The discgrace that is the UK Property Market
Discussion
http://www.rightmove.co.uk/property-for-sale/prope...
Sixty-nine thousand pounds for a "studio apartment" that is little bigger than an average sized bedroom. I feel so desperately sorry for youngsters today, when they'd need 10k deposit and a 20k salary to live in this despicable little slave-box.
Many people of my generation (born in the 60's) say that they also had it tough, but I'm sure that a decent deposit and a young person's salary bought more than this shameful excuse for a home.
Anyone who thinks that this sorry little housing bubble is going to go on forever is living in cuckoo land, and I'd be amazed if the agents showing someone this place would feel anything other than pity and embarrassment when showing this to a prospective buyer.
Sixty-nine thousand pounds for a "studio apartment" that is little bigger than an average sized bedroom. I feel so desperately sorry for youngsters today, when they'd need 10k deposit and a 20k salary to live in this despicable little slave-box.
Many people of my generation (born in the 60's) say that they also had it tough, but I'm sure that a decent deposit and a young person's salary bought more than this shameful excuse for a home.
Anyone who thinks that this sorry little housing bubble is going to go on forever is living in cuckoo land, and I'd be amazed if the agents showing someone this place would feel anything other than pity and embarrassment when showing this to a prospective buyer.
budfox said:
Many people of my generation (born in the 60's) say that they also had it tough, but I'm sure that a decent deposit and a young person's salary bought more than this shameful excuse for a home.
Most people of our generation (I was also born in the '60s) do not want to sort out this problem. To do so requires lots more houses to be built. We hate that idea because a large part of our paper wealth is in the value of our house. And we seem to have a natural tendency towards NIMBYism.Properly addressing the shortage in the housing supply would put a lot of us oldies in negative equity.
Countdown said:
Supply and demand I'm afraid.
supply of credit, and supply of houses, both of which are in easy government control.since the mid 90s, young people (pretty much anyone born since 1980) have been totally failed successive governments, the result of which is far, far more of their income going on housing (a pretty basic right...) than needs to.
http://www.theguardian.com/books/2013/aug/18/defau...
RealSquirrels said:
Countdown said:
Supply and demand I'm afraid.
supply of credit, and supply of houses, both of which are in easy government control.since the mid 90s, young people (pretty much anyone born since 1980) have been totally failed successive governments, the result of which is far, far more of their income going on housing (a pretty basic right...) than needs to.
http://www.theguardian.com/books/2013/aug/18/defau...
The issue with "the housing bubble" is that it's been bubbling for about forty years now. There was three to four years of downward pressure in the early nineties and another three to four from 2008 to 2012, but the trend has been inexorably upward for longer than could be described as a bubble.
In that time, interest rates, availability of credit, price/income ratios have all fluctuated and demand outstripping supply have remained constant. The only structural change in the market has been the repeal of the old rent acts creating a vibrant private rental sector. This has been a good thing economically as it has promoted mobility of labour and given many, many more 'grades' of property available to occupies beyond the stark council house/owner occupier choice available from 1945-1990. What this has meant is that houses that would originally only have found a retail market are now being bought as business propositions by landlords. This pushes property prices overall. This is good for some people and frustrating for others (those who would like to buy but can't afford to).
The reality is that, as a nation, we need to get over the idea that it is everyone's right to own their own home; it isn't. It is right that all should aspire to do so but it is economically and socially unwise to promote the idea that everyone should be able to do so and that the property market "must" undergo price correction to enable this, because it won't.
Between 1995 and 2007 the UK population increased by 5%, the housing stock increased by 10% and house prices increased by 350%, meanwhile mortgage lending by banks increased by 630%. Which of these figures is more likely to have led to a 350% rise in house prices: a 5% rise in population growth which is matched by an increase in supply of housing; or an unprecedented increase in mortgage lending from the banks?
http://blogs.independent.co.uk/2012/08/28/why-exac...
http://blogs.independent.co.uk/2012/08/28/why-exac...
ClaphamGT3 said:
The reality is that, as a nation, we need to get over the idea that it is everyone's right to own their own home; it isn't. It is right that all should aspire to do so but it is economically and socially unwise to promote the idea that everyone should be able to do so and that the property market "must" undergo price correction to enable this, because it won't.
I dont think the issue is everyone should have a right to own a home. Its the rapid house price rises built on the back up a bubble ( eg saw a house on rightmove before that was on for 360k bought I 2000 for 103k nothing done to it , now wages havent risen anywhere near that level in the past 12 years.)The current government is trying to create a housing bubble (for political reasons) ,if peoples houses go up in value they feel wealthier and spend more money(like 2007 again) .Its a short term solution thats it , its just another policy built on more borrowing and more debt ,.It will be interesting to see what happens when interest rates eventually rise and all these deposit schemes finish.
jonny70 said:
ClaphamGT3 said:
The reality is that, as a nation, we need to get over the idea that it is everyone's right to own their own home; it isn't. It is right that all should aspire to do so but it is economically and socially unwise to promote the idea that everyone should be able to do so and that the property market "must" undergo price correction to enable this, because it won't.
