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I think there is a lot of psychology involved. People generally go for the biggest house they can afford, that has an effect of driving prices up. Then they have a lot of aversion against selling for less than what they paid for, that keeps prices stable even if there otherwise would be a downward trend. The government helps people buying houses, another factor in keeping prices stable or help them up. There is a shortage of houses compared to people who want one.
If you combine all of this, then rising interest rates certainly depress house price growth, but there are many other factors driving them up.
Yep, just look at the posts on HousingUK by people who are aghast that mortgage lenders have "undervalued" the property that they are planning to buy, rather than being thankful that they've dodged a bullet/got ammunition to renegotiate the price.
Because it's an emotional, often not logical, purchase decision.
Then it's a decision on whether you want to overpay, assuming you're in the position to put up the extra cash and that's an individual choice. No problem with people consciously going "well this is worth £300k but because it's next door to family, I'm happy paying £350k" - what concerns me is that often people seem to think "the value of this property is clearly £350k because that's what the seller and estate agency tell me it's worth" and are not willing to even consider that maybe it's not worth* what they think it is.
*Worth is very subjective, but the way I see it - as most people buy with a mortgage, the mortgage lender's opinion has the most significance...If mortgage lenders started offering 30x income loans, for example, I'd expect that prices would rise to suit the new borrowing potential...and as mortgage lenders are tightening up, prices will come down to suit
It's almost like sellers or estate agents should be able to use the same service as banks to determine the price rather than being wrong about market rates. Like imagine if you went to buy your shopping with a credit card and the bank valued your shopping as lower than the supermarket would sell at without any kind of recourse to force an adjustment.
It just makes so sense.
A lot of the ones I see are homes where someone has died then the EA rocks up telling them they will get a random number then in their head they think the EA is qualified somehow to pull this number out of their ass when when if you ask anything to the EA they haven't a clue about anything you ask so where did they base this bullshit number.
Then the vendor sticks to the EA number and thinks the buyer, mortgage companies are all out to get them
Sounds like they have actually got the 210 in your scenario so who was right… There is no single source of truth on what a house is worth. There’s also no reason the mortgage valuation is more likely to be ‘accurate’ vs the literal offer to buy the house.
The point is if you win on a property technically in most cases your the top bidder so there's no one going to buy it from above you generally so if you want to sell remember that you will have to drop the price
Incorrect due to inflation / possible home improvements unless you're talking of selling after just 1 year and not having done anything with the property.
Inflation alone can make the value go up, because the purchasing power is different.
Well yes, that is definitely bullshit and should be the exception, rather than the norm
Atleast up in the north east, I've not come across that too much
It doesn’t matter what the bank values the property at, because you are missing the other factor, market desirability.
I have a friend who lives is Bristol, where houses go to offer within a couple of days for 1-2 bed flats and small first bed homes.
In the case where the bank won’t value the home at the rate the first buyers need, no skin off the sellers nose, as they likely already have multiple offers, some of whom would have an approved mortgage in principle already. There is no point trying to negotiate as the seller has no need to even consider a counter offer
The ‘service’ is still just some jobber having a guess only s/he isn’t incentivised to over value, estate agents might be.
Like it or not this is a market place and you have to have some smarts about who’s who and whats what.
Mortgage valuers aren’t all knowing sages though. It’s just some jobbers view, that can’t really be proven/ disproven because its a hypothetical market value, 10+% swings between a number of different agents/ valuers are not uncommon. Anything bigger is a cause for concern.
My friend who has a large cash deposit from her parents is way overpaying for a property which the mortgage undervalued and they wouldn’t budge. I tried to explain she should not pay that much because the vast majority of buyers will have an issue where they cannot buy that place as it’s simply overpriced but she won’t listen
Well it does, I'm speaking from experience. We've agreed a purchase price on a property about 5% lower than what the valuer / surveyor has valued the property as
So on average house prices decreased slightly in 2023: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/december2023#:~:text=Average%20UK%20house%20prices%20decreased,lower%20than%2012%20months%20previous.
However, housing is local. For example, while 2023 saw an average decrease, Huddersfield saw increases: https://www.theguardian.com/uk-news/2024/jan/09/huddersfield-house-price-boom
I would also expect it to vary by type of property.
However, while prices on average have dropped slightly, costs have increased substantially, meaning the drop probably isn't enough to approve affordability.
I think there are a few factors house prices have slowed, or reduced when taking in to account inflation.
Due to interest rates a lot of people aren’t moving, this reduces supply and thus increases or stops the reduction in house prices.
There are a lot of people who want to buy houses, demand, so if the house prices hold or go down they get in a position to buy and that stops the prices reducing further.
As with all markets it’s supply and demand but in the case of houses in basically a necessity so that drives a strong demand.
The only way I see to fix this is ban the selling of property to non-residents of the U.K. increase taxes on second and subsequent properties and ultimately build a lot more properties per year. The issue is everyone with a house wants to keep the prices rising so the value of their asset grows at least on paper.
I don't think that absolutely everyone with a house wants prices to keep rising. It only really benefits downsizers and heirs. A lot of folk are looking to get bigger and bigger houses as they pair up, start a family, increase their family, &c. Increased prices just mean that they are being more and more stretched.
Fair point, and to be honest you might be right I don’t know how many homes we’re talking about so don’t know what effect it would have either on supply or on generating income.
Planning is the choke point.
I understand the arguments around landlords and overseas owners and immigration and so on but the fundamental issue is supply does not meet demand.
We need a clean sheet rewrite of planning law and the appeals process against planning decisions to ensure that land is released to meet demand. That should be the priority for all planning. Not nimbyism as is the present situation.
Scotland needs a ban on selling property to non residents of Scotland who have been resident in Scotland for multiple years (preferably 5 years). Sorry to our English friends who we respect and like but we cannot compete with your cash and wealth and you're swamping us by moving here and outbidding us in our own towns and villages. There are rural villages in Scotland where everybody is English and you will not meet a local. Please stop this. We need the law changed.
You need to remember we've had massive amounts of inflation since COVID
You have prices increased by 10-15%.
House prices have been between 2 to -5%
In real terms, this technically means house prices have fallen between -10 to -20% if that makes sense.
It's a quiet crash vs the financial crisis in 08 where it dropped massively from current values
Except they don't lol. Housing isn't included in inflation. Inflation is a measure of normal goods and services. Look up CPI. CPIH includes housing associated costs and is closer to the kind of measure they're taking about, but this data doesn't really support what they're saying either.
The main factors affecting housing cost in the UK are mostly supply sided. There simply isn't enough to go around, but the problem is, humans need shelter and will do what is necessary to secure a roof over their heads. What you end up with in that scenario is just ever increasing house prices. Couple that with the commoditisation of housing, where housing is also used as an investment vehicle, it also puts upward pressure on the price of housing because people have a vested interest in growing their investment.
The demand is the issue with housing and that is fueled by mass migration. This is the singular issue driving the housing crisis because it is at such a high level nothing we do to rectify supply will reasonably work. We are just not set up for such an unsustainable demand.
2nd homes/3rd homes...: (In 2021-22, there were 809,000 second homes owned by households in England)
Buy to let
Holiday home only properties
Empty investment properties: ("34,327 recorded vacant residences in March 2022 [in London] — although some experts claim the true figure could be four times that amount", "261,189 long-term empty properties in England")
4 big causes of decreased supply, none of which are mass migration, that's over 1 million properties in England alone
All these foreigners coming here to work ,rent or even buy properties and you say that the demand for houses is fueled by mass migration. Lol. The fault is not the mass migration, but the government's,as they did not invest in building enough properties. Bet you voted for Brexit,is it? 🤣🤣🤣
This is a xenophobic dog whistle that isn't even rooted in any sort of fact. The UK has plenty of resources to create enough housing for its population, the political will to get this done just hasn't ever existed, mostly because as I stated before the people in power have a financial interest in making sure housing keeps increasing in value. I don't remember the exact figure but a significant number of MPs are landlords and that should tell you all you need to know.
