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?

Capitalism, innit?

Housing has become an 'asset', so it's gone up in value, more and more money is in the hands of fewer and fewer people so they buy more of the assets, which get more expensive and then the only way to live somewhere is to overpay to rent them from the ever smaller pool of ultra rich organisations or individuals who can afford them. 😕

I hate the way developers get away with not building the 'affordable' homes they use to get planning permission through but never build.

Example. Developer got permission for a small estate of 25 houses in our village. 10 of which were supposed to be affordable starter homes. I said at the time it would never happen. Guess what. Now building has started they have said that due to increasing costs there will be no starter homes and they are now going to squeeze an extra 5 houses in. It should not be allowed.

also around here there are so many houses going up that people wanting to sell are not getting any viewings. My neighbours estate agent said people are waiting for new builds. The lovely four bed house with fantastic views has had three viewings in 9 months. The price has been dropped by £80k. Still nothing. She is desperate to downsize after being widowed. There are currently 10 very nice properties for sale in the village. All are saying there is no interest. All have dropped from the initial valuations so prices are definitely falling round here.

We haven't build enough housing private or council for decades - and we knew that. The poltical consensus prior to 80s governements couldn;t rely on private sector and had to build houses - that change and we've ended up in a place we were before.

Another view I've seen is with Gary econimic on youtube - he's focuses on the flow of money which has been away from middle and working class and even government to small rich elite last few decades. He explains people earning passive income at 5% are growing their money faster than economices are growing so they buy up assets - and one of those is housing. He thinsk it won't change till most of the population start to demand change from our governments.

The cheaper areas we first bought in have rising prices - and cost of commutes have risen - they are less and less an option - longer mortages might help for a bit.

UN just did a report looking at why fertilty has fallen round the globe- and found many couples wanted more kids than they had and a huge barrier for many was cost. For every 10% house prices go up fetility drops 1%.

I think people tolerate it because they don't really see the big picture - they complain and new builds but then about high prices.

What appals me is the social damage decades of this has caused. People unhappily staying at home in bad or lonely situations due to having no option but to live at home. People with mental health problems because they're forced to do higher paid jobs they hate for years on end just to have basic housing. People not having the family situation they want. Working class single people watching the middle class double income, double inheritancers getting exactly what they want. How selfish it has made people. The sheer destruction of joy in life. I seriously wonder what will happen if and when a current generation of locked out say 30 somethings reaches retirement age; many will have no proper pension and still be renting. So they get to the point where they can't carry on working and cannot pay their rent. Perhaps the various flavours of neoliberal idiots people continue voting in will be hoping the stress of a miserable life will give them fatal heart attacks just after their last wage is paid. No NHS, no social housing, no social care costs, just carry on with your Phil and Kirsty's and your "what can I get in Bromley for £800k" posts

They saved for over a year out of uni because they both lived at home and paid £200 per month board and saved hard.

So many don't realise that a lot of young people can't live at home & pay cheap board for a number of reasons

House prices have gone up but not in the way you describe. 3 bed terraced house sold in 2003 for £82k, sold in 2024 for £215k. Different house, sold in 2001 for £51k, sold in 2021 for £160k. That was just sampling one street in my town.

@p1nkp0ny two people working FT on NMW (eg warehouse work) would have a gross household income of £50k. Their net income would be £41k. Mortgage on £175k house with 10% deposit will be £10k.

For context, there are a number of recently renovated 3 bed terraced houses at that price.

It won't be everyone's idea of a 'forever home' but for lots of people it is just that.

Downside is that this is Northamptonshire. The home of poor health & education services, dodgy chief constables etc!

It’s a totally different situation to 30 years ago as there are far more foreign buyers now. Houses and flats which have recently sold near me( 2 areas I know well in London) have all gone to well paid people who arrived 5 or 6 years ago or just arrived. I don’t think affordability was even an issue for some.It’s just somewhere they are advised to park money.

International finance is also into build to rent which means property is being built as a long term investment for huge pension funds who need income and companies like Blackstone who see huge profits in renting out property.

What could happen of course is if sentiment and conditions change. Then foreign buyers could be more motivated to move as exchange rates are less favourable to them. So drops in prices could be more dramatic than in earlier times in places like London.

