Housing bubble.

when you have a hospital consultant on 80K unable to afford a family home where the hell are all the nurses, doctors, teacher, firemen, etc going to live ?

Northern Ireland?

Many of us in the SE could retire by moving to somewhere like that. Not sure what’s stopping me!

Pretty much my retirement plan, we almost looked at a farm in North Yorkshire on the hill overlooking Guisborough (i.e. the back of Wilton Bank,whatever it’s called). Big farmhouse, stables, yard, barn + 19 acres, £250k. House prices in the SE only have to average the same increase as the NE for me to retire just by selling the house at the end of the mortgage, let alone my pension!

when you have a hospital consultant on 80K unable to afford a family home where the hell are all the nurses, doctors, teacher, firemen, etc going to live ?

I work in engineering so pretty much the same salaries as medicine, and even in the SE it’s affordable on those salaries. Having to buy a £400k+ house as a first time buyer sucks, but I don’t feel too hard done by with what we’ve got. There are still <£200k houses, they’re just not in nice desirable leafy suburbs.

The inflation that London and the South-East has experienced is ridiculous though – if you move 15 miles in any direction east west or south from where I live you’ll see probably a 20% reduction in house prices.

It’s not sustainable and it can’t keep increasing – as the prices keep increasing less and less people will be willing (or even able) to buy here and there is only one thing that can happen from that point – a crash.

Wages aren’t even nearly keeping up with the price inflation and I would hedge a bet that the majority of people that live in these areas are holding onto their homes by the skin of their teeth. Certainly everyone that I know.

There are still <£200k houses, they’re just not in nice desirable leafy suburbs.

Where? I’ll buy it right now.

Bought a house in Aberystwyth in 2012. It’s now on the market, reduced to 10k less than I bought it.

Would’ve been better off spending the deposit on hookers and coke.

Not really feeling much of a housing bubble here.. 😐

thisisnotaspoon – Member

we almost looked at a farm in North Yorkshire on the hill overlooking Guisborough (i.e. the back of Wilton Bank,whatever it’s called). Big farmhouse, stables, yard, barn + 19 acres, £250k.

are you sure there isn’t a ‘0’ missing from that price?

Easy to say that but it doesn’t make it true, or even mean it’ll happen any time soon. I have a clear memory of sitting in a pub in Ealing with a mate having that same conversation ~20 years ago. Still waiting.

I see there’s lots of hate for the BTL crowd 🙂

The current demand due to the increase in SDLT is only a blip and prices won’t plummet in April. There will be plenty of non-BTL buyers staying out of the market right now waiting for that drop.

FWIW, my brother is selling his 2-bed flat in London atm. Needs work, 10 viewings lined up on the first weekend it’s on the market. Asking £720k…

Edit – literally just heard they have accepted £715k.

I live in Surrey and tried taking out insurance against a crash with http://www.protectyourbubble.com, but no go 🙁

people keep talking about a crash but it didn’t happen properly the last time with only a small correction followed by a buying frenzy.
I was a believer and posted the rollercoaster house price crash jpeg on several threads on here over the years showing the boom/bust cycle but it never really happened in the way renters with savings hoped.
my thoughts are that in london/SE sensible property (by that i mean £200-£600k) will always be relatively buoyant simply due to demand and people will look to other areas for value, something i did when i bought last year in SE19, in 18months since then the artisan cafe to chicken shop ratio is now very much in favour of the single estate aeropress with vegan cup-cake for £6 and foxtons have opened a branch to ramp things up a bit. they have a flat in my small block on the market for 70k more than i paid for mine and it’s likely to go for just below asking fairly quickly, thing is it’s ‘affordable’ for double income couples or singles with a decent but not nutty wage. the £1.5million plus market is almost it’s own microcosm in London and that’s where things look a bit flat after the recent changes but thats for the city boys and foreigners with money to park somewhere safer than their own country.
as an aside to this there has been a shift in the demographic in some of the flats here with manual or low skilled workers being priced out of renting in the block as i overheard a conversation between 2 tenants talking about the rent going up from £600-£800 and having to move, thing is that’s still cheap! should be more like £1k-£1.2k a month. now young professional couples have moved in as they can afford it and want somewhere with a park/transport/artisan pizza and a farmers market. this gentrification still has a lot of ground to cover in london before it’s one huge Stoke Newington with an Oliver Bonas and mini-waitrose on every corner.