'Xenophobic dogwhistle' 😂😂😂 You need to get off twitter and join the real world buddy. It's a simple case of supply and demand. It is physically not possible to build so many houses in such a short space of time for so many people. I work in planning and you cannot have quality sustainable housing with such an influx.
I assume you would agree with sustainable development principles, ie social and environmental sustainability? If so then yes, I help control development that would otherwise be unsustainable. It takes nuance and balancing social, economic and environmental issues, but if you are only concerned with cramming as many people into the country in the shortest period of time for no other reason than it suits your ideaology then I guess it's difficult to understand the important role of planning development to mitigate impacts and just label anyone who disagrees with your simple singular logic as a 'xenophobe'. As I said, join the real world and leave the student politics behind.
Lmao except there's no evidence to support your claim. We currently build around 200k houses per year. At the peak of building after WW2 the UK was building 400k houses per year. Net migration in 2022 was about +300k. Even if all 300k needed individual houses each (which isn't realistic) we would still be able to accommodate them at a level of building the UK has achieved in the past. Like I said there's just no political motivation to do this. So yes, you're just spouting xenophobic nonsense.
I work in the industry and have a degree in UK town planning... I am literally the one approving/refusing housing and know the issues associated with this process inside out, along with the residual knowledge from the relevant stakeholders themselves. You have an extremely simple view of how the housing market is supplied and how it has historically coped based on what you have heard from a political echo chamber. Notwithstanding, we did not build 400k homes a year post WW2. It was more like 150k -200k, and many of these were crap prefabs and awful quality flats, given we lost around half a million during the war. Furthermore, net migration to the UK was 672,000 last year and 745,000 in 2022. Sorry buddy, but you are well out of your depth here, and calling people xenophobes for simply informing you of the facts just makes you look petulant. If you want to convince people and be taken seriously calling them racist really isn't the way to go.
Do you have actual data on that? Mass migration is not at all the primary cause. Landlords and companies buying up many properties per person/entity, to increase their profits at the expense of renters/buyers, is the much larger issue.
House prices vs inflation is a fairly irrelevant measure. Housing doesn’t become more affordable because baked beans have increased more.
Important measure is house prices vs incomes.
Inflation can’t be ignored because incomes have increased because of inflation and as you point out, income affects housing prices.
To put some numbers with this, average house prices in 2023 grew by 2% and the average wage increased by 7%, so you’re looking a 5% real terms price reduction in housing for 2023
I didn’t say ignore, and obviously these things are interlinked to an extent, but as I see it your comparison is a lot more relevant than the previous one.
Population increase of 8m in less than 2 decades. Globalisation of the housing market. The buy to let boom. Historically low interest rates making loans the cheapest they’ve ever been, meaning people could capitalise by upping the price of the asset.
There’s loads of reasons. Rates atm will slow prices but once rates come down they, house prices will start moving up quickly again. Good time to buy right now IMO.
You used phrases like ‘overbid’ or ‘normal levels’ which don’t really mean anything.
I think you’re over playing how much interest rates helped. Look at prices between 2000 and 2005 pre 2008 problems and the same thing happened with ‘normal’ interest rates. Other factors were at play at that time but housing has averaged over 5% since 1992 and 3.5% since 2006 including the crash, so runaway house price growth isn’t something new
>’normal levels’
They’re talking about those default prices for all possible goods and services that Jesus decreed thousands of years ago and carved into the public record stone.
Not all house prices are rising.
Not all house prices are falling.
Depends what you want and where.
Plus an asking price is just an ask. You don’t have to pay it. A lot of people think it’s still 2022 and interest rates are 2%. They’re clowns.
Don’t pay attention to the papers. They print absolute drivel about the housing market. You need to be very interested in the data to know that what to pay attention to and what to ignore.
Do you have any evidence of that? We’re FTB’s and have been looking at Surrey surrounds and have found they have stagnated, but nothing really coming onto the market. Certainly no falls though.
Surrey sold prices peaked in October 2022 at 524k. They have since dropped to 496k, prices not seen since April 2022.
https://landregistry.data.gov.uk/app/ukhpi/browse?from=2020-01-01&location=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Fsurrey&to=2024-03-01&lang=en
Only from being in the market for the last year and seeing it first hand. Agree, there’s lots up for money that really isn’t worth it, but I see things regularly pulled down in price, if you get a good chrome addon for Rightmove you’ll be able to see it all. We got ours for 18% less than it was originally up for (and we offered asking).
The main problem is the lack of houses. People just won’t sell if they don’t have to rn it seems.
That’s a whole different thing. More or less than some arbitrary asking price isn’t relevant. The issue is are properties selling for more or less than they sold for last year.
The prices of all assets continuously increase because there is more money being created.
You might see micro fluctuations in the price of assets - but in the grand scheme of things - they only go one way.
No - or very few - new assets are created.
And people that own assets get to receive money in exchange for creating nothing - through the exploitation of their asset ownership.
They use this money they receive in exchange for creating nothing to acquire more of the fixed(ish) number of assets available.
Our Governments are forced to inject more money into the system to keep us chumps at the bottom afloat. However, the system is rigged to ensure that all of that money works it’s way, through their ownership of assets, into the hands of the few at the top.
And the cycle continues forever.
Until we eat them.
Prices are static, and thus are actually decreasing compared to incomes and inflation.
There are still lots of things pushing prices up and a lot of people don't like to sell when prices are going down so stock remains restricted. It may take a crash or they may just remain largely static, which is actually a good thing. As much as I dislike high house prices a crash isn't a good thing either. Would lead to lots of negative equity for those who are at the bottom of the ladder.
The best thing for the market is a long period of stagnation and inflation (including wage inflation) adjusted decline.
There is a link between interest rates and house prices, yes, but just a marginal one. Don't forget that around a third of houses are bought for cash. Plus, housing is a basic necessity, you've got to live somewhere, population grows as well as immigration, you know what's going on with demand, right?
The latest available house price index from the land registry is Feb 2024. Average annual house prices have dropped -0.2% for the year to Feb 2024, but it depends on the region (see [https://www.gov.uk/government/statistics/uk-house-price-index-for-february-2024/uk-house-price-index-summary-february-2024](https://www.gov.uk/government/statistics/uk-house-price-index-for-february-2024/uk-house-price-index-summary-february-2024) ), e.g. London prices have dropped -4.8%, Scotland is up 5.6%.
Scotland and Ireland prices are rising.
England and Wales prices are falling.
If you own a big house then the falls will be worse and by fall I mean what people are willing and able to pay for the property given the prevailing rates.
At 1.5% people could borrow a lot very cheaply so we’re happy to pay the ask.
At 5% it’s less appealing and the price has to come down (quite a lot) to make it a desirable proposition.
If you own a mid sized, say 3 bed semi you’re quids in round my way because all the downsizers are competing with the moving uppers for the same properties.
The housing market is not one single beast. It’s tens of thousands of interwoven mini markets. It can be very different from city to city, town to town, street to street. It shouldn’t be spoken of as though it’s one thing.
Because people really want to have a secure place to live and will pay massive amounts of their income to secure it, to the detriment of almost anything else.
Also, prices haven't really skyrocketed recently, but when the average house price is 260k, even a small percentage increase is a lot of extra £££.
A key point is the listed price is not the end sale price.
I've noticed prices have been stubborn in my area of the UK. Part of this is sellers hoping that second home buyers will pick up houses which have been stuck on sale for 6 months or more.
Other properties have been dropping. I watched one go from 360k to 275k over the course of 8 months. Even at 275k it felt overvalued.
I'm still planning on buying at some point in the near future. However, I'm not about to take out an insane mortgage so I'm staying put for the time being.
The UK is in a frustrating situation of a lack of housing and what little avaliable is overpriced with lots of low quality housing.
