The ridiculous, ridiculous price of property

[Snakesandpropertyladders]

This is really just a rant/moan/ whinge about how ridiculous house prices have got.
We are looking for a standard 3 bedroom house where the 3rd bedroom is actually a box room that would only just about fit a single bed. So nothing fancy. We have a pretty good budget but it is just not going to be nearly enough as house prices have risen so much recently.
We viewed 2 houses today. Both had pretty small rooms and needed quite a bit of work. The first was priced at 450k. It needed a new kitchen and complete redecoration. The second house was priced at 425k. This one was identical to the first but needed new kitchen, bathroom, complete redecoration throughout. It was a major project, though not being sold as one. If we bought the house we wouldn't be able to afford to do the work for years and years if at all. How on earth can these sorts of prices be justified!?
For that sort of money we'd expect a house that we can move into and that's it. It's a pretty high budget yet all that is coming onto the market are dilapidated houses or houses in dodgy unsafe areas. Even houses in not particularly savoury areas are edging closer to 500k.
We have even looked at moving further out from where we are, but the cost of commuting then becomes prohibitive. Both of our jobs only exist in London so we have to be within commutable distance. A 30 minute commute from Essex will cost us around £800 a month in train fares!
I'm despairing of us ever being able to leave our flat and buy a house of our own. Rents are pretty crazy too at the moment so even that isn't a great option.

SW2 - zone 2 still have 3 and 4 bed terraces for your budget. I can see on Rightmove that there are some close to some decent state primary schools too. We have close family who live in the area, having deliberately chosen to buy near outstanding state primaries. Not terribly attractive on the outside but they have decent square footage plus a large garden which is rare for London. Brixton prices have shot up but there are still 'relative' bargains to be had.

I bought a house exactly three years ago for 203k. The estate it's on is quite big and there are lots of houses of similar size/style nearby to compare it to. An identical one to mine came up for sale in the next street about 18 months ago for £230k and I thought I'd done well on mine then.

Then another one virtually the same came on earlier this year at 235k, sold really quickly, followed by two more that went up for £250k and sold really quickly, and each time I've said 'that's just ridiculous - they'll never get a buyer at that price.' but they have.

And now I see another very similar one new to the market today up for £270k. If that is a true representation of what they might get for it now then that means mine's gone up by 35% in 3 years.

It's all very well saying that there are bargains to be had, but those bargains are often ex-council or houses that would have been rented or bought by people on lower wages - bus drivers, shop workers, low wage hospital staff etc. etc. Where are those people supposed to live now? Sheffield?

House prices were out of control before the crash, but they are so much worse now.

You can't build an economy on perceived value - you have to produce things that have real value. See Spanish silver and Dutch tulips. Equally

Not sure where I was going with that equally...

We are in a similar position drink...it's insane.

Jack it all in and come and live in Gloucester. 5 bed Edwardian town house for £200k.

I know many friends and family who started on the property ladder with ex council property in the SE. DH & I did with our first house. It's what we could afford at the time - a ropey looking house in a less than affluent area but these were the days of 'Changing Rooms' (more fool us!). The deeds clearly showed that the original owner paid the local authority the princely sum of £7K and then promptly sold it for a handsome profit a few years down the line. We were the 4th set of owners. My SIL bought a 2 bed ex local authority flat in Vauxhall for her first property. I wouldn't say that either area has progressed hugely in desirability - still a bit dodgy/rough in places despite the rise in house prices!

We are not in such dire straits as some posters as we live in a 3 bed semi overall 1000sqft with 3 dc. In order to move into a 4 bed say 1200ft we have to increase our mortgage by £200k and pay £40k in stamp duty which we will gain no benefit from both dh and I are graduates working in professions and earning decent salaries but will probably never live in the 4bed detached homes that our working class parents managed to buy. I do feel angry that the state takes 1/3 of our salaries and our living standards are substantially lower than our parents. I've had no pay rises for the last 4 years but bills keep increasing . We have been balloted at work for strike action in NHS and for once most of my colleagues are prepared to join in. I feel a revolution brewing In the UK

I agree - it is insane.

House prices are prohibitive for lots of people here too - but nowhere near as bad as London/SE. In fact, you would consider it cheap up here I'm sure. This for example is in the "best" catchment areas in town.

