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I see that this thread has, somewhat predictably, attracted the usual tedious crew
I didn't get where I am today.... 🙄
It will always be like this as long as an 11% annual house price rise is one of the leading articles in the news, couched in the language of this somehow being a great thing? Though it never says why its apparently so bloody great!
Successive governments have simply used it as an indicator of the virility of the economy, in the absense of any actual real economic growth.
It isn't a positive economic thing! Its the polar opposite! Its an economic disaster for pretty much everyone who doesn't own a property portfolio (I'm aware this discounts a few people presently reading this, who are obviously all financial geniuses)
Meanwhile the percentage of the population owning their own homes steadily decreases year on year, but this is never reported at all. Nobody wants to talk about that, do they? Or the absolutely enormous cost to the taxpayer, for example, of subsidising the working poor living in poor-quality, private rented accommodation. Poor quality private rented accommodation that just happens to be owned by people lucky enough to have capital (and it is mainly luck!). Funny that, isn't it?
Just another case of billions and billions of public money being funnelled into the pockets of the rich and connected
In my area it's impossible to buy on an average wage for the area - average house price in my Gloucestershire postcode is over 540k last time I looked, and average rental cost for a 3xbed is around 1200pcm.
All of my friends and family have migrated away from the area, specifically for better value housing - all of them are middle class on above average wage. The working class either commute into the area for work, or live in houses owned by their employers at a discounted rate.
(For the record - 12% rise here, and a house closed yesterday we had shown interest in with 19 offers, and one was at least 25%/£75k over asking(!). The world is going mad.)
For the love of god why is this clearly unsustainable position not the thing we are protesting about?
Because it's extremely difficult to solve it.
Build millions of homes per year - don't have the resources let alone sorting out planning permission.
Devalue existing homes - massive -ve equity problem for recent buyers.
We've spent 25 years creating the current situation, it will take a long time to resolve it (assuming there was any political will to do so).
A wealth tax would be a good start...
+1 Binners, also see rise in average age of first time buyers as indication of it actually getting harder to buy.
Meanwhile the percentage of the population owning their own homes steadily decreases year on year
Interesting trend...
https://www.whatdatashows.com/home-ownership-versus-renting-past-100-years-england/
also see rise in average age of first time buyers as indication of it actually getting harder to buy.
also see an increase in age in people getting married, and having children.
all three things are often linked/related for various reasons.
are people doing these things later because they cant afford to do it earlier, or have life priorities changed for the younger generation?
Interesting trend…
That graph will only now head in one direction. This is a deliberate policy.
If you go into Manchester city centre then you'll see enormous amounts of construction.
85% of the new 'homes' being built are sold off-plan, mostly to foreign 'investors'. 85%!!!
So the building of 'homes' isn't doing anything to address the housing crisis - if anything it is deliberately designed to make it worse - they are being built specifically as ever-increasing piggy banks for people who possess large amounts of capital anyway. Manchester and Leeds have now replaced London as the 'best' investments, apparently. Brilliant!
If you want to see how completely ****ed and dysfunctional the whole thing is, how twisted and perverted the priorities of housing policy now are then watch Manctopia: Billion Pound Property Boom
An utterly depressing watch, summarised by the sight of social housing being demolished em-masse (and poorer residents literally booted out - to go where? Who knows? Who cares?) to make way for luxury developments to be sold in blocks to 'foreign investors'. But let's not look too closely at where that offshore money is coming from, eh kids?
So thats what is fuelling these enormous price increases. How on earth can that be anything but a complete disaster for all but a privileged minority?
As far as I can see the issue that nobody has mentioned is that if social mobility is linked to your parents' (and in turn their parents') wealth then the answer is to tax the transfer of that wealth and make sure those tax receipts are used in a manner which helps the mobility of others (e.g. building of state-owned affordable housing, investment in education, funding for internships etc. that help those from poorer backgrounds get a foot on the ladder).