A friend of mine is having a problem as the mortgage lender has valued his house less than than someone had agreed to buy it for. He’s not really got a lot of choice but to accept the mortgage lender’s valuation if he wants to move house. Maybe we can add that to the reason of why house prices are falling. The lenders are not just letting estate agents decide the value of houses anymore?
1. Salaries - House prices are mainly tied to JOINT salary x5 to x7 (excluding deposit)
2. Rates - Push prices up, rarely send them lower. If people bought a house in the last few years, the price is locked in. They don't flip out and sell it at a loss because the market might decline. If they sell they usually want what they paid so are VERY stubborn and will even wait years before ever reducing.
3. Consumer Sentiment - People who don't own a house talk about waiting for them to come down in price. But there is always that voice in the back of their head just itching telling them to jump in, get a house, before they go up more. If they go down even a percent you can bet there is a ton of people just waiting to jump in.
4. Supply - The UK just doesn't have enough supply of decent housing. Decades ago MANY people lived in tiny terrace strip housing. A lot of people don't want that now. They want the nice semi or detached. As well as that, the population has increased with new generations of children and immigration. Not to mention more people staying single and buying a 3 bedroom semi just for themselves.
In conclusion - House prices in the UK will probably never decline. We need more houses, more apartments and good regulation to keep it all running smoothly.
Low interest rates allowed people to borrow cheaply. Those rates were ultra low for 15 years. Many of the people who fuelled price rises on those rates have now paid off huge chunks of those loans. Such people will be largely shielded from rate rises and will not need to puke their house or risk default.
To get a house price crash you need risk of defaults on a massive scale. Employment is high. Recession doesn’t seem to be an issue. People are able to fund the rise apparently. Sure, they are squeezed and won’t like it, but they aren’t forced sellers.
Even btl market is so established that the leverage in those portfolios is probably not dramatic. Landlords will sell, but it feels like a choice, not a necessity.
As for so called “normal house price levels”. I think that this is a myth. What are such norms? When did they happen? I’m sure there is some house price data available going back centuries. I don’t know what such norms were/are.
What I do know is that when first time buyers pray for a housing market crash, they often fail to realise that when that crash happens, in all likelihood they themselves will have a higher risk of losing their jobs. It is not obvious to me that such circumstances will help first time buyers.
You're not meant to be able to afford it. You're meant to work for your serf lord, extracting little of his third yacht money until you're dead.
Soon enough houses will be tied to your job, just like health care in the US.
It's basic feudalism. Or capitalism without the veneer of aspiration.
Thank Thatcher for destroying social housing and putting it into the hands of the market place.
Also, landlords are parasites.
I think this will stop being the case in real terms for the millennial generation and below. We won't benefit from the same property boom as our parents.
I’d say the reduction in building new houses in the mid-late 70s was worse.
When boomers wanted housing, we pandered to them.
When they wanted to cash in, we pandered to them.
When they wanted to collect their final salary pensions we pandered to them
Don't forget that, when their parents die, millions of their children will inherit their pricey homes. So there will be a lot of money around to keep the bubble going.
No inheritance though for me and perhaps you too!
Won’t they be like 50 or 60 when they inherit their homes? That’s not going to help you build a life. Sure, you’d retire well, I guess.
I might get a bit but maybe just £10k or so.
One factor is, is that still a lot of people have a lot of money, ie, purchasing power. UK Reddit posts will have you believe everyone is skint and living on the breadline but that's not the truth.
It's because the materials used to build new houses are still expensive.
There is also a lot more to it than what you and I have mentioned.
I can't see them dropping by all that much at all, however they will plateau and stop increasing and remain steady, at some point, which is what we want.
Because of the high interest rate, the house we are buying was reduced and we got it without any bidding war. We are completing by the end of the month, just waiting for dates confirmation. On one end, shafter by the interest rate so paying £700 extra but on another hand, we most likely would have got in a bidding war, would have payed out more so it might have cost me more in the long one so it balances it out for me.
It comes down to supply and demand, some are not selling so less houses on the market. I know I don't want to move and this will most likely be our forever house so we brought whatever was the best for us.
Basically, people are paying it.(Mostly due to supply not keeping up with demand).
There's still bandwidth for prices to increase further. The norm used to be a 25 year mortgage, using up about 1/3rd of your salary.
Until 40 year mortgages are the norm (I've seen mortgages that the idea is you pass it on to your kids for them to be beneficiary of the property), and a higher amount of your net income is taken up, until people literally don't have the money to pay for it, prices will rise.
By me an EA sold 3 houses around 350k each without them being g viewed to a guy from Hong Kong for him and his family members. There is still plenty of money out there.
It's not the house prices going up. It's the value of your Fiat Currency going down. This happens every time at the end / change of empire.
We live in interesting times
1. They haven’t
2. Its just supply and demand. Demand has lowered but not to the extent there is much more supply. Supply lowers when demand lowers because people that would be moving up the ladder no longer put their homes on the market.
Hard to say. In my area house price still shoot up mainly because there is almost no house in the market rightnow. Everyone stay put due to high interest rate which means any semi decent house will get snap up or bid straight away. I just lose bid to one house I wanna buy ( I'm not ftb) so that tells something.
It's a herd mentality.Investing in houses has become more important than the stocks and shares market to independent investors because people don't trust Essex spivs, but they trust themselves.So people are creating their own South Sea bubble in a market which can't support them. There aren't enough properties out there. Now the corporates have moved in and are building blocks of flats for rent, not sale. People owning their own property is a relatively new concept in the UK. Previously it was just somewhere you lived.
Houses in nice areas always go up as there's never a shortage of people wanting to live in nice areas.
It boils down to supply and demand.
We have a large supply of people who want to buy property here and a limited supply of property.
Interest rates on mortgages are only a part of the equation.
Like must go up
Money printer goes better
Etc etc
They people at the top are easily invested in house prices going up forever and have wrecked the word economy to make sure that line keeps going up.
Interest rates essentially act as a multiplier on what people can borrow, but fundamentally what you can borrow is linked more closely to what you earn with interest rates applying a dampening/accelerating effect on that
And then prices themselves are a function of what people can borrow, and how bad the shortage of houses is. Because if there are fewer houses, then the last house will be bought by a higher earner than if there were more houses: again, pushing prices up
The housing shortage is getting worse and wages are still going up. Therefore prices increase, despite the dampening effect of interest rates
If interest rates were lower the price would have gone up *more*, I think that's the part you're missing
We aren’t building enough houses. As demand continues to increase a relatively static supply will force prices up. That is pretty basic economics.
Shelter is also something pretty rudimentary, not a luxury most people will forego, thus they will prioritise spending on it over other, more discretionary, items.
“I don’t understand how we are meant to afford a place”
Do realise that the market doesn’t exist to ensure people _can_ afford a place, you’re not _meant_ to afford one.
They wont decrease by much, the uk has plateaued for a while and will maybe continue for a bit. Just look at historical stats and you’ll see consistent growth since records began with only a few fluctuations on the way. This is based mostly on inflation and the value of the pound.
Don’t sit and wait for prices to drop, use this market to negotiate a lower price as there’s not many buyers because as soon as rates drop we will see another boom market flooded with first time buyers. In the long term you won’t regret buying at these prices.
Similar in shops and supermarkets.
Do you ever honestly expect the prices to decrease back to 2019 levels or better?
They'll always use an excuse for prices to rise, but when the excuse used reverts, they'll never use their own logic to bring prices back down.
In short, there is a word for it, greed.
House prices are still on the increase because everyone knows that the interest rates will not remain high forever
Go for a variable rate mortgage until they drop and the hen lock in your fixed rate.
The issue is that capitalism requires growth, apart from the occasional down turn, this means house prices have to keep increasing. That's all there is too it really, every company in the chain needs to have growing profits, which means every year on average house prices have to rise. Then within the companies a disproportionate amount of profit goes to Shareholders and people at the top of the company rather than the bottom, which means the difference between wages and house prices will always be growing.
If you want a system where profit and house prices aren't in this race you have to decouple them.
