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.

It's crazy. The deposit for our shell of a house was in the hundreds of thousands. 4% stamp duty. And it still needs a complete gut. We are very lucky to be able to do it, but this would have been very easy on our even half our salaries 20 years ago, it's now much more painful.

I think stamp duty is particularly unfair. I would abolish it were I in power. No way would I swap my house for a similar one simply because of stamp duty so it stops job mobility. Most houses used to be under its limits and those within it usually paid 1%. Now my daughter and her husband like Apatite paid 4% (£30k in their case) on tiny 2 bed London flat. It is such a waste. The other daughter was given a generous £10k by her father to buy her tiny one bed in London and guess what that was exactly the amount of the stamp duty. So instead of that large amount going towards the deposit it was all siphoned off by an over blown huge state which cannot even balance its books so taxes citizens who work hard until the picks squeak at every turn.

Agree with MC if you earn a decent wage aspiring to buy a modest 3 bed house is not entitled. 20 years ago professional couples had few problems buying a 3 bed house in London areas such as Tooting, Islington, Kentish town. Now they are unaffordable unless you already own a property and have some equity in it or have parents who will Lend\give you the deposit. If we get a London mayor who will do something about the ridulous London house prices extra stamp duty and council tax on all foreign owned property since they are benefiting from our strong property laws without having to make a contribution to the UK I think he/ she will be able to persuade a large portion of the electorate to vote for them.

Yes stamp duty makes the situation even harder. Without it people would be able to put down more of a deposit and benefit from lower interest rates.

Greengrow, we paid the exact amount as your daughter did. Now I'm wondering how we will fund the renovation without it taking the next two decades....

What is interesting is that wealthy people want to be in the UK because of the tax system being so generous for them. I think it is terrible that the same benefits are not applied to British people. The mega wealthy who have bought up London are not bringing their wealth with them per se. Their wealth stays out of the UK to avoid taxes.

If I were in power I would apply VAT any non-doms buying homes. I would then allow homeowners to deduct the mortgage interest from their income which would kill the BTL market overnight. House prices in the UK are totally nuts.

Oh and the OP is totally reasonable in wanting a 3 bed home and a working family should be able to afford such a home given their budget. The fact that they can't is so very sad. I hope our politicians hang their head in shame.

I learn today that Scotland is putting its stamp duty up to 12% of expensive property and other changes.
(Separately I noticed there is new Wales legislation that all landlords must be licensed and registered - we are getting more and more differences between the regions in our supposedly united kingdom - not a good thing).

London property prices may look crazy to us ordinary working folk who pay UK taxes but money from abroad is often not taxed or at such a high rate as in UK. A lot of the property money currently flowing into London is corrupt from bribes and backhanders or drugs related. Our strong property laws makes UK very attractive to people wanting a safe no questions asked haven for their ill gotten gains. What makes me see red is if you are a UK citizen your money is scrutinised by the banks and lenders to ensure its not dirty money before you are allowed to buy property but here are no such checks for foreign money.

There are, IMO, many factors that are forcing house prices up, particularly those in London. Near zero percent interest rates, China having a policy of only allowing its citizens to purchase a maximum of two properties, foreign oligarchs and criminals laundering their capital/ill gotten gains. The oligarchs buy so their worthless cash ('cos FIAT money is worthless) is worth more in the long run if it's turned into an asset, and they see the best asset as a London property.

Unfortunately, Mark Carnage (sic) will put up interest rates after the election (he won't dare do so before) because, well, durr, the economy needs him to do so. When it happens so many ordinary hard working people ((c) Gidiot/Selfservative party) who are struggling now due to no pay rise in fuck knows how long (4 years here) will not be able to afford their mortgage and will lose their homes. BTL landlords will have to raise rents to cover their mortgages and their tenants will have to move. The whole system is fucked. Our economic model must change or we'll end up back in the dark ages.

Change ? You want more

It's most of the western world that's fucked economically

You must not post such truthful posts, the sheeple get restless if they see or hear reality

Italy fucked
France fucked
UK fucked
Greece fucked
Portugal fucked

That's enough for now , don't want to unsettle the plebs

For wealthy Chinese and Russians the safest investment for their money are a top notch private British or American education for their children - which also improves their chances of getting citizenship in said countries and then overseas property. Wealthy Chinese and Russians have as much trust in their governments as we do.

want2be
I would then allow homeowners to deduct the mortgage interest from their income which would kill the BTL market overnight.

