To think house prices need to go down

[Persephonia1966]

I was thinking about this having very recently got on the property ladder (with a massive mortgage). It took years of renting even to save the deposit and I'm in a reasonably well paid job. If I had been alive in 1980 I would have bought a much nicer house much sooner....

It kind of feels like house prices need to go down to a sane level or at least stop growing if younger people than me are ever going to be able to afford them without acruing massive debt. But if house prices did fall I think that would be seen as a bad thing? It would probably put me in negative equity of it happened now TBH but also, part of me feels this can't go on.
So I don't know what needs to happen. Politicians talk about "making housing available" or even affordable, but they don't specifically say making them cheaper. Just building more/reducing demand by restricting immigration etc. But I bet if that actually led to house prices going down it would not be welcomed by the pressure etc.

YANBU = house prices need to go down
YABU = house prices must not go down

I think there can be a balance, where house prices stay relatively stagnant, going down or up very slightly, tjen wait for affordability to catch up. Although some people go on about it I can’t actually see a massive price crash. People have been affording houses, there’s been a housing shortage not the other way round, so all it would really need would be stagnant or a slight drop.

Voted Yabu purely because of

reducing demand by restricting immigration etc

Because it really isn’t the driver, imo.

It’s because of cheap money which has historically been largely available to UK buyers, and also due to the leverage those who have access to money via family (grown by said cheap money and property inflation) have which some have but most do not.

A lot of wealth is tied up in property that has already been paid off. Boomers if I’m not beating around the bush, passing on funds to family.

Couple this with overseas buyers buying up property as an investment gain (historically returns have been very good, less so maybe now) to let out or even sit dormant while the asset increases…

And a contested/nimby attitude to house building and planning in this country. Oh, and there aren’t really the builders that can build houses anymore due to out lack of training and Brexit because we told all the builders that could actually build to fuck off out of our country

Thats my pound shop Gary’s economics version of it.

They are too expensive compared to income, but if they fell enough for a proper correction then a lot of people would be in negative equity and it would all be a disaster. I think we need a massive increase in supply so that they stay at current prices but growth so we earn more and it takes up less and less of our income until it's more reasonable overall.

I don't think all the Chinese flats in London are there to grow, although that's nice, plenty are there as an escape route from a regime that could go even more rogue.

We need more houses

They are generally static at the moment.

I don’t want prices to plummet because that would likely mean a severe recession, which would mean we’re all in trouble.

Mortgage affordability should be on the same basis as rental affordability, with more 100% mortgages.

But house prices will always go up generally, due to inflation.

I agree it isn't the driver really! You don't even need to live in this country to own a house. And it is possible for one person to own five houses or more (I name no names). However, that is the response put forward to "the housing crisis" by parties like Reform. But they never actually say "and this will lower house prices". Presumably because they dont want to alienate their voters who want prices to keep rising. But it's implied. And even Labour who talk about building homes etc would presumably be in political trouble if they (unlikely) actually managed to get enough homes built that house prices fell. So people are making vague allusions to increasing supply and cutting demand which would normally suggest they want prices to fall. Without actually saying that.

But house prices have gone up far far above inflation over the last few decades. If house prices had tracked inflation then it would be as easy to buy a house now as it was for my parents generation and it definitely isn't!

It doesn't always work like that though as many people renting get their share, or some of it covered by universal credit (including me despite working full time)