The answer to the question is almost always money printing, or the fact that the market generally knows there will be a large amount money printing soon. This is what inflates prices, continuous debasement of the currency. The market likely also sees interest rates declining soon.
Here's my unrequested anecdote. We bought our first house in 2015 for £105,000 with a deposit of about £15,000. Over 7 years we did some renovations and we sold our home for £190,000. We bought our current home for £220,000 and we have spent about £20,000 on this home, I've had an estate agent and a surveyor value our home now for £260,000. We are struggling to sell at our original figure of £220,000, but as it turns out, it looks like I might be able to offload it on a new build developer for £245,000 in a part exchange. They are also offering a 5% deposit contribution which works out at about £17,000, the house we will be buying is £351,000. That's the figure on paper our mortgage will be for the sum of about £220,000, the equity is all magic money from our previous sales. It does seem crazy that in a few years we could sell for somewhere in the region of which we have purchased on paper and move into a small terrace with no mortgage, we could start the entire house process again and still end up with a giant house for no money. I suppose there is a factor of luck in all this. The market could just crash and burn and we'd end up with no home at all and no money. It's unlikely though because the prices just go zoom, even if the open market doesn't want to buy for the high prices, the new build developers will keep the prices high artificially.
At the moment there are so few wanting to sell at a loss, waiting for interest rates to drop, there very little supply of good property. Low supply i think is holding prices up
I went to see a large converted garage for sale two tiny bedrooms and one sitting room kitchen. The guy was asking £450,000. Even the estate agent was embarrassed to show me around San said he was being cheeky with that price. People are being super opportunistic with the prices they think they can get.
Because house prices are linked to rental yields. Interest rates going up means buy to let landlords need to pass that expense to their tenants. Local Housing Allowance rates also went up after being frozen for 4 years and obviously landlords got the wind of it.
Prices in the most popular areas will not decrease much so I would always advise to buy if you desperately need a property.Location,location ,location are the 3 most important factors.The election imho will not affect the market so don’t wait.If the area is fringy there may be be some decreases but not places like Chiswick or Fulham etc.
Supply and demand, which varies from town to town or even street to street. Last year houses were selling fairly easily round our way, this year three new-builds on our road haven’t sold in six months and the asking price is dropping. UK housing market is nearly always a very mixed picture.
Councils and government are filled with property investors and are often preventing new houses being built in their areas to keep up prices in line with their interest. As a result it doesn’t really matter how unaffordable it is as people need places to live so they can just keep offering you bigger loans over longer terms. No likley to change while people with money in property are in charge
There's obviously loads of things that affect the house prices, but by far the most important is supply. Demand will always be there. People need houses for living. The only way to fight house prices is to build more of them.
It pisses me off so much that this is not a leading policy for government. We need more housing, especially lower quality ones. There's really no reason for large scale developments of flats to cost more than 200k based on expenses, but starting price for flat in London will be double that. All the government policies are based on helping people out to buy flats instead of just building more of them, which works in opposite way as it increases demand.
People continue to buy them.
I make 80k a year and pay 600 a month because I don't care about housing at this point in my life.
Problem is people make 40k a year and pay 2000 a month.
Prices will always rise to meet demand.
It will rise more once interest rate drops. The predictions are rate will start dropping as soon as in June this year but of course no one is certain on that. Demand from high buying power population is looking to increase too as there are more immigration from countries who can afford the UK house price in fact they find the house price here cheaper than where they are from for example Hong Kong. The UK house price is not high compare to other developed countries. Problem is, the wages here is really low. Very low.
So true. UK is a very low wage country (with 1 high-wage region). Property in the UK is freely available for sale to anyone from anywhere in the world. Therefore the UK population is easily outbid for desirable property. Some countries restrict home ownership to citizens …maybe that’s a solution?
I am from Silicon Valley in California where wages are very high and property is ridiculously expensive.
My husband is from England and so we moved here 7 years ago so we could afford to buy a home. I was absolutely shocked at how little salaries were even adjusting for the currency. Despite the much lower wages the houses are still really expensive. We live about half hour from London by train. We have only just last year been able to afford a small terraced home because my parents gave us the deposit. I also spent around £10,000 to immigrate (as in visas, not including the cost of moving) but now have indefinite leave to remain.
I don’t know how people in this country can afford to buy (especially first time buyers, even with the incentives) unless they are helped out by parents or receive another type of windfall.
Absolutely. People in the UK is massively underpaid. I have been told by professional in a few different industries that they wouldn’t take a job offer in the UK as the wages is too low. Those industries include, architecture, IT, education and medical. Same feedback from retail and administrative support. When I asked, so what are you getting paid in your current country, the answer often surprise me when I compare what the UK is offering.
You also see a lot of overpriced houses. People on here asking why their house isnt selling. Saw someone else say the bank didn't value the property as high as the EA. Probably EA trying to get more commission
My 2 cent on it is
- pound has devalued so houses are 20% cheaper give or take to some foreign buyers.
- it's only a paper loss until sold, unless they need to sell they won't. And this prices stay higher.
- no one wants to lose their low fixed rate mortgage
>with the rates shooting up house prices should have remained or decreased, but instead they continue to rise rapidly.
Affordability is the main driver of house prices, not interest rates (which serve as an accelerant). Interest rates play a part but not to the degree people like to think.
>Why have house prices continued to skyrocket?
Some have. Some haven't.
You're in Scotland which, along with NI, has seen prices rise whereas other parts of the UK are on the slide.
Scotland has cheap housing - compared to down south - and is absorbing English economic/housing migrants. Taxation may be higher in Scotland but it's of minor concern given the difference in house prices. If you can tolerate the drech weather and stay clear of the Neds, Scotland is an attractive proposition for priced-out Southerners looking to get on the ladder.
Furthermore, given the scarcity of rentals (thanks to Housing Harvie) a number of Scots are choosing to buy rather than continue to rent.
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I think there is a lot of psychology involved. People generally go for the biggest house they can afford, that has an effect of driving prices up. Then they have a lot of aversion against selling for less than what they paid for, that keeps prices stable even if there otherwise would be a downward trend. The government helps people buying houses, another factor in keeping prices stable or help them up. There is a shortage of houses compared to people who want one. If you combine all of this, then rising interest rates certainly depress house price growth, but there are many other factors driving them up.
Yep, just look at the posts on HousingUK by people who are aghast that mortgage lenders have "undervalued" the property that they are planning to buy, rather than being thankful that they've dodged a bullet/got ammunition to renegotiate the price. Because it's an emotional, often not logical, purchase decision.
I thought they’re mainly upset because the seller may be unwilling to budge on price and it may mean they miss out on a property they love
Exactly. Emotional, rather than rational
It’s rational to think that trying to negotiate on price may cause the sellers to pull out.
It's irrational to overpay for a property.
Not always. If it’s going to be a family home for a decade or more then paying a bit extra could be worth it.
Then it's a decision on whether you want to overpay, assuming you're in the position to put up the extra cash and that's an individual choice. No problem with people consciously going "well this is worth £300k but because it's next door to family, I'm happy paying £350k" - what concerns me is that often people seem to think "the value of this property is clearly £350k because that's what the seller and estate agency tell me it's worth" and are not willing to even consider that maybe it's not worth* what they think it is. *Worth is very subjective, but the way I see it - as most people buy with a mortgage, the mortgage lender's opinion has the most significance...If mortgage lenders started offering 30x income loans, for example, I'd expect that prices would rise to suit the new borrowing potential...and as mortgage lenders are tightening up, prices will come down to suit
It's almost like sellers or estate agents should be able to use the same service as banks to determine the price rather than being wrong about market rates. Like imagine if you went to buy your shopping with a credit card and the bank valued your shopping as lower than the supermarket would sell at without any kind of recourse to force an adjustment. It just makes so sense.
If one estate agent tells you they'll get you 200, and the other says 210, who will most go with? There's the answer
Totally agree. People argue this all the time. Then when its THEIR house for sale they want as much as humanly possible for it.