I agree it’s very easy to say that and with the way the current government is going it’s definitely not going to happen immediately.

The simple answer is to just build more bloody houses. There is a development that could be happening around the area soon at the old Wisley Airfield.

2500 new houses, essentially a whole new village. You can understand why there is so much opposition from current homeowners in the area..

I say get **** to the lot of them, build the houses so I might actually have a chance!

Easy to say that but it doesn’t make it true, or even mean it’ll happen any time soon. I have a clear memory of sitting in a pub in Ealing with a mate having that same conversation ~20 years ago. Still waiting.

this. there is never a good time to buy a house. best to just suck it up, and get on with it.

I could be nearly mortgage free by now if I’d bought when I first had a stable enough income too rather than umming and erring and waiting.

Where? I’ll buy it right now.

Whitley and Oxford Road areas of Reading for a starter.

Our flat in Woosehill in Wokingham is a 3 bed + rooftop garden + garage and only valued at £250k.

are you sure there isn’t a ‘0’ missing from that price?

Nope, there was also converted/renovated watermill near Skinningrove on for the same price, that didn’t sell and eventually went to auction. Mouseprice hasn’t got a record for it so I don’t know if it sold at auction either.

http://www.zoopla.co.uk/property-history/old-kilton-mill/mill-lane/skinningrove/saltburn-by-the-sea/ts13-4aj/36163762

The FT had a statistic the other day 54,000 – £1 million properties are planned or under construction, slightly less than 4,000 in that price bracket sold last year – what do you think is going to happen to prices?

thisisnotaspoon – Member

Nope,

gosh.

in an attempt to see something positive in all this, London stamp duty now generates something like £2.5Billion / year.

(national total approx £5billion+)

Can I borrow your bargepole ? I don’t want to use mine !

London stamp duty now generates something like £2.5Billion / year.

The sale of one house in London generated more stamp duty than the whole of the city of liverpool.

Can I borrow your bargepole ? I don’t want to use mine !

Whitley has some nicer areas now, Oxford road on the other hand, some of the purpose built flats are Ok, with their locked parking garages etc, but………

Still, under £300k you’re looking at 2-3 beds in Wokingham or Lower Earley, Ok it’s not a Farmstead in Teesside or a mannor house in surrey, but it’s an Ok house in one of the more expensive postcodes locally, and affordable on a Nurse/Teacher/Fireman salary.

“thisisnotaspoon » Whitley and Oxford Road areas of Reading for a starter.

Can I borrow your bargepole ? I don’t want to use mine !”

reminds me of my mates when it was car driving time i want my first car but it must be a nearly new white audi with black wheels….. Realistically they got what they could afford.

How ever these days you can rent a white audi with black wheels quite cheaply compared to the repayments on one that isnt new so why not rent the nicer car and live the dream while demolishing the chances of owning your own white audi with black wheels.

guess its the same as i could buy a house in northfield and wake up to stolen white audis on the road outside every other day and spend 80k for a 2 up 2 down…..

every person I know lives around here, I work in Fetcham, my entire life is here and I’m absolutely going to have to throw all of that away and uproot entirely if I want to own my own home.

Fancy a nice over-shop duplex in the heart of Leatherhead? Yours for £220k.

Still, under £300k … affordable on a Nurse/Teacher/Fireman salary.

only if they have a huge deposit from somewhere ?

There are still <£200k houses, they’re just not in nice desirable leafy suburbs.
Where? I’ll buy it right now.

I was going to suggest Aldershat but even 10 years ago pokey wee 2 bed terraces were knocking on the door of £200k.
You might find a flat but I doubt you’ll find a house for that price.

