Why have people tolerated the housing catastrophe of the last 30 years

[nomemono]

I know it has been good for those geared up or alt the top of the ladder in the mid 90s, and to a declining degree, most years since then, but really, how has this been allowed to happen. Just as one illustration, houses in the frankly crime ridden North London estate I grew up now cost 4 times their real, inflation adjusted, 1997 price. £420,000 to live in one of the worst areas of London, in an old, poorly insulated house. Oxford, affordable when I was a student, now almost worse than London. Cambridge, Brighton, anywhere well linked and with good transport links or local jobs, the same. People casually posting on this website about having £900k to spend on a house. Single people shafted, ditto those without inheritances. How has it come to this?

It’ll fall when the population falls. See, Japan.

Why have people tolerated the housing catastrophe of the last 30 years?

What alternative did we have? Emigrate or live in a tent? I don’t know anyone who thinks the horrific price inflation was a good thing. But no government has tackled it. I tolerate it in the same sense that I ‘tolerate’ infectious diseases. I’d take action if I could, but what? Nothing I can do about it.

So, the public democratically made a decision, the market has acted naturally and we are now reaping what we’ve sown?

I know a few people in their 20s who have bought their first property but the difference is the term is 40+ years rather than 25 which was the norm when I got on the property ladder.

It's has suited successive governments because it has in part funded the economy.

For example. We bought our house in 2011 for £402k. In 2014 we wanted to do an extension and work on it so we remortgaged and took the money out to fund the extension. That circa £100k went into the economy.

How many other people have done that and ploughed billions into the economy.

The big issue I think though is when lenders took two incomes into account and for a while very cheap interest only mortgages.

Oh and buy to let investments being funded through housing benefit is an absolute scandal

But it cannot help that they has been huge migration into the country with a limited housing stock.

YANBU about ridiculous house price inflation. I voted YABU because of the thread title. How has there ever been any other choice but to tolerate it? What was I supposed to do, reject society and bring up my children in a tree?

I'm really not sure what you are on about? I was born in 79 so right on the gen x /millennial cusp. I've never had a tax credit and worked hard as a teacher since leaving university. I was incredibly lucky to be the final cohort who got support with uni fees if they were from a low income household and will be forever grateful....but also feel as a public sector worker for 24 years I have more than repaid that debt. We have brought and sold and are now on our 4th house. Each house we have had to spend a fortune on with roofing, boilers, etc as well as decorative items and every time we've never been able to afford what we really want so its been compromise after compromise until 20 years lated we finally have the family home we wanted. We now have a mortgage bigger than we've ever had having purchased a house from some boomers who sold it for 6x what they paid for it....despite making so much money they had it on the market for over a year at an over inflated price, refusing to drop it.....eventually the estate agent helped them to understand that no one could afford such a ridiculous mortgage and they reluctantly knocked 50k off....which I suppose means they might have to go on cheaper cruises during their long extended retirement which I will never have.

Humans have a right to shelter. We’re not allowed to build our own so have to rely on the state to provide it. It’s impossible for many because wages havent risen and the state doesn’t seem to be concerned that people are struggling with this.
We really should not be tolerating this.

I am very lucky we live up north so housing is cheaper than down south. We brought a starter house at 24, joint income and both sensible with money. Over paid the mortgage and moved to a larger home 6 years later. The larger house we moved into has gone up 50-70k in 5 years which is crazy.

Guess my point is if we were moving up the ladder it would be a lot harder, meaning there’s less starter homes which inflates those prices.

The people who inherit their houses.

I don't understand this. Are you blaming older people for house prices? Which way do you think they are voting? Under which party do you think house prices have increased more?

Older people are more likely to vote Tory than the general population. House prices grow more under labour than the Tories.

I agree it's an absolute catastrophe and has hugely impacted on the wellbeing of the younger generation, and on the finances of local authorities.

In 1970 30% of the population lived in council houses. That figure is now just 16%.

Thatcher was evil - right to buy has ruined the lives of generations of working class people by allowing the sale (and blocking the replacement) of our social housing stock, something that was purely done for ideological reasons.

It's has suited successive governments because it has in part funded the economy.

This

Having RTFT I'm surprised nobody has mentioned the decade of quantitive easing (printy, printy).

Like the whole Cash For Gold rubbish people believed their old bracelets and earrings were suddenly more valuable, the reality is the money was worth less.

Immigration is of course an issue. As is 35 or 40 year mortgage terms available from some lenders.

But fundamentally we are not building enough. The ones we are building are over priced.

I have no issues with a home owner pushing for the most amount they can get for their house. But ultimately somebody is buying the house too, feeding into the cycle.

I know a couple who bought in a little new build estate at the top of the market. They paid a record price for that estate at the time. I thought that was madness. But within a few years there's folk paying £100k more than they did (on a £300k house).

It's a sheeple economy.