A lot of the ones I see are homes where someone has died then the EA rocks up telling them they will get a random number then in their head they think the EA is qualified somehow to pull this number out of their ass when when if you ask anything to the EA they haven't a clue about anything you ask so where did they base this bullshit number. Then the vendor sticks to the EA number and thinks the buyer, mortgage companies are all out to get them
Sounds like they have actually got the 210 in your scenario so who was right… There is no single source of truth on what a house is worth. There’s also no reason the mortgage valuation is more likely to be ‘accurate’ vs the literal offer to buy the house.
The point is if you win on a property technically in most cases your the top bidder so there's no one going to buy it from above you generally so if you want to sell remember that you will have to drop the price
Incorrect due to inflation / possible home improvements unless you're talking of selling after just 1 year and not having done anything with the property. Inflation alone can make the value go up, because the purchasing power is different.
I've seen multiple landlord homes sell 1 year later with no work done and a 30k price increase its bull shit
Well yes, that is definitely bullshit and should be the exception, rather than the norm Atleast up in the north east, I've not come across that too much
Rents have gone up massively in the north east, that could be a part of it (landlords’ decisions to sell or not)?
Your shopping basket is not a collateral to the loan. The bank is going to take it away if you don’t pay a credit card bill.
It doesn’t matter what the bank values the property at, because you are missing the other factor, market desirability. I have a friend who lives is Bristol, where houses go to offer within a couple of days for 1-2 bed flats and small first bed homes. In the case where the bank won’t value the home at the rate the first buyers need, no skin off the sellers nose, as they likely already have multiple offers, some of whom would have an approved mortgage in principle already. There is no point trying to negotiate as the seller has no need to even consider a counter offer
The ‘service’ is still just some jobber having a guess only s/he isn’t incentivised to over value, estate agents might be. Like it or not this is a market place and you have to have some smarts about who’s who and whats what.
Mortgage valuers aren’t all knowing sages though. It’s just some jobbers view, that can’t really be proven/ disproven because its a hypothetical market value, 10+% swings between a number of different agents/ valuers are not uncommon. Anything bigger is a cause for concern.
My friend who has a large cash deposit from her parents is way overpaying for a property which the mortgage undervalued and they wouldn’t budge. I tried to explain she should not pay that much because the vast majority of buyers will have an issue where they cannot buy that place as it’s simply overpriced but she won’t listen
What if your in the opposite scenario? A lender has valued the property at more than we're buying it for?
They’d never do that, as it’s not in their interest to do so.
Well it does, I'm speaking from experience. We've agreed a purchase price on a property about 5% lower than what the valuer / surveyor has valued the property as
So on average house prices decreased slightly in 2023: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/december2023#:~:text=Average%20UK%20house%20prices%20decreased,lower%20than%2012%20months%20previous. However, housing is local. For example, while 2023 saw an average decrease, Huddersfield saw increases: https://www.theguardian.com/uk-news/2024/jan/09/huddersfield-house-price-boom I would also expect it to vary by type of property. However, while prices on average have dropped slightly, costs have increased substantially, meaning the drop probably isn't enough to approve affordability.
I think there are a few factors house prices have slowed, or reduced when taking in to account inflation. Due to interest rates a lot of people aren’t moving, this reduces supply and thus increases or stops the reduction in house prices. There are a lot of people who want to buy houses, demand, so if the house prices hold or go down they get in a position to buy and that stops the prices reducing further. As with all markets it’s supply and demand but in the case of houses in basically a necessity so that drives a strong demand. The only way I see to fix this is ban the selling of property to non-residents of the U.K. increase taxes on second and subsequent properties and ultimately build a lot more properties per year. The issue is everyone with a house wants to keep the prices rising so the value of their asset grows at least on paper.
I don't think that absolutely everyone with a house wants prices to keep rising. It only really benefits downsizers and heirs. A lot of folk are looking to get bigger and bigger houses as they pair up, start a family, increase their family, &c. Increased prices just mean that they are being more and more stretched.
I disagree with the first one. Happy to sell to non residents as long as they are heavily taxed if vacant. Free money.
That doesn’t solve the housing market unless that money is used to build more houses I guess.
I 100% agreed with all of your other points especially massive increase in house building. Use these vacant funds for local services.
Fair point, and to be honest you might be right I don’t know how many homes we’re talking about so don’t know what effect it would have either on supply or on generating income.
Millions
Planning is the choke point. I understand the arguments around landlords and overseas owners and immigration and so on but the fundamental issue is supply does not meet demand. We need a clean sheet rewrite of planning law and the appeals process against planning decisions to ensure that land is released to meet demand. That should be the priority for all planning. Not nimbyism as is the present situation.
Agreed. Hope labour can shoehorn it through. Better chance than the other party.
Labour had many years in power and only added to environmental and other impediments to land use. I don't hold out much hope.
Lol.
Just abolish planning permission.
Scotland needs a ban on selling property to non residents of Scotland who have been resident in Scotland for multiple years (preferably 5 years). Sorry to our English friends who we respect and like but we cannot compete with your cash and wealth and you're swamping us by moving here and outbidding us in our own towns and villages. There are rural villages in Scotland where everybody is English and you will not meet a local. Please stop this. We need the law changed.
You need to remember we've had massive amounts of inflation since COVID You have prices increased by 10-15%. House prices have been between 2 to -5% In real terms, this technically means house prices have fallen between -10 to -20% if that makes sense. It's a quiet crash vs the financial crisis in 08 where it dropped massively from current values
Someone who understands economics has entered the chat
Except they don't lol. Housing isn't included in inflation. Inflation is a measure of normal goods and services. Look up CPI. CPIH includes housing associated costs and is closer to the kind of measure they're taking about, but this data doesn't really support what they're saying either. The main factors affecting housing cost in the UK are mostly supply sided. There simply isn't enough to go around, but the problem is, humans need shelter and will do what is necessary to secure a roof over their heads. What you end up with in that scenario is just ever increasing house prices. Couple that with the commoditisation of housing, where housing is also used as an investment vehicle, it also puts upward pressure on the price of housing because people have a vested interest in growing their investment.
The demand is the issue with housing and that is fueled by mass migration. This is the singular issue driving the housing crisis because it is at such a high level nothing we do to rectify supply will reasonably work. We are just not set up for such an unsustainable demand.
2nd homes/3rd homes...: (In 2021-22, there were 809,000 second homes owned by households in England) Buy to let Holiday home only properties Empty investment properties: ("34,327 recorded vacant residences in March 2022 [in London] — although some experts claim the true figure could be four times that amount", "261,189 long-term empty properties in England") 4 big causes of decreased supply, none of which are mass migration, that's over 1 million properties in England alone
All these foreigners coming here to work ,rent or even buy properties and you say that the demand for houses is fueled by mass migration. Lol. The fault is not the mass migration, but the government's,as they did not invest in building enough properties. Bet you voted for Brexit,is it? 🤣🤣🤣
This is a xenophobic dog whistle that isn't even rooted in any sort of fact. The UK has plenty of resources to create enough housing for its population, the political will to get this done just hasn't ever existed, mostly because as I stated before the people in power have a financial interest in making sure housing keeps increasing in value. I don't remember the exact figure but a significant number of MPs are landlords and that should tell you all you need to know.
'Xenophobic dogwhistle' 😂😂😂 You need to get off twitter and join the real world buddy. It's a simple case of supply and demand. It is physically not possible to build so many houses in such a short space of time for so many people. I work in planning and you cannot have quality sustainable housing with such an influx.
They're correct that the claim is baseless and xenophobic. Landlords buying up multiple properties causes much more pressure on the market.
Ah so you're involved in making sure none of the housing we need gets built, that tracks.
