House prices?

[Digby232]

So why are houses, in the south anyway, selling so fast and at asking price and in some cases over asking price. In a few months when job cuts really start to bite and the recession gets deeper prices will drop as no one will be able to afford the current prices. Makes no sense at all. Not just the low paid who are going to lose their jobs. Will filter through to top jobs as their business will slowly dry up.

[tintin100]

Pent up demand , low interest rates plus the government stamp duty holidays are not helping matters. The real picture will probably come next summer.

[bhudda]

I didnt realise they were ... maybe i should sell up and move somewhere warmer and cheaper with women with loose morals ... oh hang on, half the house belongs to the wife 

[allroadboy]

In the days of working at your desk 5 days a week in the City an acceptable commute was seen as one hour. Today as you sit at your desk in your home study 4 days out of 5 an acceptable commute has become 90 minutes, so the London net is widening.

[workinallweek]

 A lot of sales didnt happen due to covid restrictions   as for prices some people have banked a few quid from the government money ( our money)  so thats helping . Banks are hooking people in with low deposit schemes etc .
and of course the stamp duty cut ...
Will it continue ?  no  property is really on a 10 year cycle so its getting near a downturn ...

[PatMacGroin]

In the days of working at your desk 5 days a week in the City an acceptable commute was seen as one hour. Today as you sit at your desk in your home study 4 days out of 5 an acceptable commute has become 90 minutes, so the London net is widening.

I think the impact of the new Working From Home behaviour shift is going to be visible on property prices outside that 90 minute commuter zone.

Many of the desirable UK holiday destinations already had a strong housing market (e.g. much of Cornwall). I would not be surprised if prices in those areas stayed strong and even increased, in spite of any long predicted national down turn. In addition to working from home, the shadow of the virus and other future pandemics, or lockdown situations, will have people thinking about the outdoor spaces accessible from their homes. Any would-be investors would do well to keep an eye on prices around natural beauty spots and seaside towns.

[willie loman]

pent up demand is clearly a factor, i would expect a fall in prices next year, a lot of unemployment and underemployment, seeing no end of to let signs, and a fair few for sale signs, as airbnb owners move out of a compromised market.

[PatMacGroin]

So why are houses, in the south anyway, selling so fast and at asking price and in some cases over asking price. In a few months when job cuts really start to bite and the recession gets deeper prices will drop as no one will be able to afford the current prices. Makes no sense at all. Not just the low paid who are going to lose their jobs. Will filter through to top jobs as their business will slowly dry up.

As already mentioned the pent up demand is having a big impact. But I really do think the Stamp Duty holiday is also having a disproportional impact. And one of the main reasons for that is that people in general are not good a maths.

If people are told they are saving £5-10k on the tax, then they feel like it's fine to spend £10-£20k extra on the house. Completely oblivious to the fact that this means they are actually spending more money than they would have done before the Stamp Duty holiday was introduced. (And probably on the exact same house).

People can be unduly influenced by the idea of a bargain. Especially, if they feel like there is sale on for "a limited time only". Or even because they like the idea of getting one over on the tax man. Similar techniques have been used to drive sales since the invention of currency, probably even before that.

[PatMacGroin]

pent up demand is clearly a factor, i would expect a fall in prices next year, a lot of unemployment and underemployment, seeing no end of to let signs, and a fair few for sale signs, as airbnb owners move out of a compromised market.

Many of the AirBnB'ers will definitely be re-evaluating their situation. With travel and tourism going down the toilet they can't rely on earning from those properties anymore. Some of them will be turning to the rental market, others will put them up for sale.

Edit: Which I just realised is basically repeasting exactly what you said! 

[allroadboy]

Many of the AirBnB'ers will definitely be re-evaluating their situation. With travel and tourism going down the toilet they can't rely on earning from those properties anymore. Some of them will be turning to the rental market, others will put them up for sale.

Edit: Which I just realised is basically repeasting exactly what you said! 