Emigrate or live in a tent?

more young people are emigrating

We need to ban non doms from buying houses and prevent people owning holiday homes - it would free up a huge amount of stock but it would also drastically lower house prices for those of us who own our house so the government would never do it 🤷‍♀️.

But the immigrants will also age eventually so it won't make any difference

The aging population is a demographic blip. It'll be gone in 2 or 3 generations and things will even out -it's just unfortunate if you're one of the ones caught up in it now.

Since when did governments plan long term? If doesn't matter that it's a blip they still need to deal with the issue for 3 generations or do you think we will just give up on capitalism? 😆

This is why I live in rural Somerset. I can afford to buy a 3 bedroom house for the price of a bedsit in London. I work in the NHS so I can live anywhere there is a hospital.
My DS was determined to own a home so he bought a large three bed house in the Welsh valleys for £150,000 this year. He works remotely so it doesn't matter where he lives.
Not everyone wants to live where he does but the countryside is beautiful and he is on the edge of a national park and he's sick yo death of renting a dingy studio flat in Surrey for £1000 a month.

I've often thought compared to other cultures like France or even Iceland who rose up over the economy etc, we British are quite an ambivalent nation, almost like being let down by the politics and economy of this country is a given and built in to our shared social psyche.

Toleration and a big feeling of lack of the ability to actually do anything about it combines to make acceptance endemic unfortuantely. Not sure what could be done, except strict laws about second home ownership, changing rental landscape to a more European model so renters are safer and have rights, and again strict laws on how much a house can go up in a location but it's more complex than that.

My friend paid 80k more than asking for a house in an average street as she was desperate to have a roof over her head asap as going through a separation and had sold her house for lots more than purchased. Doing that then has falsely pushed up the other houses in the street so now that perfectly average street has become unaffordable for most when before it was just about manageable (Surrey/London border town). Same with where I'm from in NE, in covid people sold up in London and paid over the odds for houses in a gentrified seaside town and now it's not affordable for most local northerners 4 years later. Lots of little stories like this can change the landscape too as well as the usual economic reasons.

I fall into that category and that's nonsense. I need/want to move and can't afford to either.

I've never been a fan of right to buy as being obvious to a blind man on a galloping horse that the whole policy of taking housing out of the social marketing and not having a house building plan was never to end well.

That was more political than anything else.

It’s not a catastrophe, it’s simple economics, supply and demand. If lots of people want to live in place a prices rise. London is the obvious example because people in the last 15 years or so have desired to live centrally and that means lots of people for the limited square miles available for housing. Unless you artificially control prices it will always be expensive where more people want to live than housing exists. The flip side is only 90 minutes from me (typical 3 bed is £500k) there’s houses for £50k because nobody wants to live there (old mining cottages, run down villages that don’t even have a shop now, lots of shuttered buildings) however there is no public transport to there and the journey by car is fiddly and in rush hour much slower!

people choose the rat race, people choose to flock in desirable places (I still don’t get why anyone wants to live in London zones 1-3, they were run down when I was a kid), this drives up prices in those places whereas other places lacking employment and opportunities are still much cheaper, in the case of the NE for instance, super cheap - there’s a few pioneers heading there now who work from home but still houses where my friends live can be bought for £50k in ok condition (nothing structural wrong, just needs decoration) £100k gets you a really nice house

I bought first property in 1992. The maximum that could be borrowed was 3x1 salary plus 1 the other. I was earning 11k at the time and my partner 10 k.

So the max we could've borrowed was £43k. In reality though took out a 33k mortgage rather than overstretch Had a 7.5% deposit

Not too long after we people were being offered 100% mortgages and 5x. Salary multiple mortgage.

Led to a steep rise I prices. I see now some mortgage providers are offering 6 x salary mortgages

Because we tax income too much and assets too little. Because we have an ageing population who have a vested interest in this situation continuing. Because any attempt to fix this situation is electoral suicide

It was not only tolerated, it was celebrated. As single gen x-er in London I managed my first time buy by the skin of my teeth (220k) but the mood among those who had bought ahead of the wave was that they were earning money through having done something prudent (ie, were able to buy in the window it was clear property was going to go up).

For a long time after the first boom there was an assumption there would be a correction before long. I knew someone who even sold their London house in 2003 as the economist was predicting a massive crash and he wanted to get ahead of it - bad choice there. But it just didn’t happen.

What people didn’t fully appreciate ahead of the financial crisis was how the mortgage market had got out of control. Responsible lending had been a check and balance to the market. When they were giving money to anyone with a pulse who could write their own name, they didn’t advertise how lax they were and there was still a sense that if the lender had lent you the money, it had to be a good decision. Because until recently that had been the case.

I do remember a mad moment when Kirstie Allsopp got cross with an economist who was saying the housing market was unsustainable, saying “does he not own a house?” Everyone’s was addicted to Location Location Location. They could see obviously people were priced out but at first it was shielded by the bank of mum and dad and rock bottom interest rates.