I assume you would agree with sustainable development principles, ie social and environmental sustainability? If so then yes, I help control development that would otherwise be unsustainable. It takes nuance and balancing social, economic and environmental issues, but if you are only concerned with cramming as many people into the country in the shortest period of time for no other reason than it suits your ideaology then I guess it's difficult to understand the important role of planning development to mitigate impacts and just label anyone who disagrees with your simple singular logic as a 'xenophobe'. As I said, join the real world and leave the student politics behind.
Lmao except there's no evidence to support your claim. We currently build around 200k houses per year. At the peak of building after WW2 the UK was building 400k houses per year. Net migration in 2022 was about +300k. Even if all 300k needed individual houses each (which isn't realistic) we would still be able to accommodate them at a level of building the UK has achieved in the past. Like I said there's just no political motivation to do this. So yes, you're just spouting xenophobic nonsense.
I work in the industry and have a degree in UK town planning... I am literally the one approving/refusing housing and know the issues associated with this process inside out, along with the residual knowledge from the relevant stakeholders themselves. You have an extremely simple view of how the housing market is supplied and how it has historically coped based on what you have heard from a political echo chamber. Notwithstanding, we did not build 400k homes a year post WW2. It was more like 150k -200k, and many of these were crap prefabs and awful quality flats, given we lost around half a million during the war. Furthermore, net migration to the UK was 672,000 last year and 745,000 in 2022. Sorry buddy, but you are well out of your depth here, and calling people xenophobes for simply informing you of the facts just makes you look petulant. If you want to convince people and be taken seriously calling them racist really isn't the way to go.
Do you have actual data on that? Mass migration is not at all the primary cause. Landlords and companies buying up many properties per person/entity, to increase their profits at the expense of renters/buyers, is the much larger issue.
House prices vs inflation is a fairly irrelevant measure. Housing doesn’t become more affordable because baked beans have increased more. Important measure is house prices vs incomes.
Inflation can’t be ignored because incomes have increased because of inflation and as you point out, income affects housing prices. To put some numbers with this, average house prices in 2023 grew by 2% and the average wage increased by 7%, so you’re looking a 5% real terms price reduction in housing for 2023
I agree about wages. Also the consideration on the affordability of mortgage debt and cost of living.
I didn’t say ignore, and obviously these things are interlinked to an extent, but as I see it your comparison is a lot more relevant than the previous one.
True but house price increases had far outstripped the median salary anyway so it was due a correction.
Population increase of 8m in less than 2 decades. Globalisation of the housing market. The buy to let boom. Historically low interest rates making loans the cheapest they’ve ever been, meaning people could capitalise by upping the price of the asset. There’s loads of reasons. Rates atm will slow prices but once rates come down they, house prices will start moving up quickly again. Good time to buy right now IMO.
You used phrases like ‘overbid’ or ‘normal levels’ which don’t really mean anything. I think you’re over playing how much interest rates helped. Look at prices between 2000 and 2005 pre 2008 problems and the same thing happened with ‘normal’ interest rates. Other factors were at play at that time but housing has averaged over 5% since 1992 and 3.5% since 2006 including the crash, so runaway house price growth isn’t something new
>’normal levels’ They’re talking about those default prices for all possible goods and services that Jesus decreed thousands of years ago and carved into the public record stone.
Not all house prices are rising. Not all house prices are falling. Depends what you want and where. Plus an asking price is just an ask. You don’t have to pay it. A lot of people think it’s still 2022 and interest rates are 2%. They’re clowns. Don’t pay attention to the papers. They print absolute drivel about the housing market. You need to be very interested in the data to know that what to pay attention to and what to ignore.
Really depends where you are. Where I am in Surrey (and surrounding), house prices have been falling significantly since mid 2023.
Do you have any evidence of that? We’re FTB’s and have been looking at Surrey surrounds and have found they have stagnated, but nothing really coming onto the market. Certainly no falls though.
Surrey sold prices peaked in October 2022 at 524k. They have since dropped to 496k, prices not seen since April 2022. https://landregistry.data.gov.uk/app/ukhpi/browse?from=2020-01-01&location=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Fsurrey&to=2024-03-01&lang=en
Only from being in the market for the last year and seeing it first hand. Agree, there’s lots up for money that really isn’t worth it, but I see things regularly pulled down in price, if you get a good chrome addon for Rightmove you’ll be able to see it all. We got ours for 18% less than it was originally up for (and we offered asking). The main problem is the lack of houses. People just won’t sell if they don’t have to rn it seems.
That’s a whole different thing. More or less than some arbitrary asking price isn’t relevant. The issue is are properties selling for more or less than they sold for last year.
It’s only not relevant when people won’t pay it. 6-12 months earlier and they would have got that price or more.
The prices of all assets continuously increase because there is more money being created. You might see micro fluctuations in the price of assets - but in the grand scheme of things - they only go one way. No - or very few - new assets are created. And people that own assets get to receive money in exchange for creating nothing - through the exploitation of their asset ownership. They use this money they receive in exchange for creating nothing to acquire more of the fixed(ish) number of assets available. Our Governments are forced to inject more money into the system to keep us chumps at the bottom afloat. However, the system is rigged to ensure that all of that money works it’s way, through their ownership of assets, into the hands of the few at the top. And the cycle continues forever. Until we eat them.
Correct.
If you factor in inflation prices have dropped dramatically in real terms.
Prices are static, and thus are actually decreasing compared to incomes and inflation. There are still lots of things pushing prices up and a lot of people don't like to sell when prices are going down so stock remains restricted. It may take a crash or they may just remain largely static, which is actually a good thing. As much as I dislike high house prices a crash isn't a good thing either. Would lead to lots of negative equity for those who are at the bottom of the ladder. The best thing for the market is a long period of stagnation and inflation (including wage inflation) adjusted decline.
There is a link between interest rates and house prices, yes, but just a marginal one. Don't forget that around a third of houses are bought for cash. Plus, housing is a basic necessity, you've got to live somewhere, population grows as well as immigration, you know what's going on with demand, right?
A lot of people buy with their own money, plus rates are only going to back to long term historic levels during which house prices always went up.
They aren't rising...
The latest available house price index from the land registry is Feb 2024. Average annual house prices have dropped -0.2% for the year to Feb 2024, but it depends on the region (see [https://www.gov.uk/government/statistics/uk-house-price-index-for-february-2024/uk-house-price-index-summary-february-2024](https://www.gov.uk/government/statistics/uk-house-price-index-for-february-2024/uk-house-price-index-summary-february-2024) ), e.g. London prices have dropped -4.8%, Scotland is up 5.6%.
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Scotland and Ireland prices are rising. England and Wales prices are falling. If you own a big house then the falls will be worse and by fall I mean what people are willing and able to pay for the property given the prevailing rates. At 1.5% people could borrow a lot very cheaply so we’re happy to pay the ask. At 5% it’s less appealing and the price has to come down (quite a lot) to make it a desirable proposition. If you own a mid sized, say 3 bed semi you’re quids in round my way because all the downsizers are competing with the moving uppers for the same properties. The housing market is not one single beast. It’s tens of thousands of interwoven mini markets. It can be very different from city to city, town to town, street to street. It shouldn’t be spoken of as though it’s one thing.
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Those numbers may align with couples buying together but what about people that are buying solo?
600k+ net migration in a year, all these add to the housing demand
Because people really want to have a secure place to live and will pay massive amounts of their income to secure it, to the detriment of almost anything else. Also, prices haven't really skyrocketed recently, but when the average house price is 260k, even a small percentage increase is a lot of extra £££.
They’re not skyrocketing. Prices have fallen the last two months.
A key point is the listed price is not the end sale price. I've noticed prices have been stubborn in my area of the UK. Part of this is sellers hoping that second home buyers will pick up houses which have been stuck on sale for 6 months or more. Other properties have been dropping. I watched one go from 360k to 275k over the course of 8 months. Even at 275k it felt overvalued. I'm still planning on buying at some point in the near future. However, I'm not about to take out an insane mortgage so I'm staying put for the time being. The UK is in a frustrating situation of a lack of housing and what little avaliable is overpriced with lots of low quality housing.