IMO it’s at least partly down to Brown, under Labour, encouraging buy to let by allowing tax relief on BTL mortgages, while scrapping it for owner occupiers. His raid on pension funds in the same era encouraged people to think that ‘bricks and mortar’ were a safer investment, and so the whole sector mushroomed.

IMO it was also reasoned by Labour at the time, that a proliferation of private landlords would absolve them from having to do much - if anything - about provision of social housing. Though of course (to be entirely fair) private rents at the time had not yet soared into the stratosphere.

Plus, while endlessly complaining about Thatcher’s ‘Right to Buy’, while having 13 years in which to repeal that law, for some reason best known to themselves, Labour didn’t. Could that possibly be because they thought it would lose them votes?

Another factor IMO (under the Tories too) has been the apparently perfectly legal marketing of entire, or almost entire, blocks of new flats to relatively wealthy SE Asian buyers, who in general would be able and willing to pay more than your average first time U.K. buyer wanting a 2 bed flat.

IMO it’s high time we took a leaf out of Denmark’s book, and banned any foreigner from buying property unless they’ve actually been resident for 5 years. Dh was told by a Dane, that this was to prevent Germans from buying up masses of property (especially on their extensive coastline) but obviously they couldn’t contravene EU law by saying no Germans, so they said no foreigners, instead.

@GnomeDePlume

But surely that additional information only highlights further the extent of the crisis?

Two people working full time in a place you describe as riddled with poor health and education services (and, if my understanding is correct, far from brilliant public transport) would have to somehow magic up a £17.5k deposit and then borrow over three times their joint income, to buy terraced house which you've made sound not very desirable. They'd be paying upwards of £900 a month in repayments, which is nearly a third of their take home pay.

Whether you think that's fair or not, it's undeniable that it represents a situation significantly worse than the situation in the past, which is significantly worsening. Perhaps in a decade two full time workers will have to borrow 4.5 times their income to buy a one bed flat in an area like you describe - how much worse does it need to get before it is legitimately seen as a crisis?

Other than vote (and really that doesnt make a great deal of difference when it comes to house prices), what do you expect ordinary people to do about it? I don’t think people pay ridiculous amounts for their house out of choice, there’s just no other option.

@GETTINGLIKEMYMOTHER whilst I am a centre left voter , I do agree with some of what you say and think some decisions were made for political ends- just as Thatchers covert were rather keen on gerrymandering and forever changing boundaries, Blair and Brown who I think were good in other ways were too concerned about losing working class votes by suddenly getting rid of right to buy etc and other things they could have changed- buying back previously publicly owned entities is complicated and takes hard cash and contracts expiring etc - but getting rid of buy to key was pure policy without heavy cash implications-
i think they were far too timid in some areas to be honest .

i think the problem with the way things are in this country is that you try to end up fudging and pleasing everyone and end up pleasing no one- which is why I am against the FPTP system - and rather more for collaborative government - yes you don’t tend to end up with anything very radical but it’s rare you end up with disastrous policies that are hard to reverse .

I’m 71 and see no benefit in house price inflation. To think it’s a good thing is a very short term view. I cringe when I hear about what the latest house sold near me has gone for.

My kids have had to work longer and harder to secure a home. I hate seeing young families in private rented, with no long term security.

I want to see a lot more house building.

At my death my very ordinary home will attract IHT, so less inheritance for my kids.

On reflection, when younger I should have found a job in a cheaper area, moved there, become mortgage free much sooner and enjoyed spending the difference.

Most importantly, I could have been leaving a house exactly the same as the one I have now, but know my whole estate will go to my family as below IHT threshold.

Another factor IMO (under the Tories too) has been the apparently perfectly legal marketing of entire, or almost entire, blocks of new flats to relatively wealthy SE Asian buyers, who in general would be able and willing to pay more than your average first time U.K. buyer wanting a 2 bed flat

A friend of mine was living in Malaysia and said there were constant property fairs flogging entire developments in the UK. One was fronted by Boris Johnson. Absolutely scandalous.

