I can’t begin to understand how people can afford these sorts of house prices.

I could buy a £500 000 house with the equity I have. My partner and I each bought a flat – one for £38000 one for 48 000 back in 92. they are now worth £350 000 and £200 000.

So we re now in the position to buy at a huge sum – but not because we earned the mnoney but because the UKs housing market is so stupid. We could not afford to buy those flats from sctrach in recent years because they have gone up 500%+ x but salaries only up 25%

Also to the above If I was stating now on the best salaries either of us have earned would could buy nothing anywhere near us aaprt from perhaps and ex council flat in a horrid estate

So we re now in the position to buy at a huge sum – but not because we earned the mnoney but because the UKs housing market is so stupid. We could not afford to buy those flats from sctrach in recent years because they have gone up 500%+ x but salaries only up 25%

Hopefully an independent Scotland can implement some effective wealth taxes, reclaim some of that unearned wealth.

The Covid house price increases isn’t just a UK thing, it’s happened globally in richer countries.

https://www.economist.com/finance-and-economics/2021/04/08/house-prices-in-the-rich-world-are-booming

Don’t know how it will pan out. If longer term people can work more from home and prioritise space then there could be sustainable increases in places that were previously pleasant but too out of the way. Or it could all go pop.

Renting in the UK is horrendous. We moved earlier this year and considered renting but folk were wanting £1200/month for absolute dumps that would cost ~£800/month to get a mortgage on. I don’t want to overpay for a house but renting is not good either.

£1200/month for absolute dumps that would cost ~£800/month

£800 plus of course maintenance, buildings insurance, carpet replacement etc etc.

Really a fairer comparison would be the interest component of the 800 a month + the cost of maintenance, rather than the full 800 (as the rest of it is still yours, it’s just in a less liquid form).

That makes it about 230 + other costs (let’s say 1% of the value of the property, so 2k on a 220k house – 160 quid a month) quid a month for the mortgage.

So 1200/month for absolute dumps that would cost ~£390/month.

Had to find out the rough price of my old man’s place last year. Went to look again, but found nothing similar in the area, but did find this.

One bed apartment. Chav and fake tan central.

https://www.rightmove.co.uk/properties/90878098#/

Had to find out the rough price of my old man’s place last year. Went to look again, but found nothing similar in the area, but did find this.

One bed apartment. Chav and fake tan central.

https://www.rightmove.co.uk/properties/90878098#/

That is 5x 1 bed flats plus a shop in the sale, not just a singular 1 bed flat.

Really a fairer comparison would be the interest component of the 800 a month + the cost of maintenance, rather than the full 800 (as the rest of it is still yours, it’s just in a less liquid form).

Apart from comparing apples (repayment for you) with pears (interest only for landlord).

By your suggestion the leveraging through interest only is what landlords should be doing. This though in my view is exactly how some of the price increases are coming about – landlords who keep leveraging and pushing for price increases because on paper they have more to borrow against, pushing up rents because of ‘increases’ in house ‘value’, so borrowing more, so buying more at higher prices, so putting up rents… (and repeat).

What if we did away with interest only mortgages for all people – BTL, residential, commercial? What if people had to be making headway on repaying what the bank loans them? This over a few yeas might have a tempering of costs.

@ewan – if you think it’s reasonable (and can afford) to not protect your assets – in a perfectly legal manner – for dubious “moral” reasons then all power to you. Especially since most of the care is provided by 3rd party providers that provide dividends to shareholders.

If you want the little guy to fund shareholders with what may very well be their only residual asset then fair enough.

In the meantime, I suggest your outrage against tax avoidance would be better focussed in this sort of industrial direction:
https://www.bbc.co.uk/news/uk-57021128

more whataboutery + i’m the just the little guy</quote>

Plenty of things are immoral but legal. At least you’re owning it I suppose.

By your suggestion the leveraging through interest only is what landlords should be doing.

I wasn’t suggesting this. I was pointing out that when you consider that you get an asset at the end of a mortgage so the total ‘cost’ of the mortgage isn’t the sticker price. This makes renting even less fair.

You can’t really directly compare rent and finance costs, a renter can walk away from the property with no further obligation. He, or she, can move into a 250k property for c2k commitment.

Landlord takes responsibility for cladding issues, lift refurb, one of mine cost me 6k in lift refurb last year.

Landlords are taxed on purchase, taxed on income and taxed on sale.

@Ewan – your accusations of whattaboutery are misplaced. I stand to inherit *nothing*. Zip. Nada. Not a thing.

I don’t have an interest in the game other than principled objection. So you can dismiss it as whattaboutery – but frankly, I think you need to re-examine your own position. I think you’re mistaken on where the moral imperative lies in the care system as a whole.

Wholesale systemic reform is needed – not demonisation of poor people who have to give up passing their only asset on to their children whilst the well off have already sorted themselves out (and may well be extracting the wealth of the poor anyway).

