Why are property prices rocketing?!

[totallyfedup77]

I’ve just been reading the very depressing article below and don’t understand - we’ve just had Brexit and are still in the midst of a global pandemic. You’d expect prices to be falling if anything but according to this article, in some places they’re up by as much as 48% in a year! Why?!?!

www.dailymail.co.uk/property/article-9621715/Most-expensive-seaside-property-revealed-Salcombe-topping-list.html

@XingMing very sad. Second homes and people buying property to use as Airbnbs should be banned IMO.

Welcome to communism! We still do have some freedoms in this country!

You really have to accept that building in the right areas is the only solution. Not where holiday homes are where there’s little work.

You do not have anywhere near enough brownfield sites to deliver demand. The cost is huge! You will then be bleating about prices. There’s no cheap fix for brownfield sites. The best you can hope for is converted shopping centres! Houses with gardens are often greenfield sites for obvious reasons. You cannot always have what you want! A small holding is a hobby not a necessity.

Welcome to communism! We still do have some freedoms in this country!

No comment on house prices but I don't think you should be so blinkered about home working, it works really well for a very significant percentage and they may well want to do it long term.

Rich getting richer again, and poor getting poorer.
All fine for those with houses and money already, but people I know house searching are being priced out of even the most basic of houses, as people with money and existing properties buy them to rent as a nest egg in the future.

As a future buyer, I'm holding off until things settle.

but I don't think you should be so blinkered about home working, it works really well for a very significant percentage and they may well want to do it long term.

That’s all very well, but if companies decide they want people back in the office then “they” won’t have a choice.

as people with money and existing properties buy them to rent as a nest egg in the future.

Grim. And I hear you about holding off, but how do we know things won’t be even worse in a few years time?

Whether it’s covid or brexit who knows? . But the cost of raw materials is explaoding. We are looking at extending our house rather than moving. We (dh &I I) had a very interesting talk with an architect this week . Materials are in short supply and prices are going up, especially concrete (wtf).

Dh is in construction working on big contracts which are very slow at the moment. Architect works on small contacts, house extensions etc and has never been busier.

I'm just outside of London and prices are dropping massively. Price reductions by 10s of thousands in many cases. My DP is buying at the moment and a flat he viewed 3 months ago has just been reduced by £70k. Another property taken off the market after slowly dropping for £175k over the last year.
I bought my flat 4/5 years ago and the flat upstairs from me is on at the same price. It's in much better condition. They haven't had a single viewing.

@LemonadeFromLemons you right re the math but a lot don't get it & think it's a good thing they gain equity even though it makes it harder to climb the ladder. I'm in my 30s & would really like the opportunity to actually increase the value on my savings. Suppressing interest rates & the props has fucked the housing market up.

@ClingFilmAndGafferTape yes, it does seem that flats aren’t selling, if reports are to be believed. So maybe I should just buy a flat.

Flats, particularly ones in ugly blocks, are not selling, but they are certainly not indicative of the market as a whole. That fire safety certification thing (I forget the name) plus lockdown have left many people not wanting to touch flats with a shitty stick.

I think flats will take a while to recover. Buying is very expensive eg price, SD, fees (pre covid), the market is inflated, people buy later & it's much harder to build equity so imo it makes sense to future proof whatever you do buy. If I was getting on the ladder now I would buy a small house as opposed to a flat. Increased remote working (2-3 days) would mean I could be a bit further out so could afford the house.

It will be down to prices though. A small house may well be quite a bit more expensive than a flat of the same size. First time buyers may well not be able to afford the extra. If they need somewhere to live, choose a flat wisely. There are still great locations and well appointed flats with communal gardens.

I think there’s a fundamental misunderstanding of brownfield sites. They are areas such as disused factories and other buildings. Ones which might be contaminated or very expensive to demolish or even ones you cannot demolish because they are of architectural merit. It’s always more expensive to use brownfield sites.

If people demand gardens the easy and cheap way is to build on farmland. Or in larger gardens as infill. The idea that brownfield will produce cheap housing isn’t the case.

The housing market works on supply and demand. We have more demand than supply in the popular areas. Building is often tightly controlled in those areas so prices go up. So, buy a flat in a great location and at least get something.

The additional pressure on house prices is the fact that so many flats cannot now be sold. Better flats will sell at the right price. But if you all want houses and no building on farmland, expect to pay a lot more. It’s obvious really. There are also millions of people who cannot work from home! Try nursing at home!

I'm just outside of London and prices are dropping massively.

@clingFilmAndGafferTape do you mind saying where? I have friends who are buying (they are fine with a flat and anywhere north or east of London) and they would be keen to find areas that aren't overpriced!

It will be down to prices though. A small house may well be quite a bit more expensive than a flat of the same size. First time buyers may well not be able to afford the extra. If they need somewhere to live, choose a flat wisely. There are still great locations and well appointed flats with communal gardens.

Where I am in London, a flat in z 2-3 is the same price as a house in outer zones. That was the same when I bought a flat & is the same now. I'm not doubting there are good flats & assuming everyone can remote working however in my circumstances if I was buying now I would skip the flat stage. The days of making 200k in 2 yrs on your flat are largely over.

The stupid leasehold laws stops a lot of people buying flats - look at the cladding scandal.

Re working from home, workers are more productive, happier, and it saves employers a ton of money in rent and equipment, so I don't think flexible working is going to go away anytime soon. We were already moving in that direction - even before the coronavirus already knew a few people just in their twenties who had already moved out of London to buy because they only had to commute 2-3 times a week. This has just sped things up.

@izzzzzzzzzzzzzz agree

Not to mention the ftbs in the position to buy will be more likely to have remote working options.

That’s really not understanding that people like doctors and others won’t be home working. There are some people who will negotiate and keep working from home. It’s not going to be available for everyone. It does mean commuting in and out of the suburbs for some and that won’t always be acceptable or convenient. Talking to DD tonight, not a single one of her friends has left London. There are still very popular areas!

I know GPs & police detectives who have worked from home. Of course not every job can be done from home, I don't think anyone has said that.

If I had 700-800k & was buying today I would most likely go for the outer zone house rather than the inner zone flat. Not sure why that's controversial? I'm a Londoner as is DH but our next move will be z4/5 which I would have never considered pre pandemic. I want a bigger house & garden now & what you get for 7 figs near me is not worth it.

If we are talking anecdotes I know loads who have left London, 3 families from dc's class & 6 neighbours plus 2 colleagues. I won't be leaving though as I like being close to family.

@ThisIsStartingToBoreMe

Because in the long term property prices always increase

House prices will always go up in the longer term, but in the short and medium term, they can fall. In the 90s they fell 20%, even more in some areas that had got very 'overheated'. That leads to 'negative equity', which is a problem if you have to move house and your mortgage is still greater than the new, lower, value of the house. At present, things look overheated to me- rapid price rises in an economy that is not healthy and is heading for some big squalls, like tax rises and cuts to spending to pay for covid, and long term problems with imports and exports due to brexit. Even if prices may fall a bit soon, it can still be better buying than renting, though, provided you don't expect to need to move in the short term.

@totallyfedup77

And to the poster above who asked why working from home is unnatural - it’s unnatural because the vast majority of humans are sociable, collaborative beings who enjoy and thrive on working in a group setting. Most people want to meet and interact with others face to face, not talk through a screen all day every day.

I've worked from home most of my life, for about 30 years or so of it anyway, and it is not easy, even for someone like me who is not a social animal at all. I think a lot of more 'normal' people will find it grinds them down in the long term when covid has receded. I think a mix of home and workplace days each week where that's possible would suit more people better than absolute home working.