Two obvious ways that parents / grand-parents give their kids a disproportionate advantage are: inheritance and private education. VAT on School fees, and significantly lowering the inheritance tax threshold (and closing IHT loopholes/planning) would go a long way towards removing the advantages it brings, and if spent wisely could "level up" those who don't get such luxuries through the fortunes of birth.
As far as I can see the issue that nobody has mentioned is that if social mobility is linked to your parents’ (and in turn their parents’) wealth then the answer is to tax the transfer of that wealth and make sure those tax receipts are used in a manner which helps the mobility of others (e.g. building of state-owned affordable housing, investment in education, funding for internships etc. that help those from poorer backgrounds get a foot on the ladder).
The irony being that every time inheritence tax is discussed, it's all the people stuck at the bottom of the ladder who are up in arms about it....
So lets make a start on the mega cities!?
You jest, but the fact we view this as a dystopia is part of the overall problem.
Every time we build a new David Willson moc Tudor semi on the greenbelt, that moves the commuter distance another 20-30m up the road. This means everyone in the house needs a car to drive past the other two and a half thousand identical houses on the estate to get into town to work.
Next time you drive in on an arterial route, look either side at the shops and their car parking. Just imagine how small and dense cities could be if we got rid of the need for cars by building upwards rather than outwards. I live a little over 6km from the center of Reading on the main arterial road, I reckon if you got rid of cars and thus the car parks along it, that would be more like 600m than 6000m.
85% of the new ‘homes’ being built are sold off-plan, mostly to foreign ‘investors’. 85%!!!
I’m sure it’s not, but that comes across quite UKIP-y. You got a Source for that?
I’m sure it’s not
Take it up with the BBC then.
Thats the figure quoted in the Mactopia documentary. A quick Google pulls this up
Who is really benefiting from the Manchester city centre housing boom?
This is from 2017 and describes how new developments are now marketed as 'investor only' so even if you were a first time buyer with the deposit and a mortgage sorted, they wouldn't actually sell a flat to you. They posed as a first time buyer in just such a situation and were refused. And that doesn't strike you as a totally ****ed dysfunctional system?
but that comes across quite UKIP-y
Eh? Why on earth is it UKIPy? Pointing out that our property market is fuelled by dodgy offshore money?
Care to talk me through that then?
I’m sure it’s not, but that comes across quite UKIP-y. You got a Source for that?
It was true of Manchester in the boom. Not sure it's still true after it bust.
There was a real problem (same in London) with foreign investors looking for low-risk investments. Tennants are risky, but with inflating house prices they could make decent profits simply by buying a flat and leaving it empty. Why put £200k in the stock market earning 5-8% when a flat in Manchester/London is increasing 10-15% p.a?
Next time you drive in on an arterial route, look either side at the shops and their car parking. Just imagine how small and dense cities could be if we got rid of the need for cars by building upwards rather than outwards. I live a little over 6km from the center of Reading on the main arterial road, I reckon if you got rid of cars and thus the car parks along it, that would be more like 600m than 6000m.
my first thought on reading this was: you've described Hong Kong (recent political ituation aside).
geography is partly the cause, but many Asian cities are as I understand it similar on the face of things.
is that the life I want? no
is that the life you want?
is that the life anybody wants? probably yes. but probably not everyone who lives there.
Tennants are risky, but with inflating house prices they could make decent profits simply by buying a flat and leaving it empty. Why put £200k in the stock market earning 5-8% when a flat in Manchester/London is increasing 10-15% p.a?
Much as I hate many of the proposed "solutions", a significant tax on vacant properties would help to alleviate this.
Much as I hate many of the proposed “solutions”, a significant tax on vacant properties would help to alleviate this.
[i]Owners of long-term empty homes in the Derbyshire Dales to be charged quadruple council tax[/i]
From the point of view of someone who owns and manages a few properties via my shares in a larger business which has owned a number of resi properties for a long time amongst other things:
1) Never cared about house prices as we just use the rent. Never plan to sell, so house price increase over purchase price is now not relevant. So I'd like to see them reduce in price by a huge amount. Yes that would probably cut my rental income by a huge amount but tough shit. Obvs I do not wish financial ruin on any other landlords but I would also like to see housing be more accessible to buy and rent.