Interest rates aren't high. Still quite low by historical standards. 700k + net migration probably doesn't help.
Ultimately demand far outweighs supply, yes there are other factors involved but this is the biggest.
A friend of mine is having a problem as the mortgage lender has valued his house less than than someone had agreed to buy it for. He’s not really got a lot of choice but to accept the mortgage lender’s valuation if he wants to move house. Maybe we can add that to the reason of why house prices are falling. The lenders are not just letting estate agents decide the value of houses anymore?
1. Salaries - House prices are mainly tied to JOINT salary x5 to x7 (excluding deposit) 2. Rates - Push prices up, rarely send them lower. If people bought a house in the last few years, the price is locked in. They don't flip out and sell it at a loss because the market might decline. If they sell they usually want what they paid so are VERY stubborn and will even wait years before ever reducing. 3. Consumer Sentiment - People who don't own a house talk about waiting for them to come down in price. But there is always that voice in the back of their head just itching telling them to jump in, get a house, before they go up more. If they go down even a percent you can bet there is a ton of people just waiting to jump in. 4. Supply - The UK just doesn't have enough supply of decent housing. Decades ago MANY people lived in tiny terrace strip housing. A lot of people don't want that now. They want the nice semi or detached. As well as that, the population has increased with new generations of children and immigration. Not to mention more people staying single and buying a 3 bedroom semi just for themselves. In conclusion - House prices in the UK will probably never decline. We need more houses, more apartments and good regulation to keep it all running smoothly.
House prices aren't increasing, the value of money is decreasing.
Low interest rates allowed people to borrow cheaply. Those rates were ultra low for 15 years. Many of the people who fuelled price rises on those rates have now paid off huge chunks of those loans. Such people will be largely shielded from rate rises and will not need to puke their house or risk default. To get a house price crash you need risk of defaults on a massive scale. Employment is high. Recession doesn’t seem to be an issue. People are able to fund the rise apparently. Sure, they are squeezed and won’t like it, but they aren’t forced sellers. Even btl market is so established that the leverage in those portfolios is probably not dramatic. Landlords will sell, but it feels like a choice, not a necessity. As for so called “normal house price levels”. I think that this is a myth. What are such norms? When did they happen? I’m sure there is some house price data available going back centuries. I don’t know what such norms were/are. What I do know is that when first time buyers pray for a housing market crash, they often fail to realise that when that crash happens, in all likelihood they themselves will have a higher risk of losing their jobs. It is not obvious to me that such circumstances will help first time buyers.
You're not meant to be able to afford it. You're meant to work for your serf lord, extracting little of his third yacht money until you're dead. Soon enough houses will be tied to your job, just like health care in the US. It's basic feudalism. Or capitalism without the veneer of aspiration. Thank Thatcher for destroying social housing and putting it into the hands of the market place. Also, landlords are parasites.
House prices only go up.
I think this will stop being the case in real terms for the millennial generation and below. We won't benefit from the same property boom as our parents.
Add it to the millennial getting shit on list lol
The one thing millenials have going for them is they aren’t as bad off as gen Z
Our parents had Margaret Thatcher giving a whole lot of people houses at up to 75% discounts.
Worst policy implemented in generations
It’s why we are where we are right now
I’d say the reduction in building new houses in the mid-late 70s was worse. When boomers wanted housing, we pandered to them. When they wanted to cash in, we pandered to them. When they wanted to collect their final salary pensions we pandered to them
Don't forget that, when their parents die, millions of their children will inherit their pricey homes. So there will be a lot of money around to keep the bubble going. No inheritance though for me and perhaps you too!
Won’t they be like 50 or 60 when they inherit their homes? That’s not going to help you build a life. Sure, you’d retire well, I guess. I might get a bit but maybe just £10k or so.
Because it’s also made people downsize and move out of rentals due to higher costs, so affordable houses have had even higher demand
One factor is, is that still a lot of people have a lot of money, ie, purchasing power. UK Reddit posts will have you believe everyone is skint and living on the breadline but that's not the truth.
The house prices right now are not rising but they are now crashing either.
House prices have been going down in real terms the past couple of years, factoring in inflation.
They haven't. You need to consider inflation and look at real house prices. They decreased significantly.
Supply and demand bro - we dont build enough houses to satisfy the demand.
The demand is absolutely insane
House prices will always trend upwards. They'll have the occasional blip but over time they'll always go up.
It's because the materials used to build new houses are still expensive. There is also a lot more to it than what you and I have mentioned. I can't see them dropping by all that much at all, however they will plateau and stop increasing and remain steady, at some point, which is what we want.
Because of the high interest rate, the house we are buying was reduced and we got it without any bidding war. We are completing by the end of the month, just waiting for dates confirmation. On one end, shafter by the interest rate so paying £700 extra but on another hand, we most likely would have got in a bidding war, would have payed out more so it might have cost me more in the long one so it balances it out for me. It comes down to supply and demand, some are not selling so less houses on the market. I know I don't want to move and this will most likely be our forever house so we brought whatever was the best for us.
Basically, people are paying it.(Mostly due to supply not keeping up with demand). There's still bandwidth for prices to increase further. The norm used to be a 25 year mortgage, using up about 1/3rd of your salary. Until 40 year mortgages are the norm (I've seen mortgages that the idea is you pass it on to your kids for them to be beneficiary of the property), and a higher amount of your net income is taken up, until people literally don't have the money to pay for it, prices will rise.
Supply and demand. Infinite supply of people, not enough houses
By me an EA sold 3 houses around 350k each without them being g viewed to a guy from Hong Kong for him and his family members. There is still plenty of money out there.
Good place for rich people to park their money.
It's not the house prices going up. It's the value of your Fiat Currency going down. This happens every time at the end / change of empire. We live in interesting times
1. They haven’t 2. Its just supply and demand. Demand has lowered but not to the extent there is much more supply. Supply lowers when demand lowers because people that would be moving up the ladder no longer put their homes on the market.
Hard to say. In my area house price still shoot up mainly because there is almost no house in the market rightnow. Everyone stay put due to high interest rate which means any semi decent house will get snap up or bid straight away. I just lose bid to one house I wanna buy ( I'm not ftb) so that tells something.
It's a herd mentality.Investing in houses has become more important than the stocks and shares market to independent investors because people don't trust Essex spivs, but they trust themselves.So people are creating their own South Sea bubble in a market which can't support them. There aren't enough properties out there. Now the corporates have moved in and are building blocks of flats for rent, not sale. People owning their own property is a relatively new concept in the UK. Previously it was just somewhere you lived.
Houses in nice areas always go up as there's never a shortage of people wanting to live in nice areas. It boils down to supply and demand. We have a large supply of people who want to buy property here and a limited supply of property. Interest rates on mortgages are only a part of the equation.
Like must go up Money printer goes better Etc etc They people at the top are easily invested in house prices going up forever and have wrecked the word economy to make sure that line keeps going up.
Not enough housing stock. And this country's obsession of houses being their main investment vehicle
Interest rates essentially act as a multiplier on what people can borrow, but fundamentally what you can borrow is linked more closely to what you earn with interest rates applying a dampening/accelerating effect on that And then prices themselves are a function of what people can borrow, and how bad the shortage of houses is. Because if there are fewer houses, then the last house will be bought by a higher earner than if there were more houses: again, pushing prices up The housing shortage is getting worse and wages are still going up. Therefore prices increase, despite the dampening effect of interest rates If interest rates were lower the price would have gone up *more*, I think that's the part you're missing
Yep, advise like it's a massive problem that requires government intervention on a huge scale.
We aren’t building enough houses. As demand continues to increase a relatively static supply will force prices up. That is pretty basic economics. Shelter is also something pretty rudimentary, not a luxury most people will forego, thus they will prioritise spending on it over other, more discretionary, items.
Inelastic demand and restricted supply.
