Why do house price keep rising

[numenor]

There is a lot if discussion about how expensive property is and it keeps rising but people can’t afford.

why then do prices not drop?

I bought my own home as a single person. OK, it was a one bedroom flat in Victorian house in what you might charitably call an “up and coming” area, but it got me on the ladder. I even made a little bit of money on it by smartening it up. I saved the deposit myself.

We bought an average 3 bed semi in London a few years ago, in our mid 30s. Both sides of the family live in London, and our jobs are here too.

We saved for years and years until we had 100k, putting lots of things aside so that we could put all our energies into saving as much money as possible. That included having children. When we were ready to buy, it was the crazy time in lockdown where houses were selling for many 10s of thousands over asking price, where agents were pitting buyers against each other in ridiculous bidding wars. We put over asking price offers in to so many houses, all rejected for higher offers. We looked out as far as Reading to the west, hemel Hempstead to the north. All pretty much the same price for a 3 bed house as in London at that time - so no real point in moving out.

Finally an offer was accepted, and we got on the ladder, and we now have a child - probably the only one. It's an ok house, a bit poky in places. But the mortgage is huge and I don't want to bite off even more for a fourth bedroom. No family help.

I gave both my adult DC deposits for their first houses several years ago. The money came from inheritance when my DH died.
The eldest just upsized to a bigger house after inheriting from their late father. My youngest recently upsized by buying with their partner. I downsized 5 years ago after my DC left home. We all live in the North West in areas where property is still a reasonable price.

They don't have to buy to have a effect on housing stock
Every divorce needs an extra house/flat even if rented
The higher rental demand, the higher the price, the more people buy to rent.

It's over half now, who get family money. And it's way more than just buying them a fridge or whatever - fifty grand, on average.

The pps workplace full of independent scrimpers buying houses is completely atypical.

They might have an inheritance or a gift/loan from the "bank of Mum and Dad."

Most people I know bought in their early 30s, but a couple of them bought in their late 20s. Again, it depends on where you are in the country and how expensive the properties are. Obviously it would be harder to get on the ladder somewhere like London, and that would drag the average age up.

From what I’ve heard, a lot of these Manchester tower block flats have nightmare problems with things like cladding and unfavourable lease terms, so it could turn out to be a pretty poor investment!

I didn’t have family help, but I bought in the north, in my early 30s, and my house was under £300k.

I also had to save a deposit while renting as no family nearby. It’s definitely doable provided that don’t live in London/SE and that you don’t earn a below average wage.

Things like Help to Buy and shared ownership have helped push prices up. As do stamp duty holidays. Where does the money come from? From people squeezing all other areas of expenditure. It’s a pitiful life when we work to pay bills and have precious little money for doing any fun things. We need to burst the housing bubble in this country to improve everyone’s standard of living but while we’re not building enough houses that’s not going to happen.

And Paul Johnson’s book Follow the Money is an excellent introduction to public finances in the UK. Easy to read too. I’d highly recommend it.

Because people are willing to pay silly / inflated prices and believe estate agents crap 💩

Personally, I think if buyers did proper research about previous sold prices and negotiated hard when buying it would start to erode the overpriced properties on the market.

There have been several posts on here with people asking why their property hasn’t sold. Mostly it’s the price especially if they made their purchase during covid times. Sellers overpaid and so it continues ……

People need to stop viewing homes as a cash machine and expect buyers to pay £100k more because of fancy wallpaper in the downstairs loo.

And you know what there is nothing wrong with passing money down.
Its how the rich stay rich!

Getting a leg up is normal in the upper class circles. Even Prince Harry wants to hold onto his inheritance from his mother to pass on to his kids.

But because of council house sales, working classes are now passing money down. Which means more people have a leg up than the 1960s

Generally demand outstrips supply and keeps prices up.
The renters right act is changing in a few weeks. So a lot of landlords are choosing to sell their homes now to avoid the new rules making it harder to manage or sell their houses. Theoretically this should bring prices down a bit. It will definitely make renting go up as less places to rent. Maybe more people will then look to buy? We will wait and see.

There is something wrong because it undercuts the theory of working for a living. It stops any form of meritocracy emerging and makes life entirely a matter of luck and nothing you can work for. The council house money being passed down is a case in point. Only those fortunate enough to have a council house at the time benefittdd, and let’s be honest, at the time in the 80s and 90s they’d long since ceased to be universal housing and were gong to people who did not work. The whole point is that those who work have been cheated and taken for mugs.

This is not new knowledge for cryin’ out loud, the Anglo Saxons villages of the post Roman era were built on the principle of fair land distribution.

at the time benefittdd, and let’s be honest, at the time in the 80s and 90s they’d long since ceased to be universal housing and were gong to people who did not work.

Really not true. However those council tenants in straitened circumstances who did buy soon ran into trouble as they didn't have the savings or income to cover any major expenses and so sold their properties, often to private landlords. They then had to use the proceeds of sale to fund their own living expenses as with a lump sum in hand they were no longer eligible for any kind of state support, and they had lost their secure housing.

The private landlords who now owned the ex council properties did very well though.

you only need a comparatively (compared to the overall cost of the property, even if in cash it's not a small amount) deposit. The average house price in the UK is £268,421, which means approx (I know not exactly) 50% of houses are under that.

FTB are going to be more likely to buy the houses at the lower end of the scale. 5% of £200,000 is £10,000. If there are two of you, that's just over 1 year of saving £4k each in a HTB ISA and you then get a free £1250 each, deposit sorted. Of course you might be buying alone, or want/need a 10% or higher deposit but if you're working full time from age 18 or 21 then saving a few K a year would get you that amount by your mid twenties or early 30s, particularly when those are also the years you'd hope you'd be progressing in your career a bit. And of course (although SE focussed 'naice area' MN posters refuse to accept that anyone would want to live in them) many properties are much cheaper again.

Obviously not everyone can afford to save due to various circumstances, and some people don't start saving until later, but it's hardly a completely impossible ask that's out of reach for everyone. And that's not even going into inheritances, bank of mum and dad, etc.

You may as well say 'Where do people find the money to rent?' People have to live somewhere, it's either rent or buy. Once you've got the deposit a mortgage can often be cheaper than per month than renting.