Frankly, I’d abolish *all* inheritence. There are a lot of very very good reasons to do that. But in the meantime, getting average joe to work the system in a totally legal manner so he doesn’t get *more* buggered than he already is is the only pragmatic – and moral – tactical solution.

Well we agree on that at least, i’ve long advocated a 100% inheritance tax, would fix a lot of the issues in this country.

Frankly, I’d abolish *all* inheritence

How the heck would you do that?

We live in a town that doesnt tend to be as effected by value fluctuations as others. It increases but its quite predictable and steady. Anything overpriced sits and is pretty obvious.

Only reason to reply here was that i have just recently cleared my mortgage. I am completely debt free. And then my daughter started kicking off about the size of her bedroom (3 bed semi) and i now have a 4 bedroom detached ‘executive’ house being built for August and a nice mortgage to match. I will be paying much less per month on the new mortgage even though its value is double my old one. I have enough money in the bank to almost clear 50% of the new mortgage if we need to. Mortgage will take me to 65 as we were not offered any terms that would take us beyond.

My old house was traded in and was put on the market at 9am. We were told 4 people would come to look at that night and 2 a couple of days later. By 9am the next day 2 offers of full asking price had been received and one accepted. This was £5k more than the trade in value we had been given.

Finally, the main reason, other than my daughter making noise about needing a bigger bedroom is that i have two young adults as kids. The future looks like i will have two young adults living under my roof for the foreseeable and i am good with that. If that is to be the case, well the 3 bed semi wasnt big enough. This new one will make that a much more civil experience.

Must be a big house if a modern 4 bed competes with an older 3. I haven’t seen an “executive” house yet that is any bigger, room for room, than my ex-council house.

We’re in a two bed end terrace and need to move to a three at some point in the near future. Realistically Mrs F and I will be sleeping in the living room on a sofa bed as we simply can’t afford the huge jump in price from a two to three bed property. I honestly can’t fathom how people afford to buy anything above a two bed terrace in most towns nowadays. Unless they bought when houses were still reasonably priced, earn a huge salary or are willing to be in debt til they’re ninety.

Well we agree on that at least, i’ve long advocated a 100% inheritance tax, would fix a lot of the issues in this country.

For farmers as well?

Part of the reason I started this thread is I’ve been putting our buy to let on the market. I had been looking at house prices and speaking to estate agents.

On the market Wednesday. One viewing on Friday. Cash asking price offer by Monday.

(Before anyone says it, I’ve just worked out annual  profits after tax plus capital value increase per year. It’s worked out a little under £2k per annum. FFS. Anyway, no more giving up sunny riding days to paint windows, re-tile, let carpet fitters in, replace dicky locks or show new tenants around. No worrying every time there’s a storm that I’m getting a phone call in the morning. No more saving up for a new bike only to get the phone call to say the boiler just sh*t it’s guts out and spending Santa Cruz prices on a Baxi. Yay )

@matt_outandabout:

On the market Wednesday. One viewing on Friday. Cash asking price offer by Monday.

Don’t sell the fekker. Wait until someone comes with something *silly* tbh.

Yes, there’s all sorts of “moral wrongness” with it – but, by design, buying and selling our homes works as a market. That’s not your fault.

Personally, I’m an anti-capitalist. But I work in banking and live in a capitalist world. You’ve got to do the best for yourself that you can, in the system that you live in.

For farmers as well?

I’m sure it’s possible to figure something out. E.g. Random idea: farm land could become a state asset and farmers just rent it, that way their offspring don’t need to buy the farm they could take over the lease. Sons / daughters have automatic right to the lease etc.

Farm land is currently used by the rich to avoid Inheritence tax, which is why James Dyson has been buying up so much recently (and moved to Singapore). This means ‘real farmers’ have to compete with billionaire tax avoiders when buying farm land.

Random idea: farm land could become a state asset and farmers just rent it

Chevychase – not only is your position morally reprehensible but you could find yourself in huge legal bother – basically you cannot hide your assets in the way you seem to think.

@tjagain – it’s a question of timing.

It’s hiding assets if you think you’re about to become unwell to dodge having to pony up your property. If you sort your affairs out early – as I’ve advocated in this very thread – then it is completely legal and above board.

I’ve already defended why it is both the sensible and moral thing to do. I don’t really have the appetite to do it again – I’ve already stated I stand to inherit nothing.

If other people want to guarantee they’ll inherit nothing, through nothing more than their own inaction and (misplaced) sense of morality, and would rather hand their parents hard-earned over to the state (and then on to private shareholders in the form of extracted profit), then knock yourselves out 🙂

I honestly can’t fathom how people afford to buy anything above a two bed terrace in most towns nowadays.

Again: location. PM me and I’ll tell you what I just bought and what it cost.