Just out of interest why do people think a crash would be such a good thing?
If you can afford the payments and don’t need to move then you have lost some notional value and it won’t feel good. You would probably be less inclined to sell and may drift into a BTL because you can move on for less.
If there is a crash and people start defaulting then this hurts then banks which will in turn hurt everyone again. Also if houses start flooding onto the market due to defaults many of these would go to the cash buyers and the BTL corporations who seem to have the estate agents in their pockets.
Prices are driven by demand. This demand comes from proximity to work/schools etc. In an urban area without demolishing streets of houses and replacing terraces with high rise apartments supply is mostly fixed. The type of financial crash that would bring down prices in the South East would have such horrible repercussions that the reduced prices wouldn’t compensate for.

cornholio98 – Member

Just out of interest why do people think a crash would be such a good thing?

1) if people can buy cheap houses, they’ll have more to spend in the ‘real’ economy, rather than handing over 30%+ of their take home pay to a landlord.

2) i/we would like a slightly bigger house, maybe with a garage/shed, but nothing grand. Right now we’d need to borrow an extra £100k (or more) to pay for it. We can’t really afford that, so we’re sort of stuck. If prices came down, the gap would be smaller, and we’d be moving.

Just for a bit of balance on the South east, I’ve lived in a 3 bed terrace on the edge of Chatham for 10 years and the values here are probably only up 20-30 percent since I bought. Yes it has a certain reputation but it’s not all bad and it is good to commute from. Lots of development work in this area is one reason but houses here still sell within a week.

Just out of interest why do people think a crash would be such a good thing?

To piggyback this, where I live in Surrey, I would say the vast majority of the home owners here got their houses back when they were dirt cheap and it was the area to be.

They’ve since remortgaged to their eyeballs so they can buy their flash BMW’s and Audi’s and live like the rest of the folk in the street. There is very much a keeping up with the Jones’ attitude here and people are willing to fully indebt themselves so that they can.

I’ve got money, actual real money with real numbers however they don’t match the numbers that are attached to the houses here.

However I’ve got more money than that guy down the street with a 3 bed house that’s “worth” £500k with a BMW parked on the drive.

A crash would turf these people out and allow me to jump in honestly with my actual money.

It’s an extremely sad state of affairs where one would wish life changing consequences on others for ones own benefit, but alas this is the state of affairs for a young person in this country today. We’re absolutely buggered.

A crash would not be a good thing insofar as it will collapse the UK economy.
Blame the central banks and the politicians for creating this mess.
It can’t end well either way.

If prices came down, the gap would be smaller, and we’d be moving.

that’s assuming you have job, a house price crash would be triggered by an event that would impact on many other things not just house prices. currencies, lending, interest rates, public spending etc etc. not singling you out but people can be very myopic and only look at their immediate wants/needs. the bigger picture is that the government doesn’t want a crash but a managed flattening of prices and single digit increases and will do everything it can to facilitate that with the mechanisms it has to hand like stamp duty, interest rates, help to buy schemes and taxation.

[/quote] i’d like a slightly bigger house, with a garage. right now i need to borrow an extra £100k to pay for it. we can’t really afford that, so we’re sort of stuck. if prices came down, the gap would be smaller.

But also the value of your current home could drop wiping out any of the payments you have already made potentially leaving you in negative equity. Well unless you have already paid off a good chunk of it.
Massive swings in pricing generally do not help maintain stability.

I was going to suggest Aldershat but even 10 years ago pokey wee 2 bed terraces were knocking on the door of £200k.
You might find a flat but I doubt you’ll find a house for that price.

Fancy a nice over-shop duplex in the heart of Leatherhead? Yours for £220k.

😀

However I’ve got more money than that guy down the street with a 3 bed house that’s “worth” £500k with a BMW parked on the drive.

No, you haven’t. What they have is an asset. What you have is pocket money. You cannot afford what they have, ergo they are wealthier.

A crash would turf these people out and allow me to jump in honestly with my actual money.

These people have paid a mortgage for years. They got nothing for free, and just because you have saved for a couple of years it doesn’t somehow make you better. Nothing dishonest about it.

It’s an extremely sad state of affairs where one would wish life changing consequences on others for ones own benefit, but alas this is the state of affairs for a young person in this country today. We’re absolutely buggered.

