[Closed] The inexorable rise in house prices is like a fedual system

Fedual? Do you mean Feudal?

Always best to get the basics correct before posting an essay of pseudo intellect.

I grew up in a poor area in Stoke and went to one of the lowest performing schools in England. Zero financial help from parents with anything.

I've managed to buy a house in Cheshire in an area where prices are essentially bang on the national average. It was hard, but is definitely doable.

Fedual? Do you mean Feudal?

Always best to get the basics correct before posting an essay of pseudo intellect.

Ooh, aren't you clever, you spotted a spelling mistake.

I own a house (just the one, mortgaged). As a socialist I'd much rather it hovered in value so everyone else including my kids could also have some foundation in their economic lives.

House prices are utterly unaffordable

Move to Frizington

House prices weren't that affordable 22 years ago when terraced houses were 8 times my salary.

OP, you're kind of right, but plenty of people without wealthy parents can and are still managing to buy houses or flats.

Here's a one-bed flat in London near where my sister has recently bought that is not ludicrously unaffordable by SE standards: https://www.rightmove.co.uk/properties/111294995#/?channel=RES_BUY

And here is a three bed semi close to where I live now that you'd be hard pressed to describe as unaffordable: https://www.rightmove.co.uk/properties/119268188#/?channel=RES_BUY

(I'm not saying £200k for a tiny one bed is reasonable, or vouching for the quality of those properties by the way, they're just the first ones that came up on Rightmove when I searched for those areas).

usually someone will suggest a "house price correction". Magically they always fall into one of two categories.

Either they are mortgage free or nearly so, so are willing to take a theoretical hit as long as all their peers do too - and it will benefit their teenage children.

Or they are a renter and want everyone richer than them to face financial ruin so they can buy a house. Because even in this magical utopia where housing cost is literally the price of the bricks and mortar its built of; home ownership will still be aspirational and a marker of success...

It's hard to imagine my kids will ever be able to buy a place in our home town if things continue.

I bought a 3 bed semi 7 years ago, the price was £225k. Last week my next door neighbour sold a virtually identical house for over £400K. In the same period my wages have only gone up about 20%.

We can argue what is and isn't affordable but I pay £500 mortgage on a house twice the size of my best mate's £800 rented house. How the hell does he get a deposit together when he's paying that in rent?

I only managed to buy mine because I got a 100% mortgage 5 years ago. I've since changed jobs and now would be able to buy one but if I was still stuck in that £18k job there is absolutely no way I would ever have been able to buy a house, short of moving into my car for a couple years

I got the better job through studying while working, in theory anyone could do that but in practice it's not always the case. Alot of people could do a lot more to help themselves but that's a hard argument to make when I know a load of other people my age (30ish) who have had their parents put deposits down for them, just because they had the blind luck of dropping out of a richer hole than me and my mate did.

So it's hard to tell someone less motivated than me to spend 6 years of all their free time and money on the hope of getting a degree and a better job so that maybe they can own somewhere to live

System is terribly broken, only answer I can see is to stop houses being used as money-making tools for the rich and instead used as places for people to live. Not sure how that can happen though

Supply and demand. UK population has increased by around 8 million in the last 20 years. They need to live somehwhere. I don't think houses builds have kept pace.

I agree that the housing market is dreadful but don't confuse social mobility with the changing structure of occupations. Whilst more kids from manual backgrounds were going into white collar/'professiomnal' jobs in the 70s and 80s those jobs were being down-graded, increasingly micromanaged and there has been an over-supply of graduates. Politicians love to go on about social mobility but refuse to address the real issue which is inequality. The first think Starmer did in the lockdown was to come out and defend bankers and landlords against mortgagees and renters and now delivers platitudes about security, respect and all sorts of other flowery nonsense. Housing is just as much a part of class conflict as the workplace and the community.

