Housing in the UK

[telstarbox]

Is it too expensive, is it just a problem in London or nationwide, will there be another property crash?

 

[Xenophon PCDGS]

I suppose we will have to see how long the Bank of England holds down its base rate to the current very low level.

 

[Clip]

Its hard to say really as I dont know the price of houses outside London.

But we should also remember that the price of a house is what people are prepared to pay - if people turned round and said, NO, to just about every house on the market due to it being too expensive then they would start reducing them to sell.


We obviously need more housing but there was a story in the paper the other day stating tht we are building houses quicker than at anytime in the last 10 years so the supply of materials is drying up thus pushing up the prices of that too.

 

[maniacmartin]

London is a like magnet. It is constantly sucking more people in, sucking more jobs, so more people want to live there etc, in a vicious circle.

We need to stop people buying London homes as an investment, by making it less financially attractive for them to do so. Every empty house or buy-to-let is another home that's off the market, making it more difficult to become a resident homeowner, even for those on decent salaries.

I think the government should also try harder to encourage businesses to settle outside of London in other british towns.
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we are building houses quicker than at anytime in the last 10 years so the supply of materials is drying up thus pushing up the prices of that too.

We're also building smaller houses with smaller rooms than we used to, and smaller than our European neighbours.

 

[Clip]

We're also building smaller houses with smaller rooms than we used to, and smaller than our European neighbours.

I have no idea the size of what they are building as I dont want to move ever really but surely more is a good thing as long as they can still swing the proverbial cat in there

 

[Metrailway]

It is far too expensive in London and the South East. The problem here is that there isn't enough houses and that there are many overseas buyers. It was reported recently that 85% of new builds in Greater London were bought by overseas buyers. They see the London property as an easy and relatively risk free investment.

Another problem is that the political class are of the belief that rising property prices = votes. So there is a dis-incentive for them to lower property values by flooding the market with new state-funded houses. A retired person who owns a home is more likely to vote when compared to a 21 year old who lives with their parents. Guess who the policies are targeted at. Ironically, our prime ministers seem to be getting younger when compared to past decades.

I find property prices elsewhere rather reasonable. I believe before 'right to buy' house prices were actually falling in most places in the UK. I am of the opinion that 'right to buy' will end in tears. It seems no one has learnt the lessons of the financial crisis.

 

[telstarbox]

It would also be interesting to hear the perspectives of any home owners on the forum.

 

[maniacmartin]

I also believe that 'Right to buy' is misguided in the long term. Although I may well make use of it, it does nothing to solve the underlying problem (too many people and not enough housing stock in the Southeast). By subsidising first time buyers, if anything the government will drive up prices even more, so that they will have to subsidise more and more as time goes on, or when it finally stops prices will be higher than before they started.

(And yes I am a hypocrite as I moved from the north to London for career, social life and love life prospects, so I am part of the cause of the problem)

 

[St Rollox]

It would also be interesting to hear the perspectives of any home owners on the forum.

The price of your house (if your mortgage free) is only of interest if you intend to sell it for some reason.
You also have to keep the house in good order.
There does come a day when serious costs can come your way.
A few years goes passed and all of a sudden a few grand is needed.
Maybe the money or job you had is gone and then what.
It all sounds good in theory, reality for more than a few homeowners is somewhat different.
Suburbia is full of homeowners who are skint and in many ways trapped.
Sell up and go where?
And don't forget the toffs who woke up to find themselves with country houses and no money.

 

[maniacmartin]

It's not just about money though. As a nation, we are very psychologically attached to wanting to own our own homes. In a rented property, you can't just go around making alterations at will, and your landlords could decide to get rid of you. An englishman's home is his castle after all.

Of course renting has the most flexibility, and less risk if the property suddenly has a large bill that needs paying

 

[telstarbox]

I also believe that 'Right to buy' is misguided in the long term.

Do you mean Help to Buy? Right to Buy is the right of a tenant in council housing to buy their home rather than the new government scheme.

 

[ainsworth74]

I would argue that 'Right to buy' is just as misguided, in it's present form. The idea of allowing council house tennants to buy their own home is good but not requiring the Council (and indeed preventing them) to replace the sold home has been very damaging to social housing in this country and is probably part of the reason we have housing problems in the first place.

 

[radamfi]

Sell up and go where?

If you have something like £300,000 equity, like millions of people in southern England especially, you could easily move to somewhere cheap in the north or Midlands where you can get a terraced house or flat for under £100,000 and not have any more money worries. Even better, move to eastern Europe where you can buy a property for next to nothing and live off the rest of your money for the rest of your life.

 

[St Rollox]

We don't all live in the cushy south east.
The more i hear of the south east and their money the more it pushes me into the YES camp at next years referendum.
Right to Buy was abolished by the Edinburgh Parliament last year.

 

[NSEFAN]

We don't all live in the cushy south east.
The more i hear of the south east and their money the more it pushes me into the YES camp at next years referendum.
Right to Buy was abolished by the Edinburgh Parliament last year.

It's a self-sustaining situation. London & South East gets all the money because that's where the most people live because that area gets all the money, etc etc.

It would take a lot of political will power to de-centralise the economy to get other cities doing more. It would probably also take longer than 5 years, so no political party is going to care much unless they have serious prospects of having several terms in power.