2) A long term tenancy contract like the AST, maybe the ALT, where landlords only have a fasttrack recovery process if people are damaging/criminal, but no fast track if in arrears, unless it is really unmanagable. This would be better for me as a I have long term tenants and I want them to feel secure.
We also need a rental quality commission which enforces habitable standards.
I think if people had long term affordable tenancies then that would be a significant drag on house prices, as people could settle in rental and do not see ownership as investment, just purely a home they have secure tenancy over their lifetime. I'd be happy if tenancy was inheritable too. As long as their was fair rent increases in line with inflation, controlled by independant (from govt and industry) body like ONS maybe.
As a note our rents have lagged behind inflation since I have been involved. We increase rent only when changing tenant and use the RICS recommend increases which are an average of inflation and other stuff, we don't change tenants every year as they mostly want to stay, so we always lag.
House prices to wages
I was a junior charge nurse in 92 earning around £22000 a year. The flat I bought cost £47 000 ie less than 2.5 times my wages. I have improved the flat a lot adding maybe 20% to its value. A junior charge nurse now earns around £32000. So even if I take that 20% off the flat would cost £300 000+ which is around 9 times the wages. Now this is in an area thats been gentrified but even so thats absurd. If I were that junior charge nurse now I simply could not afford virtually anything in Edinburgh. Possibly a one bed ex council on some peripheral estate.
Another absurdity
Because I have two flats mortgage free and am old I could borrow against them interest only, buy another flat and rent it out and make several hundred pounds a month off it after paying the interest and I will get capital growth
Thats just wrong. A society set up to do this is unfair. Its a transfer of wealth from young to old and poor to rich.
The only real answer IMO is for the government to launch on a long term programme of house building and buying to rent. Like the council house building post war. Provide good affordable homes, reduce the private rented sector ( and control it) and thus take price pressure off the housebuying market.
Why on earth is it UKIPy? Pointing out that our property market is fuelled by dodgy offshore money?
You’ve basically just said foreigners coming over here, kicking our working classes (us) out of their (our) homes to build their mansions. Still makes a pleasant change from Schrödinger's immigrant stealing our jobs/benefits/wifes.
Also wot 5plus8 said.
I was a junior charge nurse in 92 earning around £22000 a year. The flat I bought cost £47 000 ie less than 2.5 times my wages. I have improved the flat a lot adding maybe 20% to its value. A junior charge nurse now earns around £32000. So even if I take that 20% off the flat would cost £300 000+ which is around 9 times the wage
This in reality shows how wages have not increased in line with inflation, and how inflation calc is innacurrate.
22k in 92 is £48,445.10 in 2021 Inflation averaged 2.8% a year.
So your flat should be worth say 145k. And wages should have increased a hell of a lot more than they have.
Note that money is cheaper to borrow now, and inflation calc is based more on mortgage interest, not actual house prices. They need to take account of deposit required too as a bare minimum. Its all messed up.
Inflation is deliberatly under measured as that helps the rich.
You’ve basically just said foreigners coming over here, kicking our working classes (us) out of their (our) homes to build their mansions
Eh? Say what now? Thats just a frankly bizarre interpretation of what I said. Utter claptrap. i've not even mentioned nationality or class. Those are your additions.
What I've said is that social housing is being demolished in order to free the land for Luxury Developments. These developments are then marketed exclusively at Russian Oligarchs offshore investment funds
What on earth is UKIPy about that?
Its whats going on (and is documented in great detail in the Manctopia documentary) and has nothing to do with either nationality or class. Thats an idiotic interpretation of what I said
is that the life I want? no
is that the life you want?
is that the life anybody wants? probably yes. but probably not everyone who lives there.
You say that, but look around 90% of the new build housing estates. The gardens are the size of a postage stamp. And most gardens (newbuild or old) are an unmaintained and underutilized mess. The number of people who actually want to garden or need a garden is tiny compared to the number of gardens.