NO
NO
NO

The USA has that and its been a disaster because people are encouraged to overborrow .... sub prime ....

you know doctortwo I read your entire post thinking 'does that mean prices will go down?' That's sad isn't it. I am a property price junkie.

making childcare tax deductible would be my pref oldboots. Then we might be able to afford our enormous mortgage.
OP I sympathise. We bought a house for a premium last summer and I feel ripped off. I'm grateful that we have somewhere to live but we have well paid jobs and struggle. Our salaries are good but our outgoings are huge. My parents are incredulous.

It's not entitlement. No time for a second job!

I missed 8 pages of this thread, if my post seems a bit page 1

Prices will go down Sarf, but those in London will recover because of overseas cash buyers.

I look at things with an eye as to what I'd invest in if I had the money. For me it's gold, which is criminally undermined by central banks placing hundreds of tonnes of gold futures on the market. Honestly, at $1200ish an oz it's a bargain. It's allowing the Middle and Far Eastern countries to acquire as much gold as they like. In a couple of years this short sighted strategy is going to bite us in the arse as gold goes stratospheric and our currency slumps.

Other than precious metals (platinum is priced below what it costs to mine, get in quick) I'm bullish on alt-currencies. Bitcoin is obviously the biggie as it's the oldest and is being accepted by more and more outlets. I'm also looking at Litecoin, Dogecoin and Startcoin, the latter being of most interest to me as it allows you to invest in projects and get rewarded for doing so. Digital currencies are, IMO, the way forward. They are open, you can follow a trail, and the blockchain means they're totally honest and unimpeachable. You can't fake them. That makes them as good as gold. Real actual gold, not gold futures, they're just pieces of paper, rather like what we use as money.

We have to realise that neoliberalism only works for the top 1%. We need to return to a system that works for the majority or there will be trouble. The only time we've had such a system is between 1945 and the end of the 70s. Unless things change it doesn't matter how rich you are, you are fucked. Fucked if you're poor and vilified and attacked if you're rich. The opposite of Utopia.

We mustn't forget Germany roneik. Production has slumped by over 5% in the last quarter and is most likely down to the stupid sanctions against Russia. German production will likely slump more and that will lead to a slump here too.

Talkinpeace - Your comment doesn't make sense. Americans over borrow because the culture in most parts of America where a big house is strong equated with success. Also having just been through the mortgage process it is not easy to get a mortgage here in the US. We had to put down a 25% deposit, have one year's worth of payments (mortgage, property taxes and insurance) available in cash in addition to our 25% deposit and provide proof that the proceeds from the sale of my place in London had been owned by me for more than 3 years.

In the UK if you have a BTL your income from the property is offset by the interest expense and other expenses which results in the cost of the home being less for a landlord compared to a primary resident who isn't able to claim this deduction. If you equalize the two groups than all of a sudden the two groups are on an even playing field.

Egg I hear you on making childcare fully deductible. I find it incredible that I am a CPA sitting at the table with very senior management of fortune 500 companies, working on some pretty complex accounting that has taken 10+ years to master and at the end of the month my nanny has a higher disposable income than I do. I am very fortunate that DH makes more than 8x my salary and is as keen as I to save as much as possible. However, the current tax system is set up to force the lower income earning spouse to leave employment which is far from ideal.

want2b that sounds like a good idea, making sure there is a years worth of payments, however I think that most people in the UK would struggle with that extra requirement.

I should admit that when we bought in 2011 as first time buyers we were exempt from stamp duty which was a nice saving for us and I personally think all FTB should be exempt. Once you have bought a place and can start paying down the loan then in theory the next step shouldn't need to be so big as the first and the stamp duty could be paid then.

Set your sights lower , here are some 3 beds within traveling distance of london.

Before everyone kicks off about Basildon it's 15 minutes by road to m25

www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION^114&maxPrice=175000&minBedrooms=3&includeSSTC=true&_includeSSTC=on&googleAnalyticsChannel=buying

OK so we are talking wanna outdo the plebs , gotta be top dog and Basildon is so [ ]

Listen those that hold the most debt will be ruined when this house of cards comes down

Think modest and you may have the privilege of coming out the other side unscathed

I heard part of R4 Moneybox earlier. They said on the right to buy scheme in Leeds they had about 140 people they'd helped in the scheme. Some houses were £60k but most just over or just under £100k in value.

York was different as prices were higher and people had to rely on parents more or not buy.

One lady they interviewed who was using help to buy because she wanted to pay 5% deposit and keep the other 5% they had for buying things for the property seemed a bit silly to me - surely better to furnish with second hand junk and keep your debt down.