Average price of UK housing stock is now £270,000 meaning you'll need around £20k for a deposit, conveyancing and moving costs.
Median UK household invome is just shy of £30k pa
That makes the average house price nine times your median income.
Intereest rates are low currently but inflation is running at 5.1%; 6% interest rates are something like a long run average over the last 30 years so a return to that level isn't so far fetched, especially given what inflation is doing.
Let's say you are able borrow £256k at 4% average over 25 years; that makes your monthly repayments £1355 per month. On a median income of £30k, with £300 a month set aside for pension, that makes your take home salary £1765 a month meaning your mortgage is 77% of your take home.

Clearly something is propping up the price of houses and clearly there are still a lot of first time buyers able to get on the housing ladder. My point (other than not being able to correctly type 'feudal') is this:

For the love of god why is this clearly unsustainable position not the thing we are protesting about? It is so obvious that this is the single biggest problem we face if what we want is a more equal society and yet no one makes that connection - this is where it looks a lot like a feudal system and I only use that reference to throw the issue into sharp relief.

3 years working ridiculous hours in dangerous conditions on the deck of a boat saw me save enough for deposit on first house. Before that I was renting.
I know plenty of people buying houses in the past 12 months.
Seems to be a complete unwillingness by friends children to buy a shabby house and plod on doing it up, they want all the bells and whistles immediately.
Does you friend say she's one of the most respected or does everyone else. On that statement she has nothing new to say. Tell her to get a second job and start saving.

There’s definitely been another jump recently, but it seems these have been coming every few years since the early seventies. Our street has just had it’s first half million house go up for sale last week, so it will be interesting to see if it sells quick, and for how much. However, if I walk a couple of hundred yards I can get a terrace for under £100k.

Here in Doncaster, it seems like the land area under housing looks to be close to doubling in the 30 years since I arrived, and seemingly no real shortage of buyers yet. (Anyone know where to look for the figures on that?) YES, prices of houses have tripled in that time, but have you bought a Freddo recently?

Politicians love to go on about social mobility but refuse to address the real issue which is inequality.

They're the same thing, the only thing we haven't really called out is what really causes it. This is where my demographer friend proved useful as she pointed out that the real cause of inequality is poverty; if you're born poor, you remain poor.

When you look at the cohort studies, which she has in some detail for her PhD, you find that when you account for all other variables, the only variable which correlates with life outcome is your relative starting point for wealth. Social mobility does get talked about but it's not addressed in the correct terms (at least as far as the data is telling us).

My friend (she really does exist btw but clearly I am not going to say anything more about her than this!) commented that in policy meetings with cabinet ministers, no one ever wants to address the real underlying causes, or correct other misaprehensions as to what 'inequality' is about, because to do so is political suicide on multiple levels.

For as long as the narative stays like it is, we will continue to slide into increasing levels of haves and have nots. I'm can't be the only one who thinks that's not a great outcome?

House prices in the UK are very localised - I am sorry if that is stating the obvious. You won't be paying 8 times your salary in Newcastle or Glasgow.

When our parents bought houses in the not so distant past, they sacrificed everything to buy the house. These days, everyone appears to expect to get on the housing ladder whilst still paying £x hundred pounds a month for an overpriced Germanic car, £x per month for the latest mobile phone, eating out  and whilst also still going on multiple holidays per year (ignoring COVID for a second).

Many people would be able to afford to get on the housing ladder if they were willing to make the sacrifices that used to be made.

Not the answer to the overall issue of house price growth, but an aspect overlooked in my opinion as to the real affordability of getting on the housing ladder

I’m sure we can all (ok many of us) tell a tale of someone who scrimped and saved and did good.

Meanwhile, bins need emptied, shelves don’t stack themselves. Children need to be taught. Etc etc. The people doing these jobs need to live somewhere. Where do you suggest?

House prices are utterly unaffordable

No they are not, people would not be buying them if they were!

I'm not saying house prices are unaffordable for some people, they are, and proper social housing needs to be in place to ensure everyone has a roof over their head at the end of the day.

I don't normally seem to agree with the OP on much but I'm not sure why everyone is jumping on them. Just because it's technically possible to buy houses without help doesn't mean the problem isn't real.