Things people want:
Big homes
Short commute
Lower cost homes
Lower heating costs
All things delivered by building high-quality, high-density housing.
Things people end up with:
Small homes
Long commutes
Expensive houses
The current market just tells you that the nice house in the countryside made from local stone with several acres of land is the aspiration. And that you should get as close to that as you can even if that means a redbrick semi in suburban hell with an overgrown garden because you're too tired to mow the grass after an hour plus commuting.
Flats don't have to be 1 bedroom apartments where you can hear your neighbor's pillow talk, they can be well insulated 4 bedroom duplexes, with well maintained and used parks around them a walking distance from schools, employment, retail and leisure.
Housing policy in this country's just gone down a route that aspired to a vision of family life and failed to deliver it.
The irony being that every time inheritence tax is discussed, it’s all the people stuck at the bottom of the ladder who are up in arms about it….
Agreed.
Can't argue with stupid.
I was a junior charge nurse in 92 earning around £22000 a yea
That was a big wage in 1992! Assuming correct then (and probably reflective of public sector in general) wages have not kept pace with inflation at all. my quick calc shows around 15-20k less than wear it should be today, and thus that also has to be considered as part of problem, not just the housing over-inflation.
Edit: @5plusn8 beat me to it on the wage issue.
For the love of god why is this clearly unsustainable position not the thing we are protesting about?
it is a crazy situation and not unique to the uk. i suspect low interest rates, money laundering, international investment and people’s fear of their house loosing value is what stops governments doing anything about it.
the usual way that house prices drop is by mortgages becoming unaffordable through raising interest rates. the problem with this is that it can bankrupt homeowners while not making actually buying a house any cheaper.
i agree entirely with the op. the situation is very bad for the reasons he (she?) states. (but i secretly believe that this is part of a plan to reintroduce manufacturing to the uk using a kind on chinese model and reduce the benefits overhead. i am not a believer in conspiracy theories)
Shame that the old 'avocado toast' argument has reared its head here. I thought STWers were a little smarter than that.
"I worked hard and scrimped and saved* therefore ITS EASY bloody millenials stop spending money on such things as PHONES and FOOD"
*ignore the fact that wages and house prices haven't increased at the same rate
part of a plan to reintroduce manufacturing to the uk
Most manufacturing is low value add and already being offshored from China to cheaper (and politically more acceptable) countries.
There's no way the UK could be competetive manufacturing plastic tat for the masses unless we go full Brexit and become like North Korea, cut ourselves off from the world and massively reduce living standards etc....
Wages and house prices havent increased at the same rate, however now 'the average man on the average wage can buy the average house' isnt relevant any more.
Its now the 'average couple on the average wage can buy the average house'. Where there was one, you now need two. This is probably knocking onto the delayed family problem....
unless we go full Brexit and become like North Korea, cut ourselves off from the world and massively reduce living standards etc….
I suspect that whichever half-wit takes over from Boris, you've just had a Mystic Meg moment about their manifesto
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.
You realise that saving £4k a year is really not possible for alot of people right? Before changing jobs I was earning a low wage (this is in a proper factory job, not a paper round or icecream truck) and even without avocados and cars on finance I saved just enough to cover my conveyancer & survey etc (£2,000) over 4 years
Had I not got that 100% mortgage I would have been saving for that £12k deposit for the govt to add £3k to for what, 24 years?
I’d ban unearned inherited wealth. Ie 100% death tax. It would solve a bunch of issues not least house prices. I don’t think it would be popular though.
Making it impossible, or at the very least much more expensive/less profitable, to own a residential property in which you do not live would be a good start.
I agree OP, house prices are ludicrous and have been for some time. Sadly a lot of those that are on "the ladder" seem very happy to pull the ladder up behind them, or at the least look the other way while someone else pulls it up.