I dont think the issue is everyone should have a right to own a home. Its the rapid house price rises built on the back up a bubble ( eg saw a house on rightmove before that was on for 360k bought I 2000 for 103k nothing done to it , now wages havent risen anywhere near that level in the past 12 years.)The current government is trying to create a housing bubble (for political reasons) ,if peoples houses go up in value they feel wealthier and spend more money(like 2007 again) .Its a short term solution thats it , its just another policy built on more borrowing and more debt ,.It will be interesting to see what happens when interest rates eventually rise and all these deposit schemes finish.
So the question is, will the current price trend continue, with more renter occupiers renting from BTL owners, will prices re-adjust to some notional price/income ratio that is judged "sustainable, or will it be somewhere in between?
RealSquirrels said:
the very rapid increase in house prices (vs wages) started in the 1990s, not the 1970s.
I'm sorry, but that's just not true. Any metric within the property development industry and within economic history, will take the early 1970s as the point at which the exponential growth in residential property values in relation to incomes began. Even as long ago as the late 80's when I was studying the economics of property development, this was recognized as a near-enough irreversible long term trendHave things really changed that much?
I was also born in the early 60's, and my wife and I purchased our first house in '83 at the age of 22. Took the max mortgage we could get (2.5 x joint salary) to buy in Aylesbury. After we had paid the mortgage we didn't have a pot to pi55 in. No nights out, no holidays, 15 year old car, always skint before the end of the month etc etc.
My job moved us to the East Midlands 2 years later and we sold up for double what we paid.
Both my daughters have purchased in the last three years with there partners, both when aged 24, one of them within the M25. They both have holidays each year, weekends away, nights out, latest i phones, sky tv etc etc. Neither of them, or partners earn more than £35k a year. Yes they are also skint at the end of each month, but the life style they expect and enjoy is far better than the one my wife and I had 30 odd years ago when we started out.
I was also born in the early 60's, and my wife and I purchased our first house in '83 at the age of 22. Took the max mortgage we could get (2.5 x joint salary) to buy in Aylesbury. After we had paid the mortgage we didn't have a pot to pi55 in. No nights out, no holidays, 15 year old car, always skint before the end of the month etc etc.
My job moved us to the East Midlands 2 years later and we sold up for double what we paid.
Both my daughters have purchased in the last three years with there partners, both when aged 24, one of them within the M25. They both have holidays each year, weekends away, nights out, latest i phones, sky tv etc etc. Neither of them, or partners earn more than £35k a year. Yes they are also skint at the end of each month, but the life style they expect and enjoy is far better than the one my wife and I had 30 odd years ago when we started out.
ClaphamGT3 said:
RealSquirrels said:
the very rapid increase in house prices (vs wages) started in the 1990s, not the 1970s.
I'm sorry, but that's just not true. Any metric within the property development industry and within economic history, will take the early 1970s as the point at which the exponential growth in residential property values in relation to incomes began. Even as long ago as the late 80's when I was studying the economics of property development, this was recognized as a near-enough irreversible long term trendas you say, house prices are a result of a market. But there are plenty of markets that we control to make sure hat they do not become unbalanced or distorted, e.g. we prevent the formation of monopolies. Why should the same not be the case with housing (which is probably one the country's/individuals greatest needs).
Edited by RealSquirrels on Sunday 18th August 15:27
RealSquirrels said:
ClaphamGT3 said:
RealSquirrels said:
the very rapid increase in house prices (vs wages) started in the 1990s, not the 1970s.
I'm sorry, but that's just not true. Any metric within the property development industry and within economic history, will take the early 1970s as the point at which the exponential growth in residential property values in relation to incomes began. Even as long ago as the late 80's when I was studying the economics of property development, this was recognized as a near-enough irreversible long term trendas you say, house prices are a result of a market. But there are plenty of markets that we control to make sure hat they do not become unbalanced or distorted, e.g. we prevent the formation of monopolies. Why should the same not be the case with housing (which is probably one the country's/individuals greatest needs).
Edited by RealSquirrels on Sunday 18th August 15:27
there is far too much state regulation of markets as it is, including in the housing market, without further state meddling and also, whilst a home is a need, home ownership most definitely isn't; that is what the affordable housing sector is there to provide.
I live in Japan, that place looks nicely sized to me! I suspect the small rooms and accommodation trend will only continue in order to make housing 'affordable' for young people. I think £200k is considered affordable by the government officially, but anyone on even a national average salary would argue that £200k is affordable.
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