The low wages (DH earns 1/3 of what a similar job in London would pay) OR the 2hr+ commute might put you off though!

They are indeed bonkers. I wish I could persuade DH to move and f off out of it back North.

A young professional friend of mine with a decent deposit can only afford a shared ownership place in Lewisham where she would only own 1/3rd of the property. That's not much is it. And she is in a good position.
I earn exactly now what I used to earn when we bought our flat 12 years ago for £140k - now I would have to pay £420k for it. It's completely mad.

Property prices could be brought back under control with comparatively simple tweaks to the rating system.

But it won't happen because the politicians and their funders are on the winning side.

PS the tweaks are :

Add council tax bands I to Z on the same fee and value ratios on up the scale.

Charge double council tax on all property that is not occupied by at least one person who has a UK NI number.

Charge double council tax on all properties owned by companies or those without UK NI numbers, unless there are at least the same number of NI numbers as bedrooms.

Abolish all council tax discounts on bad F or above.

Doing that would make the cost of ownership of the asset class called UK property equivalent to other asset classes and deflate the bubble that has been created by rich people from volatile countries saving their money as UK property.

It would have little or no impact on the vast, vast bulk of the population.

OP I feel your pain!

We're in South East London and it's totally mad!

It's not through a sense of entitlement, it's just plain & simple stating how bloody ridiculous prices are!

On places that need a significant amount of work sound but still cost half a million.

Ok yes you could take on a 2nd or 3rd job, but it comes to a point where it's just insane.

No real answers

The current stamp duty system makes me see red. £24k stamp duty on a £600k property which in London is often a modest 3 bed semi or terrace in zone 3. Stamp duty is just a tax which again we see no benefit from and adds years onto the mortgage. Agree all politicians regardless of their party have no interest in seeing house prices fall it keeps the plebs busy and fills their coffers. Both Boris Johnson and David Cameron don't give a stuff whether ordinary Londoners can afford houses in the capital they just want foreign money invested in London so it reinforces the city's reputation as a financial centre. I'm also mad about how a blind eye is turned as to where the foreign money comes from often ill gotten but Brits buying houses are questioned by the banks to ensure it's not laundered money

Actually Labour fucked up the housing market, the Tories just inherited it.

Maggie and Nigel released borrowing controls
hence the boom and bust of the early 90's

but yes, Broon made the most monumental fuckups on the economy
did it never occur to him that all the policy wonks on free secondment from banks and accountancy firms might have their own agenda

however Giddy Gideon has exacerbated it by loosening controls on LLPs and CFCs: through which a lot of London's dirty money flows before being laundered into bricks and mortar.

House prices are insane in Sheffield too.....

its all a wash outwards from London
and the result of lax lending controls

lending controls are now tight again - but the cash overseas buyers are still having a free for all

I agree with you OP.

We left London 7 years ago (just before the crash) and got a ridiculous amount of money for our NE 3 bed flat, enabling us to buy a 5 bed in Wales. Now have another property we rent out. There's no way we could afford to move back now. The prices are even higher than when we sold and I couldn't have imagined that.

House prices in London are definitely falling. This is anecdotal....but it's anecdotal from a couple of my friends, and me, who have flats on the market now. West London.

Four months ago, when we first put our flat on the market, we had eight offers in the first two weeks. We accepted one....but it fell through a month later. We accepted another offer that was £20, 000 lower....but that also fell through.

Now, two months on from that, we have had very few viewings (comparatively- we've still had 30 or so in September). We've lowered the price from its original crazy sum by £50, 000, but we've just received another offer £20, 000 below that.

So, I know that's confusing! Four months ago we had an offer on our flat for £450, 000. Since then it had effectively gone down in value by £70, 000.

(price wasn't the reason for either of the sales falling through, BTW)

The people who believe it's an entitled mentality to want to own a 3 bedroom house, do they own or rent?

Cos I think it's a basic thing. To want security in a house you can swing a cat in.

I don't know the areas but I do know a potential project when I see one £350k in Bromley. Its a two bed but others in same street have done loft extensions. You could definitely put your own stamp on it.

I agree with you OP. I am in SW London and the market has definitely cooled. I would even be so bold as to say their is some serious price corrections going on.