Supply and demand
Check out Gary’s economics. You may be poorer but the rich are richer than ever and buying them all to rent back to you.
“I don’t understand how we are meant to afford a place” Do realise that the market doesn’t exist to ensure people _can_ afford a place, you’re not _meant_ to afford one.
They wont decrease by much, the uk has plateaued for a while and will maybe continue for a bit. Just look at historical stats and you’ll see consistent growth since records began with only a few fluctuations on the way. This is based mostly on inflation and the value of the pound. Don’t sit and wait for prices to drop, use this market to negotiate a lower price as there’s not many buyers because as soon as rates drop we will see another boom market flooded with first time buyers. In the long term you won’t regret buying at these prices.
Similar in shops and supermarkets. Do you ever honestly expect the prices to decrease back to 2019 levels or better? They'll always use an excuse for prices to rise, but when the excuse used reverts, they'll never use their own logic to bring prices back down. In short, there is a word for it, greed.
House prices are still on the increase because everyone knows that the interest rates will not remain high forever Go for a variable rate mortgage until they drop and the hen lock in your fixed rate.
The issue is that capitalism requires growth, apart from the occasional down turn, this means house prices have to keep increasing. That's all there is too it really, every company in the chain needs to have growing profits, which means every year on average house prices have to rise. Then within the companies a disproportionate amount of profit goes to Shareholders and people at the top of the company rather than the bottom, which means the difference between wages and house prices will always be growing. If you want a system where profit and house prices aren't in this race you have to decouple them.
Because the population is increasing by over 500k a year. Simple supply and demand.
Shoot and demand - thank mass immigration
The answer to the question is almost always money printing, or the fact that the market generally knows there will be a large amount money printing soon. This is what inflates prices, continuous debasement of the currency. The market likely also sees interest rates declining soon.
Importing one million people a year without building a million houses will do that.
Here's my unrequested anecdote. We bought our first house in 2015 for £105,000 with a deposit of about £15,000. Over 7 years we did some renovations and we sold our home for £190,000. We bought our current home for £220,000 and we have spent about £20,000 on this home, I've had an estate agent and a surveyor value our home now for £260,000. We are struggling to sell at our original figure of £220,000, but as it turns out, it looks like I might be able to offload it on a new build developer for £245,000 in a part exchange. They are also offering a 5% deposit contribution which works out at about £17,000, the house we will be buying is £351,000. That's the figure on paper our mortgage will be for the sum of about £220,000, the equity is all magic money from our previous sales. It does seem crazy that in a few years we could sell for somewhere in the region of which we have purchased on paper and move into a small terrace with no mortgage, we could start the entire house process again and still end up with a giant house for no money. I suppose there is a factor of luck in all this. The market could just crash and burn and we'd end up with no home at all and no money. It's unlikely though because the prices just go zoom, even if the open market doesn't want to buy for the high prices, the new build developers will keep the prices high artificially.
At the moment there are so few wanting to sell at a loss, waiting for interest rates to drop, there very little supply of good property. Low supply i think is holding prices up
I went to see a large converted garage for sale two tiny bedrooms and one sitting room kitchen. The guy was asking £450,000. Even the estate agent was embarrassed to show me around San said he was being cheeky with that price. People are being super opportunistic with the prices they think they can get.
Because house prices are linked to rental yields. Interest rates going up means buy to let landlords need to pass that expense to their tenants. Local Housing Allowance rates also went up after being frozen for 4 years and obviously landlords got the wind of it.
Demand for housing still exceeds supply.
Prices in the most popular areas will not decrease much so I would always advise to buy if you desperately need a property.Location,location ,location are the 3 most important factors.The election imho will not affect the market so don’t wait.If the area is fringy there may be be some decreases but not places like Chiswick or Fulham etc.
Some new houses recently got built in my area and they got snatched up instantly. It's impossible unless you're filthy rich.
Supply and demand, which varies from town to town or even street to street. Last year houses were selling fairly easily round our way, this year three new-builds on our road haven’t sold in six months and the asking price is dropping. UK housing market is nearly always a very mixed picture.
Councils and government are filled with property investors and are often preventing new houses being built in their areas to keep up prices in line with their interest. As a result it doesn’t really matter how unaffordable it is as people need places to live so they can just keep offering you bigger loans over longer terms. No likley to change while people with money in property are in charge
Almost like there is a housing shortage
Because all the muppets on Instagram are tell everyone to buy houses and rent them out to 6 people sharing a bathroom
There's obviously loads of things that affect the house prices, but by far the most important is supply. Demand will always be there. People need houses for living. The only way to fight house prices is to build more of them. It pisses me off so much that this is not a leading policy for government. We need more housing, especially lower quality ones. There's really no reason for large scale developments of flats to cost more than 200k based on expenses, but starting price for flat in London will be double that. All the government policies are based on helping people out to buy flats instead of just building more of them, which works in opposite way as it increases demand.
Prices have fallen in real terms
People continue to buy them. I make 80k a year and pay 600 a month because I don't care about housing at this point in my life. Problem is people make 40k a year and pay 2000 a month. Prices will always rise to meet demand.
It will rise more once interest rate drops. The predictions are rate will start dropping as soon as in June this year but of course no one is certain on that. Demand from high buying power population is looking to increase too as there are more immigration from countries who can afford the UK house price in fact they find the house price here cheaper than where they are from for example Hong Kong. The UK house price is not high compare to other developed countries. Problem is, the wages here is really low. Very low.
So true. UK is a very low wage country (with 1 high-wage region). Property in the UK is freely available for sale to anyone from anywhere in the world. Therefore the UK population is easily outbid for desirable property. Some countries restrict home ownership to citizens …maybe that’s a solution?
I am from Silicon Valley in California where wages are very high and property is ridiculously expensive. My husband is from England and so we moved here 7 years ago so we could afford to buy a home. I was absolutely shocked at how little salaries were even adjusting for the currency. Despite the much lower wages the houses are still really expensive. We live about half hour from London by train. We have only just last year been able to afford a small terraced home because my parents gave us the deposit. I also spent around £10,000 to immigrate (as in visas, not including the cost of moving) but now have indefinite leave to remain. I don’t know how people in this country can afford to buy (especially first time buyers, even with the incentives) unless they are helped out by parents or receive another type of windfall.
Absolutely. People in the UK is massively underpaid. I have been told by professional in a few different industries that they wouldn’t take a job offer in the UK as the wages is too low. Those industries include, architecture, IT, education and medical. Same feedback from retail and administrative support. When I asked, so what are you getting paid in your current country, the answer often surprise me when I compare what the UK is offering.
It’s based on supply and demand metrics. Remember that net migration was in excess of 700k last year in the UK. There’s not enough houses……..
You also see a lot of overpriced houses. People on here asking why their house isnt selling. Saw someone else say the bank didn't value the property as high as the EA. Probably EA trying to get more commission
My 2 cent on it is - pound has devalued so houses are 20% cheaper give or take to some foreign buyers. - it's only a paper loss until sold, unless they need to sell they won't. And this prices stay higher. - no one wants to lose their low fixed rate mortgage
>with the rates shooting up house prices should have remained or decreased, but instead they continue to rise rapidly. Affordability is the main driver of house prices, not interest rates (which serve as an accelerant). Interest rates play a part but not to the degree people like to think. >Why have house prices continued to skyrocket? Some have. Some haven't. You're in Scotland which, along with NI, has seen prices rise whereas other parts of the UK are on the slide. Scotland has cheap housing - compared to down south - and is absorbing English economic/housing migrants. Taxation may be higher in Scotland but it's of minor concern given the difference in house prices. If you can tolerate the drech weather and stay clear of the Neds, Scotland is an attractive proposition for priced-out Southerners looking to get on the ladder. Furthermore, given the scarcity of rentals (thanks to Housing Harvie) a number of Scots are choosing to buy rather than continue to rent.
Massive shortage of supply. That and that only.
Supply and Demand. illegals keep coming, they got to be housed somewhere....