Sorry to disagree, but the 3 or 4 people I know with second homes have all said they are booked out for the rest of the year compared to approx 50% of the time in normal times

[threechilliman]

Sorry to disagree, but the 3 or 4 people I know with second homes have all said they are booked out for the rest of the year compared to approx 50% of the time in normal times

Doesn't surprise me. I had a job finding somewhere to stay in the UK later in the year.

[GreyDave]

Many of the AirBnB'ers will definitely be re-evaluating their situation. With travel and tourism going down the toilet they can't rely on earning from those properties anymore. Some of them will be turning to the rental market, others will put them up for sale.

Edit: Which I just realised is basically repeasting exactly what you said! 

Er Noooo!... I was working in refits and most of my customers I`d say over half of them (maybe 20 odd ) all have Holiday homes or second peid a terre as the ponucey ones say and they where booked up or  using them .... In August 2 kindly offered me a long weekend in their flats free one just outside of Brighton ( few weeks ago in that mini heat wave it was great) and other which Id been to in past but turned down in Seahouses Northhumberland ..Ok I was asked to give it the once over and list any thing needed doing  Nothing  and I ate Fish n chips out  The elderly owner said this to me...

Its looking like its going to go back to were only the well off and conected can hoilday think "Sawallows and amazons " type and Famous Five ...I laughed but as I thought a bit well there that expensive Rock in Cornwall and Whistable Oyster festival and Waleswick Suffolk  ( all those WOKE BBC people there ) So maybe just maybe he is right ...just heard on Wireless teres gonna be a tax on short flights common people wont be able to fly

[Strawberry]

Er Noooo!... I was working in refits and most of my customers I`d say over half of them (maybe 20 odd ) all have Holiday homes or second peid a terre as the ponucey ones say and they where booked up or  using them .... In August 2 kindly offered me a long weekend in their flats free one just outside of Brighton ( few weeks ago in that mini heat wave it was great) and other which Id been to in past but turned down in Seahouses Northhumberland ..Ok I was asked to give it the once over and list any thing needed doing  Nothing  and I ate Fish n chips out  The elderly owner said this to me...

Its looking like its going to go back to were only the well off and conected can hoilday think "Sawallows and amazons " type and Famous Five ...I laughed but as I thought a bit well there that expensive Rock in Cornwall and Whistable Oyster festival and Waleswick Suffolk  ( all those WOKE BBC people there ) So maybe just maybe he is right ...just heard on Wireless teres gonna be a tax on short flights common people wont be able to fly

Rumour here is that second homes will be popular as 'Covid-19' pads, either for owners or holiday lets. As soon as accomodation was allowed to operate, as you say it was all fully booked very quickly. Lakes full within a few weeks. Whether this is purely pent up restriction, or whether it will continue only time will tell.

[PatMacGroin]

Sorry to disagree, but the 3 or 4 people I know with second homes have all said they are booked out for the rest of the year compared to approx 50% of the time in normal times

Er Noooo!... I was working in refits and most of my customers I`d say over half of them (maybe 20 odd ) all have Holiday homes or second peid a terre as the ponucey ones say and they where booked up or  using them .... In August 2 kindly offered me a long weekend in their flats free one just outside of Brighton ( few weeks ago in that mini heat wave it was great) and other which Id been to in past but turned down in Seahouses Northhumberland ..Ok I was asked to give it the once over and list any thing needed doing  Nothing  and I ate Fish n chips out  The elderly owner said this to me...

Its looking like its going to go back to were only the well off and conected can hoilday think "Sawallows and amazons " type and Famous Five ...I laughed but as I thought a bit well there that expensive Rock in Cornwall and Whistable Oyster festival and Waleswick Suffolk  ( all those WOKE BBC people there ) So maybe just maybe he is right ...just heard on Wireless teres gonna be a tax on short flights common people wont be able to fly

I stand corrected, and I am willing to admit when I am wrong. I was focusing on international holiday makers renting AirBnB's and totally disregarded the strength of the domestic holiday market.