I’ve just worked out annual profits after tax plus capital value increase per year. It’s worked out a little under £2k per annum. FFS.

Is that taking into account someone else paying off your mortgage or no?

@tjagain

Also to the above If I was stating now on the best salaries either of us have earned would could buy nothing anywhere near us aaprt from perhaps and ex council flat in a horrid estate

next time you are ranting about people who commute long distances and own cars to make that possible you might want to remind yourself of this post!

Is that taking into account someone else paying off your mortgage or no?

A good point – but no, we’ve been mainly interest only and paid off a little each year when we could out of net profit.

Its about double the square footage of our current house Squirrelking. So definately bigger

pay a £1000 a week to put them somewhere nice

You won’t get that in the South, trust me.

House up for sale Monday for 150,000 now been offered 155,000 and about 8 viewings to go. 3 bed semi ok area drive and garden. North West innit but 5 minutes to the beach, 40 mins to North Wales. Down South prices are just crazy.
TJ’s moral policing is a bit dubious as weren’t you planning to Air B and B your flat to maximise profit to fund you’re travelling? Your moral compass must be too close to a magnet.

Things continue crazily here.

Seems most things are going 15%+ above asking price, and the asking prices are raised too.

There are some stories of houses being bought before any viewings, others of 20+ offers being made and generally some huge prices being paid.

Is this about to be the bubble that goes pop?

I can’t begin to understand how people can afford these sorts of house prices.

20 years of living like a student, living with my parents for a few years in late 20s, buying several wreaks, doing a job I don’t like but pays ok but not amazing by any stretch.

Thing is I do live in a house beyond where I would be if I didn’t make these choices but if I hadn’t made theses choices I would have not been able to get started on the ladder originally. I think it’s too hard to get going now without taking some quite extreme choices early and having some good luck (I did / had both). You can’t just do your job unless it’s very well paid or you live in a cheap part of the country.

Is this about to be the bubble that goes pop?

I think it all depends on the recovery from Covid, someone will be along in a moment to explain how we’re looking at a super great depression that will have us all in the queue for the soup kitchen at moment, but whilst that won’t happen, things will get bumpy when the Government decide we’re on our own and some people are going to have a really rough time of it.

You’d hope at least, none of the 11.5m people on furlough as of mid-April are actually looking to move up, but Brits and houses…

At the moment, in some sectors at least there is a bit of a recruitment problem, it seems that so many people who were furloughed from their usual jobs, took casual work, delivering food from super markets and takeaways are now returning to their usual work, they can’t recruit enough people to replace them, or indeed in the Pubs etc, Economically this is a good sign.

When May furlough figures are released, tomorrow I think, it would be very positive to see a decent drop in numbers and this to be a trend up to it ending in September.

You’d hope, give employers have to pay a meaningful % to keep people on the scheme it’s not 11.5m ‘zombie jobs’.

As of dangerous financial bubbles there are two I can think of, 1) Bitcoin, down 40% in 6 weeks wiping $307,063,448,400 out of existence 2) Motor Industry, especially VW. They’re massive in the PCP world. Their model is based around controlling the value of vehicles by controlling manufacture, sales and financing, but it only works if they keep customers on the wheel, buying new or nearly new cars every 2-3 years with WFH being a growing trend only accelerated by Covid, they’re going to find a lot of customers not replacing cars when they reach the end of their leases.

Is this about to be the bubble that goes pop?

I think there is a way to go yet. One of the biggest employers in Edinburgh area (RBS/NatWest) have just told many staff that they only need to go to an office twice a month. That has a pretty major influence on how people arrange their lives.

Devon’s gone mad price-wise…

When this thread first started I checked our estimated sale price on Zoopla, and it was £395k.
That’s up from us buying it for £300k in 2015.

I just checked it now (3 weeks later is it?) and it’s now allegedly worth £420k. Wtaf?

Not that we’re thinking of selling but that’s insane!

I honestly can’t fathom how people afford to buy anything above a two bed terrace in most towns nowadays.

I agree – I bought a two-bed terrace in the mid-90s when I was in my late twenties as a single mortgage applicant (£42k). I couldn’t afford to buy that property now (asking price of around £250k) even taking into account my wife’s salary.

With the massive uncertainty in the job market I suspect Alot of the mania is getting the house you want or need to be in while you have a job that gets you the mortgage.

Much easier to retain that house on a lower income than to get it.

There are many other contributory factors at play for sure but almost all of it boils down to FOMO

Sure as hell wouldn’t like to try and enter the market these day.

Devon’s gone mad price-wise…

Cornwall has too – https://www.rightmove.co.uk/properties/64374279#/

Getting more crazy by the day, on the Northumberland coast.

A tiny 2 bedroom cottage, offers over £295k. Listed on right move, sold stc the next day. Does have beautiful views though.

FOMO?