Many people would be able to afford to get on the housing ladder if they were willing to make the sacrifices that used to be made.

I believe this is a common myth. It's more like many people are PCPing German cars etc because they know they will never get on the housing ladder. I know boomers like to think everyone could afford a house if they just ate less avocadoes but the maths doesn't work out for most young people.

Social mobility hasn’t just ground to a halt in the last 30 years, it’s gone into reverse.

Indeed.

House prices are utterly unaffordable (today it was annoucned they increased by 11.2% over the last year

Bid 12% over the asking yesterday - was told by the agent the winning bid was SUBSTANTIALLY higher. So, what's that 20%? Yep, house prices do seem crazy...

For the love of god why is this clearly unsustainable position not the thing we are protesting about?

Cos I've got a massive vested interest in it, you silly goose.

But yeah bonkers. And all the pull yourself by the boostrappers on here will (as a generality - outliers will occur, endowment mortgagees for example) have had it easier than those doing it now, fo sho.

Also, my anecdotal evidence from what I've seen suggests 90% of people who say they've bought a house with zero help have actually had a non-zero amount of help.

Everyone loves to pretend they're self-made, it's largely bollocks.

No they are not, people would not be buying them if they were!

I'm sorry I didn't explain myself well initially.

House prices have to be affordable in order to explain the continued rise in them. That is obvious. My point isn't that house prices are not affordable period, it is that they are increasingly only affordable for an increasingly small percentage of the population.

This is why I descibed it as being like a 'feudal system'; as the stock is concentrated into a smaller number of hands, the rest of the population becomes bound to those landlords paying rent which never gets cheaper (unlike mortgages over time) and which never allows them to accumulate wealth. It's a form of servitude (a bit like zero hours contracts).

I regard myself as a capitalist albeit one which, like George Soros states in Open Society, strongly believes in better regulation to ensure markets act both ethically and effeciently, so this isn't me arguing from a Marxist perspective, far from it. It's entirely apolitical not least because neither political party seems interested in addressing it.

comparisons with a feudal system are really not helpful

this is the result of deliberate tory policy over decades.  Its a con so homeowners feel wealthy when house prices go up.  Its just another mechanism for concentrating wealth in the hands of the wealthy which is the main purpose of the tory party

We have a weird obsession with house ownership in the UK.  Most european countries have a good solid system for house rentals providing good quality secure rentals at affordable prices.  Our rental sector is so badly skewed in favour of landlords.  any discussion of housing needs to look at this as well.  We have much lower % of folk renting than in other countries.  renting is seen as a good thing for many folk europe wide as they get a secure house at a state controlled ( often) price but do not have to worry about repair bills

Let’s say you are able borrow £256k at 4% average over 25 years; that makes your monthly repayments £1355 per month. On a median income of £30k, with £300 a month set aside for pension, that makes your take home salary £1765 a month meaning your mortgage is 77% of your take home.

there's a few problems with your figures here

1) the average household income does not need to afford the average house. A lot of people (ie those on minimum wage) have housing supported by the state. Maybe that shouldn't be the case, but it is, and its never been the case that the 'average income' buys the average house.

2) the median income includes (as far as I can tell) retired people. That pushes the number down artificially

3) most people don't move into their lifetime house in one go. they build up their deposit with a smaller flat, costing maybe 60% of the average house.

4) average mortgage interest rates aren't 4%

5) you can split your mortgage over 35 years pretty easily

so if we even take the average income (30k), if they're financing 70% of that average house (because they built up the other 30% by buying a flat 10 years ago, and paying some of it off/riding the inflationary wave), that's £180k. over 35 years, with a 10 year fix (to hedge risks) at 2% (better rates are available) you're left with mortgage payments of £600 a month. Perfectly affordable.

I'm not arguing prices aren't high, but outside the south east and a couple of other hotspots their still surprisingly affordable.

Average price of UK housing stock is now £270,000 meaning you’ll need around £20k for a deposit, conveyancing and moving costs.

