To think housing as investment is driving prices beyond salaries?

[MyKhakiFish]

It feels like as long as housing is treated primarily as an investment - including by non-resident owners, it puts upward pressure on both rents and house prices. In some areas, especially those with higher earners, it seems like housing costs have risen much faster than salaries can realistically keep up with. Because of that, I’m not convinced that small lifestyle changes (like cutting back on takeaways etc.) really make much difference for people facing the highest housing costs.

AIBU?

When we lived in London, I was sick to death of people telling us to “cut back” or get financial advice when we used to bitch about renting.

We could have all existed on air and we would never have been able to get a mortgage for 700k for a house.

We ended up moving to an area 6 years ago where we bought a 3 bed house for 170k. But now, even this area, a 3 bed house will set you back 250-350k. It’s an area of high deprivation, rightmove tells me that
my house sold for 40k in 2009, I can’t believe prices have risen so dramatically here.

Yanbu - which party will be brave enough to cull buy to let properties to help out live in owners though 🤷‍♀️🤷‍♀️

I see the argument for buy to let though.

I rented for years and years. It was all buy to let properties. Sometimes the landlords decided to sell and it was hard to find another rental.

Who else would I have rented from? I was in London and our household income was 45k. No hope of buying anywhere and some sort of catastrophic event would have had to have happened to bring house prices down enough for us to afford anything.

I think that there are enough btl properties now though

Its time to ban the sale of new ones for a few years to help the market house first time buyers

It'll be interesting to see what happens. There seem to be landlords selling up in reaction to the laws & rules moving against them in recent years. But I'm not sure if the homes they are selling are becoming any more accessible to FTBs or if they are just being bought up by more "career" landlords.

Yes but not directly.

House prices are increasing because supply of housing has fallen short of demand for housing for years.

Increased demand has come from a few places -
1, population increases from immigration (previously births)
2, people living longer
3, people living in smaller family units

But supply hasn't increased.

That is where your investment aspect comes in. There is no political motivation to build more houses because the dirty "secret" is that most people with a house would rather keep their asset rising than see their asset lower to make sure others have houses.

If we built more houses, price rises slow, and then prices eventually fall.. do you think home owners vote for that? Or politicians who own multiple homes want to do it? Or those with wealth and influence? Nope. They all "want" to build more.. but deep down, they all want to keep the value of their house or property portfolio rising more...

I think there’s a place for buy to let, but it really seemed to affect house prices when buy to let mortgages came in and MIRAS was abolished. I do think there ought to be more controls (and / or more social housing for a range of circumstances). Long-term private rental doesn’t seem to be in anyone’s interests other than landlords, really.

There also needs to be more building of decent smaller homes as people are living in smaller family units. Not necessarily houses, but perhaps nicer flats that don’t feel like starter homes - proper outdoor space and decent kitchen space would be a good start.

Also parents gifting young couples deposits. I totally understand why they do it but I think this also keeps prices high. If the properties were not selling the prices would come down.

Yabu not to have posted this 20 years ago. Its a bit late now

That’s certainly happening in the borough of London I used to live in.

Theres hardly anything on the rental market now, and what there is, the prices are extortionate. The last house we rented in 2019, we were playing 2k a month for (a damp, tiny, 3 bed terrace). I saw it on Rightmove last month and it’s now up for 3.2k a month, in line with the rest of the area, and the photos show it as a fucking hovel now as the landlord let it to students after we left.

God knows what we would have done if we hadn’t moved out to the midlands, we wouldn’t have been able to afford that.

House prices are still astronomical there as well. Unless they have very wealthy parents helping them out, or they are in their 30s on very good wages, I can’t see how first time buyers are buying there.

I also think the service charges on flats need to be more tightly regulated. Some are ridiculous.

Where does the social housing appear from through? If you could get on a list in the area I lived, it was over a decade long.

Yes, it’s the same here. But there is also a lot of building work going on, so there is the capacity to build; it’s all just (overpriced) private housing. So perhaps stop new builds in expensive COL areas unless it’s social housing? And really living in a dream world here, but some kind of public sector construction company building them.

House prices are dropping round here. Houses that were selling for £600K in 2022 are now on the market for less than £500K.