Everyone always yells supply and demand innit, they're not making any more land, etc etc, but IMO the reality is that things have got out of hand because of cheap money supply and a constant stream of schemes to help make homes more affordable - in other words, help people take on more debt. The answer to people spending 80% of their income on housing isn't shared ownership, or longer mortgage terms, it's to stop the constant increase in housing costs.
Everybody will be squealing soon about the increase in utility costs - we are on SVR with our energy supplier and our bill has literally doubled for the last 6 months. This is seen as a national outrage, yet ever increasing house prices are met with champagne corks and much back slapping. What's the difference?
Had I not got that 100% mortgage I would have been saving for that £12k deposit for the govt to add £3k to for what, 24 years?
And in the meantime houseprices would have gone up another 200%. Government schemes are part of the problem and just work to preserve the wealth of those who use housing as a cash cow.
And in the meantime houseprices would have gone up another 200%
And rents would have risen at rates far above wage increases too, greatly reducing the amount you can save, year-on-year.
A double whammy!
Government schemes are part of the problem and just work to preserve the wealth of those who use housing as a cash cow.
From last weeks Guardian: A damning analysis pf Help-to-Buy saying just that
The verdict is in: George Osborne’s help-to-buy scheme has been an utter disaster
It's a simple unarguable fact that a person starting out now in my career at my job level would have a hell of a struggle to buy the small flat I started out in. It was only 2.5x my salary and there was plenty cheaper, I went for one at the smart/expensive/upmarket end of things because to be frank it was *easily* affordable and I wanted to live somewhere nice albeit I wasn't after a big house. There were loads around 2x salary.
It's now 5x the salary of the same job, so even a 10% deposit would be half a year of gross salary before you could hope to get your foot in the door. Small one-bed flat that didn't have room for a double bed so good luck to any couple trying to live there.
Exactly!
100% inheritance tax is the way, it's completely injust that dropping out of the right hole by sheer luck should give you such a huge advantage, but as long as the people who make the rules are the ones with huge sums to give to their offspring that isn't going to change
And of course remove inheritance and we'll be back to stuffing cash in mattresses. There's no easy answer
I'm not sure empty houses\second homes are particularly relevent. Obviously they have a big impact in some small areas, but overall the number is tiny - ~200,000 empty properties (for 6 months or longer) is around 1% of total housing stock. Not arguing it shouldn't be clamped down on, but it won't make much difference.
The thing is, if houses were cheaper, you still wouldn't have a better house. The 10th richest person in a town will own the 10th best home. If they're cheaper on paper, its because you're spending your money in some other way, and eventually still effectively have the same place.
During return to work, some people at my company were complaining about having to live within a commutable distance of their place of work. In Phoenix. Where salaries are significantly higher than the UK, and you can buy a large, detached 4 bed house for $150k. Everyone thinks hosues are expensive.
You’ve basically just said foreigners coming over here,
He didn't say anything about anyone 'coming over here': that's projection on your part.
In fact the issue is the exact opposite: people buying houses and NOT coming over here. Investors buying houses that they never intend to live in.
Immigrants coming and buying a house to live - great, more power to them.
Interesting that someone above mentioned new flats in Manc not being sold to first time buyers. I have often noticed this when looking at places in Leeds currently. Just had a quick look on Rightmove and here is a good example - new apartment build in Leeds centre, 98000k so ideal for a first time buyer but it's sold as a buy to let property for investors only.
100% inheritance tax is the way,
I'd say tax it as income so at your marginal rate.
Also do something about Trust funds as if you have a decent property portfolio you just stick it in a trust fund and it never gets touched by inheritence tax.
In fact the issue is the exact opposite: people buying houses and NOT coming over here. Investors buying houses that they never intend to live in.
People not coming over here buying our houses and not sleeping with our women! Makes you sick to the core!
He didn’t say anything about anyone ‘coming over here’: that’s projection on your part.
In fact the issue is the exact opposite: people buying houses and NOT coming over here. Investors buying houses that they never intend to live in..
Exactly! I doubt the people buying these places could find Manchester on a map (or care less where it is on a map), and they will never even see the expensive luxury property they now own, let alone spend a night under the roof.