What is sad is the sense of entitlement. Nobody deserves to own a house any more than they do a BMW or an Audi. There are affordable houses all over the UK, if you REALLY want to get in the ladder, move.

Do you know what a housing price crash would do to the country? Many, many people would not have jobs, the banks would be going pop (and not lending). People would be homeless, families out on the street. But you’d be able to afford so I suppose that’s OK yeah? 🙄

Still, under £300k … affordable on a Nurse/Teacher/Fireman salary.

😯 What do you think they get paid!?

A nurse starts on £21k. The highest a ‘normal’ nurse will be getting is £28,180. Senior nurses (ward managers, specialist nurse practitioners etc) might be a band 6 or 7 (https://www.healthcareers.nhs.uk/about/careers-nhs/nhs-pay-and-benefits/agenda-change-pay-rates) but the core staff will be a 5.

A £270k mortgage (90% on a £300k house) at 5% over 25 years is £18,940 per year. So it’s affordable if the nurse doesn’t pay any tax, save any money, pay into a pension or buy anything, ever apart from the rail season ticket to get to work.

If it’s two people earning £25k each, then one person will be spending almost every bit of their take home pay on the mortgage. Leaving ~£20k for a couple to live off. And then one of them goes on mat/paternity when a kid arrives and they drop down to statutory mat/pat pay….

And that’s assuming that they can get £30k from somewhere to put the deposit down in the first place.

So….we moved to Wales.

Definitely one to consider. Should redundancy happen I would be very tempted. Work wise there just doesn’t seem much in the area whenever I’ve looked.

you keep siting this …. how ever as the tax will go up across the board – youll find rents go up across the board – even those not affected by it will use it as an excuse to put their rents up to match the others so they get more money in…… cutthroat business.

Sorry absolute rubbish – what rental apartment or house is not already currently rented out for the maximum that the local market can sustain? Landlords can’t simply put the rent up to whatever they feel, well I guess they can I suppose, it all depends whether they want someone to live in it I guess?

People who don’t own houses keep saying that the prices will crash as if they say it enough, they will. They will go down a bit, and they will go up a bit. There is very very little chance that this magic crash that renters are hoping for will ever happen. There is too much money at stake.

Wouldn’t be so sure of that. Times are changing and the young are becoming very disenfranchised with the whole situation. Students are currently leaving universities with an average of £44k in debt. As more and more young people reach voting age then I’d expect government policy to gradually swing in their favour. If market forces haven’t already taken their toll before then (which I suspect they will have), eventually they’ll be too much money and votes at stake for house prices not to fall or be forced to fall to affordable levels.

What is sad is the sense of entitlement

There is no sense of entitlement. I understand people have worked hard for what they have, as have I. I don’t think I deserve it anymore than they do, but I do want to buy a house in this area and the downfall of the housing market in this area would absolutely be to my benefit.

But you’d be able to afford so I suppose that’s OK yeah?

Yes, that is OK. I don’t want anyone else to lose out, I certainly wouldn’t wish bad times on anyone, but my generation are going to have a constant uphill battle trying to establish ourselves on the property ladder. Given the option between someone else doing well and myself, I choose me. Would you not?

However I’ve got more money than that guy down the street with a 3 bed house that’s “worth” £500k with a BMW parked on the drive.
A crash would turf these people out and allow me to jump in honestly with my actual money.

Just out of interest, you say you can jump in with real money if the price drops. I assume this means buy without mortgage as if you had the “real” money to afford the payments as the guy down the street already does. If you have such a large amount of free cash sitting around why are you still renting?

Not meaning to get at you but the situation is that if you have money to get out of renting then it is generally a better (but much less flexible) option. Rather than hoping for a crash and comparing yourself to everyone around you is it not better to focus on doing the best for yourself in the current market?

only if they have a huge deposit from somewhere ?

Same way I did, live in a cheap rental and save.

If it’s two people earning £25k each, then one person will be spending almost every bit of their take home pay on the mortgage. Leaving ~£20k for a couple to live off. And then one of them goes on mat/paternity when a kid arrives and they drop down to statutory mat/pat pay….