Trouble with averages is they are skewed massively towards the south-east. There's loads of houses in my area (East Midlands, north of Derby) for £140k or less. Not on shit slum estates either.

House prices are silly. Every generation is getting more and more screwed unless the beneficiary of a inheritance or gift. High house prices drive all kinds of social ill. The solution is 100% inheritance tax and increased house building - we're hardly running out of space.

Average price of UK housing stock is now £270,000 meaning you’ll need around £20k for a deposit, conveyancing and moving costs.

Please bear in mind that the government will pay 25% of all first time buyers deposit through the Lifetime ISA scheme - Save £4k per year, gov't give you £1k bonus. So circa over 3 years at max contributions to get the full deposit assuming buying solo. Even faster if buying as a couple and can both save max contributions each year.

There are also a number of other schemes for first time buyers available.

It's the same in many places. Ultimately, it's a supply and demand thing. Wealthy people want to live in nice places. If there's a constraint on supply of new housing, prices in those areas will skyrocket. San Francisco is a perfect example. There is a lot of tech industry money there but very strict zoning laws that make it impossible to increase the stock of housing to meet the demand (by knocking down old houses and building blocks of apartments, basically). The existing homeowners benefit from the supply constraint through skyrocketing prices so they have no incentive to vote to ease the zoning laws. Unless you can build enough houses to meet demand, prices will rise until supply and demand are balanced.

Stop comparing average property prices with average UK wages. You need to look at specific areas. There is a reason why so many people commute into cities to work and live further out.

Housing is affordable if you look around. It is possible to save up a deposit if you plan ahead and dont spend all your earnings on things you don't need. It sounds like too many people are wanting to rent in expensive locations then struggle to save money for a deposit. It's also lifestyle. My students (16 - 18) complain they have no money but spend loads on Phones, TV subscriptions, Games, other monthly subscriptions. They have no desire to save like I did at their age.

Definitely depends where you live

https://www.rightmove.co.uk/properties/118966412?utm_campaign=property-details&utm_content=buying&utm_medium=sharing&utm_source=copytoclipboard#/&channel=RES_BUY

there’s a few problems with your figures here

All duly noted and accepted and I welcome your corrections. Thank you.

but outside the south east and a couple of other hotspots their still surprisingly affordable

and other comments to this effect:

Yes, good point and also noted and accepted. I guess there is one caveat though which is that whilst house prices will be much lower in many parts of the UK, so will wages/salaries. I don't know by how much though.

comparisons with a feudal system are really not helpful

Not sure why but I think we can both agree that the problem exists broadly as I've laid it out?

I really don't see this as a party political issue though, at least not outside of a Corbyn led Labour Party (if he had won the election I genuinely feel he would have done something to directly address the issue).

Labour did exceptionally well with house prices also going up and I think it's in their own interests as well for that to continue. They cannot win an election without a large swathe of the very people you highlight in your post TJ (relatively wealthy home owners) voting for them, which is how Labour won in '97 and subsequent election years.

Argh.. no no no!

I’ve managed to buy a house in Cheshire in an area where prices are essentially bang on the national average. It was hard, but is definitely doable.

OP, you’re kind of right, but plenty of people without wealthy parents can and are still managing to buy houses or flats.

This is a massive fallacy. Just because SOME people can afford houses without privilege doesn't mean it's affordable. SOME people can row the atlantic, some people can win bike races with no arms and one leg. These people are exceptional, they don't prove anything. Saying "well I did it why can't you?" is just a way of blaming people and it's incredibly corrosive.

You shouldn't need to be exceptional or even remotely above average to work your way out of a bad start in life. The fact is that owning houses and having a secure life is very very easy for some people, and hard for others. This is privilege.

Life shouldn't be hard.

Wow, I was going to reply to the OP to say what a load of horseshit the following is:

I thought I’d share this perspective because it’s useful to acknowledge something that is genuinely crippling social equality but which is NEVER discussed or acknowledged.

because in my wiew it was pretty much universally known and acknowledged.

