugely extended and are now more sq ft than the 4 beds but they are still band E, apart from one which was revalued.
Local Authorities are seriously struggling financially so that could help to plus the gap and support adult and child social care.

I just don’t agree for all the reasons mentioned above. Security and support. Everyone is entitled to their chosen space.

Where does it stop? Making people who bought a family home in the hope of having kids move out if they’re infertile? they don’t need the space either based on your take.

Nobody is making anyone do anything. Tax is regularly used to incentivise behaviour that is deemed good for winder society. What to smoke? Fine, but we’ll tax you heavily to help fund the NHS consequences. Want to use the UK housing stock in an inefficient manner? Be my guest, but you’ll face more tax for doing so.

You've only paid tax on certain things though: earnings, vat and duty on purchases, stamp duty etc.

You won't have paid tax on the massive increase in the value of your property, which for most people is their biggest asset. I don't see anything wrong with paying tax on that when you die.

100% would be a bit much though.

Bedroom tax you mean? That was popular.

Also how do you police? Child moves out, tax goes up. Child moves back home again tax goes down?

@Ratisshortforratthew

youre right about one thing.

people wouldn't vote for those policies.

Thank God you're not in a position to do it

We live in a Capitalist society. Prices will keep going ever higher, as long as there are enough people to buy them at the higher prices. The BIG problem is that there are way too few social housing houses being built with reasonable rents

The bedroom tax is actually popular. The majority of the UK public think the state shouldn’t subsidise housing people in houses bigger than their needs.

And the tax is based on the value of the property, not on the number of people living there. The number of people living there makes no difference to the tax. It would give people living in homes larger than their needs an incentive for downsizing.

There's a large demand and not enough supply so prices will continue to rise, especially now they're starting to cut interest rates

OP, there is a guy called Charlie Lamdin you might be interested in. He talks about the influence of why house prices being overvalued by agents and the likes of Rightmove influence house prices negatively for most people, and why the data available for houseprices is really poor quality. People's ridiculous expectations on price make moving unecssarily slower and harder for people and unaffordable for buyers. I'm not keen on everything he does, but is is quite enlightening, but not necessarily surprising that the market is massively fudged to encourage increasing prices. He also says there is a fuck ton of land to build on and it is just not being made available.

This just makes no sense. If poll tax is being used to cover the cost of local government expenditure then this would be hugely controversial. The bill would be pretty significant per person and at risk of massive increases as the burden on our local government budgets increases further. Considering how the introduction of poll tax went down in the 1980s, why on earth do you think it would be more popular or workable now?

I also think swapping Stamp Duty for DVLT could have lots of undesirable consequences including the fact that it would actually remove a barrier for people wanting to invest in property, especially property flippers who could buy more easily than they can now and then sell it on quickly.

Property is a fine and in many cases a necessary investment. Not everyone wants to buy and we need good, responsive landlords. Many people are in temporary locations or circumstances and it wouldn't be practical for them to buy. Some are just not in a financial position to buy and that's ok. We have never had 100% home ownership in this country or even anywhere close to this. As I mentioned earlier, lots of pension funds are invested in property and this isn't wrong or unethical either.

See earlier posts relating old poll tax with new poll tax. They are not the same apart from requiring each adult of voting age to pay a fixed tax for council services. The balance of council service cost (tbd by gov) would be made up with contributions from the progressive DLVT. I shouldn't have suggested these were one for one replacements. I was trying to make it easier to conceptualise.

Removal of Stamp Duty IS intended to remove a barrier to housing transactions. If poorly advised investors wish to try to take advantage of that then they must be prepared to suffer potential losses as all investors do.

Property is never a necessary investment because buying a home should not be viewed as an investment - simply purchasing security of tenure. Pension funds and other sensible investors invest in REITS or portfolios of thousands of properties. Buying one or two is a foolhardy "investment". The secret behind successful investing is diversification to reduce risk - not putting all your eggs in one basket.

It's ok to rent. Many do out of choice and many do out of necessity. Institutional landlords should service that need - not loads of Rigsby's.

What’s the point of working hard, saving and being frugal when you STILL can’t afford to buy a home? Meanwhile you watch your peers go shopping with massive handouts of family wealth as they race off miles ahead of you. Hard work paid for a very short period in history, it certainly doesn’t anymore. The gap is growing wider and wider. @Hellogoodbyehello4321 has it spot on.

’But my parents earned it’. Ok, but what did you do to earn it?

Surely the point about inheritance is that no-one has to give it. It's not about a person's 'right to RECEIVE an inheritance but about the right GIVE it. Typical case of my parents, born in the 1940s. Left school at 16, modest paying office jobs, got hit badly by the late 80s recession but managed to pay off the mortgage on their 3 bed semi just outside zone 6 by retirement age. They've worked 48/52 weeks a year for 40+ years and often felt bad they couldn't help or treat me and my sibling more. What they can do, assuming no care fees etc is leave us some tens of thousands each when they die. It's what they want to do with their hard earned money. And it is earned. They struggled to keep up the mortgage payments, insurance, upkeep etc on the house out if their already taxed income. Surely it should be their choice to dispose of that asset as they please? If me or my sibling did something awful, or fell out of touch or whatever, they are free to disinherit us, or do equity release and spend it all if they like, that's fine, but it should be their choice. Their parents were blue collar cockneys, who always rented; they moved into white collar admin jobs and home ownership; my siblings and I are uni graduates with professional salaries, though not at all massive, sub 40k and are again, modest homeowners with mortgages (single households, not in SE anymore). Over three generations we've moved up gradually. My parents, and I when it comes to the next gen should be allowed to pass on what we've earned. That is the principle of capitalism and I'd the society we live in.
I do completely agree that a massive programme of council house building ought to be a priority and it seems an obvious way to me to create training opportunities, employment, generate growth through whole new towns, with shops, schools, leisure centres, libraries etc. Come out of the SE and there is plenty of space. Of course it has difficult aspects but I'm so sick of government doing small, easy, vote winning things instead of tackling the hard stuff with guts.