I’ll bite again (seeing as I’m the hypothetical late 20’s person, living in Reading, who owns one or two steps up the ladder from one of these houses, but isn’t a nurse), you pay the mortgage and live on the remainder. My net income after the house related stuff is paid is a heck of a lot less than £20k/2 per year, in fact it’s less than half that.

As for ever increasing house prices, I think we’re approaching a ceiling. The demand is being set by people maxing out with 30 year mortgages taking up the available supply. Prices can’t rise higher as there’s no one to buy them. You can still move up the ladder at that, it just won’t be by “I made £200k on my house value in 5 years” type money, it’ll be back to “I got a promotion at work and can afford a bigger mortgage”. Those people aren’t going to go away, so a crash will only occur if the mortgages dry up (which could happen), but with the oil price rock bottom I don’t see an economic recovery in the short term and no associated interest rate rise.

Given the option between someone else doing well and myself, I choose me. Would you not?

It really depends on others resultant loss. If I mugged a charity collector, I’d be £XX better off. Lots would be worse off but I choose me.
You are clearly an extremely selfish individual. You’ll probably earn enough to buy a house quite soon. Until then, nobody owes you anything. Move or rent.

Just out of interest why do people think a crash would be such a good thing?

As said above, people are pumping their money into property which on the face of it is a good idea, but high house prices means that more disposable goes into mortgages and into assets. But when do those assets get realised? You die, and assuming you die quickly and at a good age it goes to your kids. But they’re in their 50s at this point and are financially stable, so they pass it onto their kids who are just starting out. And they will probably (or should) end up putting it towards their first house, where the money ripples up the chain eventually to someone buying a house from an old person who’s just died.

So our disposable income is going round and round in circles. High house prices are sucking up wealth like a black hole which, when the crash comes, will simply eliminate it.

If however we had that money to spend on other things, it’d be working for the economy. We’d be buying say, consumer electronics. Well that industry would then grow, have spare money to spend on R&D, produce technological developments which could benefit mankind.

OR, if you don’t like that potentially un-eco friendly outcome, we might have more money to spend on food so we’d buy more organic food or that from smaller independent producers; we might pay the extra for the eco friendly or ethical product; we might have solar panels installed – thereby driving those industries forward.

Bottom line – the more people are on the breadline due to housing costs, the less things will change.

The demand is being set by people maxing out with 30 year mortgages taking up the available supply. Prices can’t rise higher as there’s no one to buy them

That hasn’t happened in other countries, like Japan. There are many more ways to fund a house than a simple mortgage. I knew someone even in 2000 in London whose cash-rich brother invested in her house. He put down something like £100k on the basis he’d get an appropriate proportion of the sale back when she sold. I bet he made a killing too.

And then there are the parents dying and leaving £6-800k houses in the SE. That allows you to buy more than 4x salary.

Yes, that is OK. I don’t want anyone else to lose out, I certainly wouldn’t wish bad times on anyone, but my generation are going to have a constant uphill battle trying to establish ourselves on the property ladder. Given the option between someone else doing well and myself, I choose me. Would you not?

what is your generation ? the 20 somethings ? Im in that generation – as is TINAS i think…. we both just worked hard/saved hard/spent less.

Certainly sounds like the entitlement is strong in this one.

It really depends on others resultant loss. If I mugged a charity collector, I’d be £XX better off. Lots would be worse off but I choose me.
You are clearly an extremely selfish individual. You’ll probably earn enough to buy a house quite soon. Until then, nobody owes you anything. Move or rent.

What a ridiculous argument. I’m not proposing literal theft for my own benefit.

I’m proposing that perhaps a crash wouldn’t be the worst thing in the world for me personally. It’s not being selfish, it’s capitalising on a good oppportunity for myself.

what is your generation ? the 20 somethings ? Im in that generation – as is TINAS i think…. we both just worked hard/saved hard/spent less.

Yes. That is fantastic I’m glad you have managed to break the mould. Where abouts in England do you live out of curiosity?