Then I read with surprise and horror many of the replies which do indeed seem to suggest the OP is correct that many people don't acknowledge it.

Rather we've got the usual crap about how "I managed it so so can everyone else." "I didn't have a pot to piss in but purely and simply through my own hard graft" etc etc

And as for this comment:

but outside the south east and a couple of other hotspots their still surprisingly affordable.

South West 'burbs of Manchester. People selling their house to be knocked down and replaced by 2 houses priced at £1.4 million each. That doesn't strike me as affordable at all.

We have a weird obsession with house ownership in the UK. Most european countries have a good solid system for house rentals providing good quality secure rentals at affordable prices.

They do, but this is not good. Widespread house ownership is fetishised by Tories, yes, but it's actually a social policy. If everyone rents, who owns those houses? Who gets to live rent-free after retirement with a considerable nest-egg? Who gets to control property supply? Who ends up with all the assets and capital?

Very low interest rates & quantative easing meant that the rich got richer and the trickle down never really happened & being poor is an expensive business, the least a just society should be able to provide is decent affordable housing for those less well off, rather than line the pockets or pensions of the wealthier. Selling off and continuing to sell off councils houses means that local authorities can't easily provide good new accommodation because they know in a few years down the line it will be bought up by tennants/sold on to private landlords.

Well said molgrips

So what do we need to compare here. Average number of houses owned per head of population over the last 50 years?

Would that give us any real data to draw a conclusion? The suggestion is that figure has increased over the years and that is unsustainable? (which I would agree given we live on an island with a finite amount of space for building houses)

So lets make a start on the mega cities!? Or are all the rich people just going to go an live in space (Elysium?) to leave more space.

Well to reply to that Molgrips all I'd say is that it wasn't really THAT hard.....but even when I bought my first house back in 2012, people I knew had £60 a month gym memberships, the latest iPhone on a £50 a month contract and two expensive cars on finance.....and staffed a load on a big wedding.

I didn't, thus was able to afford to buy a house.

I get that it is dependant on area, and i got on the market in a particularly cheap area, but this whole notion that it is hard is total mince imo. It is hard if you make certain lifestyle choices, but they are very much choices rather than necessities much of the time.

I'm saying this as a Corbyn voter btw, not some right wing uber capitalist. Maybe it is hard and I just found it easy, but I'm not convinced. My best mate is a teacher and has managed just fine to own a house above the national average price....again, he is very good with money.

I purchased my first house during the help to buy scheme (not using the scheme) and I remember people my age complaining about prices, while at the same time refusing to buy in 'bad' areas and spending money on other expenses. I was able to buy a first house (near London) to jump on the ladder for significantly less than the average price of a flat, while on an average income. I was prepared to compromise and also sold all my valuables to do it (which was of course my bikes)! I think people's expectations are unreasonable, and this limits them.

So lets make a start on the mega cities!? Or are all the rich people just going to go an live in space (Elysium?) to leave more space.

There's quite a lot of real estate (as in acres of land) occupied or quite often not actually occupied very often by the mega wealthy and only about 5% of UK land is built on at present.

Some interesting data here, rather than opinion.

Interesting to note the increase in house price to earnings, the drop in first time buyers etc.

Houses are currently affordable because of silly low interest rates - not because of increased wages or reasonable house pricing. See the graph on this. A rise this next year or two of next back to rates of a few percent could cause many borrowers to crumple...

https://www.economicshelp.org/blog/5568/housing/uk-house-price-affordability/

Many people would be able to afford to get on the housing ladder if they were willing to make the sacrifices that used to be made.

How long ago was this?

Note, I bought my first place in 1986.

Anyway, my middle son and his wife bought a new 3-bed semi in West Yorkshire early in 2021, about 10 miles from where his Mum and I bought our first place (also a new 3-bed semi) in 1989.

They've paid about 4 times what we did, but their monthly mortgage payment is near as dammit the same. They're earning about 3.5 times what we were at the time we bought.

Consequently they've got more disposable than we had, far more.