I do wonder if the London AirBnB properties are also seeing high demand? I imagine their market was largely a mix of foreign tourists, plus those that like to mini break in London for a bit of shopping, a nice meal and a trip to the theatre. With most theatres still closed, and many other tourist attractions operating on limited capacity, are high end shopping and restaurants still enough of an attraction? (For foreign and/or domestic visitors?)

[cmspunk]

I put my place on the market only last week, had 3 offers and 1 has been accepted already. Think I done it at the right time

[Digby232]

Right time if your just taking the cash or downsizing but if buying another property it’s all relative as one your buying is high too!.

[orthopod]

Stamp duty holiday seems to have energised the market and punters think they can pay 15% more for a house to save 5% on stamp duty.

Also, I keep reading on forums that a lot of people are worried about being made redundant and are bringing forward their plans to move to a bigger house so they can get a mortgage in place which is not easy if you are not in a job 

[Digby232]

Idiots! Let’s get a mortgage in place before losing my job!!Time to sit tight, save every penny incase lose your job. Prices will plummet and you could be in negative equity. Have to sell your home and still owe thousands!  No fucker will help you then!!

[Payyourwaymate]

Pent up demand , low interest rates plus the government stamp duty holidays are not helping matters. The real picture will probably come next summer.

+1. The government will do all they can to keep the housing market afloat. The day that crashes pandemonium will break lose.

[workinallweek]

Stamp duty holiday seems to have energised the market and punters think they can pay 15% more for a house to save 5% on stamp duty.

Also, I keep reading on forums that a lot of people are worried about being made redundant and are bringing forward their plans to move to a bigger house so they can get a mortgage in place which is not easy if you are not in a job 

insurance is available to cover that ..

[Digby232]

Insurance won’t pay forever. You might not get another job or not one that pays enough to cover the mortgage.7

[Gordon Bennett]

Where is the evidence of this febrile housing market? If it's data from Land Registry then that's fair enough. However, if its from vested interests like lenders, insurers or estate agents etc I wouldn't believe a word of it..... anybody whose livelihood depends on the housing market is obviously going to talk it up and try to whip up hysteria.

[MilleMiglia]

+1. The government will do all they can to keep the housing market afloat. The day that crashes pandemonium will break lose.

I'm old enough to remember the boom and bust of the late 80's/early 90's, so when prices began to take off @'98, and looked overheated by the turn of the millennium, I thought a correction was imminent. How wrong I was.....

[Payyourwaymate]

I'm old enough to remember the boom and bust of the late 80's/early 90's, so when prices began to take off @'98, and looked overheated by the turn of the millennium, I thought a correction was imminent. How wrong I was.....

It's insane, there was a person I was told about that bought a house in hyde park corner (London) for 80-100K many years ago and sold it for £3.2million a couple years ago. That person is not the only one, there are several. You can never beat returns like that unless you gamble or win the lotto. For a lot of people that bought properties in that era as investments, I bet if they did not mess it up and were over leveraged during the downturns they are legitimate millionaires now.  Financially average people in terms of income and "wealth", looking to buy a house in the pricey parts of the UK do not have a chance in hell without the "Bank of Mum and Dad" if they have well off parents, or having a good job and overleverage on the mortgage. It's sad really. Especially now that we are in an era where having guaranteed income for 25 years to pay off a mortgage is looking less likely to be possible as time goes on with automation/AI, constant restructuring and outsourcing of jobs and no more "jobs for life" as in the old days.

Fred harrisons books, explains all about how the housing system in the UK is messed up.

Just some of his videos I could find, I have listed below. He is not really talked about and there is not much about him video wise, but I think he is a credible person in his subject matter from what I have read of his books.