How would 100% IHT work? Would gov inspectors go to every house when someone dies, strip out everything and sell it, leaving descendants with nothing? My mum died with less than £10k and 5 kids. Would that all go in tax, after selling all belongings. Who would sell all the belongings? We arranged the clearance of mum's goods, but if the gov got all the money from the sale, we would have just abandonded it. We have a pot of savings tucked away in case we need care. We need it as the caring gov have scrapped the proposed cap on care costs. However, if we are lucky enough to drop dead without needing care, the leftover will go to help our family, or a charity of our choice. If there was 100% IHT we would do our best to ensure there was nowt left when we died. And I don't think we would be alone.

House price ces went up massively when it changed from being 20% deposit, only one salary counts, and only 4x salary lent to up to 100% mortgages, and up to 8x (I think for a while you could get 10x) on 2 salaries.

So a family with one wage of 30k could borrow up to £120 for a house, if they had a deposit of around £25-£30k, so looking for a house of around £150k.
Now a family looking for the same size home with 2 salaries of £30k could borrow nearly £500k and no deposit.

How do you suggest the government brings house prices down?
I hereby decree that anyone who sells a house for more than £200 is a rotter and a bounder?

For the country as a whole I think more people would gain if there was a serious crash and house prices halved, but it would be catastrophic for some people. And it wouldn't happen in isolation so other parts of the economy would be effected.
15% interest rates like in the 80s might bring the house prices down, but equally well would stop people from buying

But I’ve already paid tax on the money used to pay my mortgage (bearing interest) to buy my home.

if the government decide to start taxing that at 100% I’ll sell up and travel the world (spending it in other economies which isn’t going to help a jot).

plus, as someone else said upthread, the very wealthy would just then shelter their entire wealth as they have the money to pay advisors to find loopholes etc - it’ll be the aspiring middle hit once again whilst the wealthy are unscathed and the benefit claimers have more poured into their pot.

This gets raised quite a lot about elderly single people particularly, occupying large homes. Although I know you say that you're not raising the rights and.wrongs of this. The thing is there's no shortage of bigger homes. The homes needed are affordable housing associations homes, council homes, private rentals. Its the people who can't afford to get on the property ladder, who don't work, who can't get mortgages. Freeing up the big four bed house lived in by an elderly widow won't help these people. The houses will just get put up for sale and go to someone who can afford to buy but and wont have housing problems anyway. I appreciate different if someone is single living in council or HA properties.

All the new homes being built in new developments could be bought by the council and rented out at social rent prices (not the new 'affordable' rent prices that really aren't!)

This would help house those working in lower paid fields and re-establish communities which was what council housing intended in the beginning. Family homes so the local community could be stable and flourish at rents even lowest earners could afford. There would be no right to buy on the properties. It would give families time to work up the salary ladder and buy in time. It would take the desperation to buy away so that house prices would likely reduce naturally as people would start having housing options again. At the moment it's stupidly expensive rent and having to save £100k deposit. Neither of which are viable for many people, hence the mega long council house waiting lists.

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.

What office worker was earning over £17K in the 80s ?
I started as a graduate teacher in 1988 and earned less than £9K.

If you are going to start a thread about multiples of salaries, do at least start with realistic figures.

This. Unless these houses are sold at half their market value, selling them won’t help.

Perhaps we could add VAT to house prices?!

So you want the government to downgrade my house value by 80% and me to agree to sell it to something for this reduced?

Yeah keep dreaming

People saying we need to be building lots of social housing, won't this create a massive 2 tier society between home owners & social tenants.

I'd far rather build loads of homes to create an over supply, so housing gets cheaper, so those who previously relied on social housing could afford to buy their homes. Appreciate it's complex to achieve that, but aspirationally having loads of people in social housing is a bad thing, no?

The aspiration should be that people can afford their own home.

We are all very shortsighted to see the housing market as dominated by those able to get a mortgage, including buy to let mortgages. The housing 'market' involves the rental sector.

Buy to let has encouraged new landlords to set rent that pays their mortgage and provides profit. This profit is not ploughed back. This has increased 'market rent' so that all private rents are now equivalent to mortgage level. Even where the property is poorly maintained and the landlord won't repair, have fixed term contracts and can issue section 21 notices. Get rid of new buy to let mortgages, get rid of section 21 make it financially unattractive to keep buy to let and HA to pay a fair price for the property with existing tenants and increase affordable, secure renting.

Benefit costs will reduce as HB will not be inflated by the private sector who do nothing for the tenants

If you want to avoid profiteering by the private sector, provide affordable housing and maybe increase those wanting to buy privately this is an obvious route.

Providing a viable alternative increases choice and therefore cools the housing buying market.

There may be some people who then decide not to become lawyers or surgeons if other people are not seen to suffer but given empathy is a requirement for the post, maybe they are not a great loss and they are maybe best suited to other roles if their over riding concern is wealth. I very much doubt they will become benefits recipients themselves because there is no point in having a rewarding career which gives them purpose, meaning, respect, financial reward etc. I also don't believe they will abandon all this and piss it up the wall because they are miffed. This is just something parents say about how their children will flounce or they will flounce. It's an empty threat. And really it doesn't matter if you do. Most won't.