 

[gordonthemoron]

Not all of the south east is expensive to buy houses, you can pay quite a reasonable sum in my neck of the woods (and a bit further south)

 

[deltic]

taking inflation into account house prices in the UK as a whole are the same as they were 13yrs ago. London a different issue where prices are unbelievable - I could not afford to buy the flat I live in now which I brought 20 yrs ago

 

[JamesRowden]

If houses were overpriced, I would expect it to make house building (or demolishing houses to be replaced by blocks of flats) an extremely profitable trade and so I would expect the free market to automatically balance itself out unless new housing is somehow unpopular or there is another problem (like maybe present land owners asking for a lot of money for the land because of how much it might be worth for new houses at a later time).

 

[Harlesden]

Houses in Grimsby, North Lincolnshire, seem like a bargain compared to similar properties down south. However, abysmal bus service and only hourly trains out of the place.

 

[maniacmartin]

You mean North East Lincolnshire

 

[St Rollox]

I bought a brand new 2 bedroom flat in Glasgow in 1991.
Put down a 10% deposit and paid the mortgage for 10 years.
In 2001 after selling it i was left in profit to the tune of £600.
The problem was the building was completely overpriced to start with.
Outside of the south east and certain other UK hot spots, buyer beware.

Btw, looked up a nearby flat recently.
It is worth about £10,000 more than i paid 22 years ago.
You'd have been better putting the money in an ISA.

 

[maniacmartin]

You also got the benefit of somewhere to live for 10 years. That is worth a lot more than #600

 

[soil]

The issue in London is foreign money. Many said prices were too high a decade ago, but they reckoned without foreign cash. As long as foreign cash continues to flood in prices can continue to rise and more foreign cash will continue to flood in.

It would take a global recession to end that.

 

[ainsworth74]

Well unless the US Government gets its act together we might get one of those...

 

[Captain Chaos]

The issue in London is foreign money. Many said prices were too high a decade ago, but they reckoned without foreign cash. As long as foreign cash continues to flood in prices can continue to rise and more foreign cash will continue to flood in.

It would take a global recession to end that.

Not even that stopped them though really, did it? It slowed it down, prices dropped a bit but that was it really. Foreign money still bought property.

The only way it will probably end is a more severe global recession. Maybe even depression. Property is always a popular investment choice and you would need things to really go Pete Tong to stop things as they are now.

Round my way the average price of a 2 bed place would set me back probably around £160k. Based on a normal lending rate of 3x annual earnings (including Sundays, Commission and overtime) I would be lucky to get £120k mortgage. I'd be more likely to be offered £90k. Where am I going to find a place for that value in the South East? I have little to no hope of ever owning my own home.

 

[Manchester77]

I'm not familiar with the London housing market but having watched programs such as Location Location I was shocked to see a house comparable to mine (3 bed semi) cost almost twice that as it does here in manchester! I knew prices wee higher but I never really thought they would be so much higher.

 

[Butts]

I bought a brand new 2 bedroom flat in Glasgow in 1991.
Put down a 10% deposit and paid the mortgage for 10 years.
In 2001 after selling it i was left in profit to the tune of £600.
The problem was the building was completely overpriced to start with.
Outside of the south east and certain other UK hot spots, buyer beware.

Btw, looked up a nearby flat recently.
It is worth about £10,000 more than i paid 22 years ago.
You'd have been better putting the money in an ISA.

Or a flat in Edinburgh or Aberdeen

 

[soil]

Not even that stopped them though really, did it? It slowed it down, prices dropped a bit but that was it really. Foreign money still bought property.

There wasn't really a global recession. Commodity prices rose and Asia got much richer.

 

[Mojo]

Round my way the average price of a 2 bed place would set me back probably around £160k. Based on a normal lending rate of 3x annual earnings (including Sundays, Commission and overtime) I would be lucky to get £120k mortgage. I'd be more likely to be offered £90k. Where am I going to find a place for that value in the South East? I have little to no hope of ever owning my own home.

Typically you should be able to borrow four times as much as your salary. I totally agree with you though as to how difficult it is. I'm looking at buying in the next 3 or so years but I will have to move way out of London and commute in. Even from February I will have to look at renting again as my current flatmate will be moving on. I'm really struggling to find anywhere affordable that is in reasonable condition for my budget, anywhere near an Underground station.

 

[soil]

I'm not familiar with the London housing market but having watched programs such as Location Location I was shocked to see a house comparable to mine (3 bed semi) cost almost twice that as it does here in manchester! I knew prices wee higher but I never really thought they would be so much higher.

It's not difficult to check prices really.

A fairly non-descript suburb such as Surbiton (zone 6) will be much more than double the price.

Here's a small terrace sold for £225k in 2000, £480k in 2008 and then £560k in 2013:

http://www.rightmove.co.uk/house-pr...l?prop=26145897&sale=49412489&country=england

In many areas of the country you could get something similar for a quarter of the price, never mind half.

This is a council flat in a tower block located in an area with very high deprivation, unemployment and close to one of the world's most notorious prisons. It's an absolute f***ing hole and it's a quarter of a million quid:

http://www.rightmove.co.uk/house-pr...tml?prop=39840938&sale=491101&country=england

The current 'house prices booming' stuff is a bit of a nonsense really. There was an unprecedented bubble under Labour where house prices rose massively while retail prices didn't. This hadn't happened in the past, wage inflation always caught up. We are really still dealing with the effect of Labour's policies rather than any fresh crisis.