The UK’s default “property over everything” investment culture feels unhealthy

[ByMildEditor]

It sometimes feels like property is treated as the default way to build wealth, rather than one option among many - ahead of things like investing in businesses, the stock market or other ventures that don’t rely on extracting income from people’s housing costs. I understand the arguments about stability, tangibility and why people choose it. I also understand the “what happens to renters if landlords sell up” point. But I still find it troubling how normalised it is for housing - an essential, to be used as a primary income-generating asset, especially when the consequences for renters are so significant.

AIBU to feel that the UK’s bricks-and-mortar obsession has downsides we don’t talk about honestly enough?

Yanbu. I think we should be charging a 100% stamp duty tax on second homes or property bought by people living abroad regardless of citizenship. Housing is an essential and so buying housing as part of a portfolio rather than to live in it should be heavily discouraged.

I honestly don't think there is any other way to make money than to invest in property. If you had enough money to invest in stocks/shares then that could create profit but it's not a given.
Housing is always going to be a high asset. No brainer.

YABU I think most people understand that those days are gone now and property prices are and have been for the past 20 years much more stable and much less likely to rocket in price.

I agree with the pp regarding people buying from abroad. However, if a UK based landlord buys a property, it's put on the rental market, most likely done up before hand. They don't get a discount so they aren't depriving anyone else of buying it. Sellers don't discriminate, they just sell to the highest bidder.

Property will make you money. A lot of people pay more in rent than people pay for a mortgage. Five years in a rental, you have nothing to show. The same with a mortgage and you've likely got £5K profit, if not more, depending on the market.

Give me a nice 10% on a regular savings account and I'd not have money in property.

I moved to property when interest on my savings went below 8%.

How will property make money in the future when the population is dropping like a stone? We’ll need far far fewer houses.

Their presence increases competition amongst buyers and drives up prices. So yes landlords massing portfolios of multiple properties are depriving primary home house buyers of houses at more reasonable prices.

Developers of new housing are also making huge profits. Affordable housing really isn’t affordable for some of the tiny houses for sale and then they add service charges on top of the purchase price.

I think there is also, for some people, a comfort in investing in something they can see and touch, and is directly under their control, in a way that stocks and shares aren't.

And for some it is the case that they more easily understand property as an asset class, especially if they already own their own home, but the stock market may be a more mysterious beast. Don't invest in something you don't understand.

Where did you get that from? The population is growing.

I think it's levelling off a bit. There seems to be increasing awareness that a lot of gains from the 2010s weren't that in real terms, even for those who are able to sell their properties.

Surely the majority of people buy property not as an investment but because they want to own their own home and the security that brings?

How about 20% increases year on year in a managed fund, including over Covid? I wish I had never bought a flat in the 2000s and just stuck to sticking it in funds.

Only through immigration, and we have no idea where that is going. Pretty much every other European state, populations are shrinking.

They have built thousands of houses near me, and can't sell them. Affordable or otherwise. And still they keep putting in planning, and still the labour government wants more.

Love this idea. Is anyone suggesting this or have you just come up with it?

Many people do expect it to increase in value though & for a long time it did, outpacing earnings.

But are you factoring in that the tenant who would be renting there is now going to eithercbe homeless or else also bidding to buy? So either you have an increase in homeless people or you have the same number of people competing to buy?

I wish I’d started investing in a stocks and shares ISA years ago but was totally ignorant about how much it could bring in over a long time period. Although I also saw a relative really badly burned in the 2008 economic crash.

I don't have the current figures to hand, but last time I checked there was something like £23 'invested' in property for every £1 invested in the productive economy.

If you're wondering why your salary has flatlined for twenty years, a large part the answer is in there somewhere.

High housing costs are not productive

Definitely not! And because we insist on keeping them that way, we price out people from living in the areas where statistically they'd be the most economically productive.

House building is expensive and the profit takes longer to realise, the time from land purchase to build is long. Large housebuilders typically make 15-20% profit, given the risk and time not huge. Most people don’t seem to understand this with their ‘just build more houses’.

Getting 20% return on investments is outstanding and not within the normal return. An adviser will typically quote 6% is you are medium risk and it’s all about risk. I think housing growth has slowed and will stall, I think at the bottom end people are maxed out. Following renters right bill, renting is now very risky and tax laws have taken away advantages.

Having your own property is security. At the end of day I have somewhere safe that I can’t be kicked out of. A property will always have value, stocks and shares can crash and depending on your age, leave you in a difficult position.

And people wonder why we have low productivity 😆

Only through immigration Yes, and that creates more need for housing.