Thank you. I will never own my own house unless I magically win the lottery. It's completely unreachable for a lot of people

A significant part of the problem is the combination of the dreadful FPTP electoral system and a good portion of the electorate themselves. A good % of the electorate, spread across the 650 or so seats, are deeply conservative, may perceive benefit from insane housing costs, and believe the drivel of the Daily Mail etc. Labour are so so scared of these voters (and to lesser extent of non voters) that they dare not do anything properly radical to the extent required. Then you ha e the media creating cosy expressions like "the bank of Mum & Dad" instead of "the inability to buy property without wealthy, donatikn inclined parents". I also despise how this has infantilised a generation. But people voted for the disasters since 1979. They chose this. They weren't forced at gunpoint to vote for idiots from Thatcher to Starmer. Where were the millions taking to the streets when there was already a housing crisis by say early 2000s? Where were the mass emails to MPs in marginal constituencies demanding action? Instead it was just generations anaesthetised with Sky Sports, alcohol & a fortnight in Majorca then don't rock the boat, just carry on uncritically worshipping Thatcher, the Royal Family, slagging off foreigners and letting this catastrophe unfold

Minimum wage is the same through the whole country

"letting this catastrophe unfold"

But what do you suggest we do? Stop banks lending high multiples?

Net migration is already being cut from the high of 860,000 in 2023.

Did we build enough homes for 860,000 more people? I don't think that's even possible tbh (looks like we completed about 150,000 new homes in 2023).

I suppose we could try and incentivise builders not to land bank, or to punish them for slowing down building starts.

Well people have limited options to protest house prices:

• Vote for a party with sensible policies that are aimed to reduce house prices. This would mena significant investment in social housing, reducing planning restrictions, etc.. to increases dramatically the numbers of houses being built. My DP thought labour would do this.... seems not and now he has to wait 4 years to vote for someone else.
• Lobby MPs / local counsellors on this issue. Done en mass it would turn the political tide evenutally but as a single voice you are not heard.
• Take to the streets and protest - as above, only any good if everyone joins you.
• Refuse to buy a house that is "over priced". This is fun and leads to you renting which is arguably worse for your pocket than buying!

Have I missed anything?

I also despise how this has infantilised a generation.

I agree. You often hear people saying "multi-generational households are not a bad thing" but that's not what this is. Multi-generational households work when you have e.g. an older family member living with adult children. It doesn't work when you have young adults effectively still living like teenagers with no ability to start families of their own.

Thankfully I never had to live with my parents as an adult as I would have gone stir crazy.

Live in a van or on a boat? Opt out completely?

Not everyone is on minimum wage.
Minimum wage is higher in parts of London is it not?

My parents bought a 4 bedroom house in a (now) desirable part of South London for £60,000 on a combined salary of £30,000 in 1991. The house is now worth well over £600k+ and they're very much mortgage free, which I'm very happy for them about as they won't have to worry about rent/mortgage payments after retirement (they're due to retire in the next year or two).

I bought a 1 bedroom shared ownership flat in 2021 in a commuter town for £265,000 on a salary of £36,000. I 'own' 70% but have a 31 years left on the mortgage. My mortgage is due for renewal next year and with the increasing rates + the rent portion increasing annually, I don't even know how I'm going to afford to cover all of my bills. Rent here is expensive too, we're in zone 6 but one-bed flats rent for £1,400+ a month (well over half my salary after taxes).

I live month to month with no savings, and honestly can't remember the last time I had any money left over for socialising/anything nice!

I don't know why I wrote this all out. I just seriously fear things will only get worse.

Major changes are going through parliament right now.

(but all they’ll do is increase rents…)

Hmm. We bought our house 16 years ago, NW coastal town, £525,000. We were 45 and 51 at the time. Under offer atm for £580.

We've spent over £100,000 on extensions and upgrades so effectively losing money.

We’re very happy, though. We’re able to downsize, which we desperately need to do for medical reasons, and split the remainder after mortgage balance paid off with the adult kids which will help them greatly.

I do feel so sorry for youngsters who don’t have that sort of familial support, though. How on earth do they stand a chance?

I started life in two rooms in a basement and then a 2 bed, grotty council house in Brixton but it had an indoor bathroom so we ignored the mould. At least council housing was available then.

That house has recently gone on the market at just shy of £500,000. Couldn’t believe it when I looked into London prices, after being told I was out of touch on another thread.

Indeed I was!

Perhaps read

Inheritocracy: It's Time to Talk About the Bank of Mum and Dad

Very topical and depressing 😬