Ricardo's Law ~ The Great Tax Clawback Scam

External Link/Members Only


Fred Harrison: A Land Tax Is Overdue

External Link/Members Only



Fred Harrison & Michael Hudson Discuss Debt and its Relationship to the Economic Crash

External Link/Members Only

[MilleMiglia]

Certainly in terms of hard cash, and probably in terms of percentages as well, the most outrageous one I've heard about concerned a property in Holland Park. It was purchased in '99 for £870K (so never a run of the mill property to begin with), then sold in 2014 for £18.7 million.

A somewhat more anecdotal (but far more relevant to most people) story concerns a guy who bought a 2 bed flat in Sheffield in the mid '80's. After a couple of years, with a slight increase in the value of the flat, and by slightly increasing his borrowing, he was able to purchase a similar property in Knightsbridge (he mentioned that his nearest "Off Licence" was Berry Bros and Rudd). I'm guessing that making a similar move ceased to be possible quite some time ago. 

Thanks for the links-I will indulge over the weekend.

[Malvolio]

Hunter Davies did better than that - paid £5,000 for his house in 1963 and it was worth £3 million in 2017.

External Link/Members Only

[Blackpool Rock]

I'm old enough to remember the boom and bust of the late 80's/early 90's, so when prices began to take off @'98, and looked overheated by the turn of the millennium, I thought a correction was imminent. How wrong I was.....

While I accept that there have been times when property would have been a good investment if you were able to buy low just before a boom the opposite is also true if you bought when the price was high due to "Having to get your foot on the ladder" just before a downturn.

London is a market in it's own right and tends to have larger swings which then ripple out across the country however I believe London has been more subdued since the Brexit referendum as many foreign investors no longer see or saw it as a good place to invest in property.

There is an almost universal belief that if people had invested in property they would now be rolling in it however this isn't necessarily the case -
This chart on average house prices indicates an average rise of 2.9% between 1975 and 2019 (adjusted for inflation which I believed averaged 5.0% in that same time frame)
External Link/Members Only

However the chart in this article shows how the FTSE all share has outperformed house prices between 1990 and 2020
A perception has built up over many decades that residential property prices outpace other assets, such as shares, but the reality is much more complicated than that. In fact, measured at a headline level, aggregated returns from property have struggled against shares.

For example, the chart below shows the level of the house price growth since 1990 versus the FTSE All-Share over the same period. It shows that in the period to April 2020, the House Price Index rose by around 266%, whereas the FTSE All-Share rose 723% with income reinvested.

External Link/Members Only

[binbag]

I bought my modest dwelling for 50k in late 80s. Worth half a million now.

[MilleMiglia]

Sadly, my posts are not about property as an investment; rather, I'm bemoaning the fact that house prices have increased out of all proportion to income, and disenfranchised a large proportion of the population as regards home ownership, without outside assistance (BOMAD, etc). 

[Blackpool Rock]

Sadly, my posts are not about property as an investment; rather, I'm bemoaning the fact that house prices have increased out of all proportion to income, and disenfranchised a large proportion of the population as regards home ownership, without outside assistance (BOMAD, etc).

The thing we have to remember though is that it's always been a struggle for most average people to get a foot on the housing ladder, my parents 1st house cost about £2K which would possibly now buy the garden shed.
Originally the amount you could borrow was based solely on the mans wages and didn't count overtime etc and you could only borrow say 3 times your wage from the lender.
Over the years the ratio you could borrow increased 3.5 times; 4 times; 5 times and overtime / bonus was considered along with both wages, naturally as you can now borrow more you can afford a more expensive house which is bigger / better but very soon you can only afford the same house as you could originally just at twice the price, 110% or 120% mortgage anyone taken out over 35 years until you're 70 

Ultimately it's market forces and there are a lot of things which influence it, unemployment; wages; inflation; interest rates; rent prices and availability of both rental and new houses.

Regarding new houses I think this is a major part of the problem, some of these firms make mega Millions but as far as I can see the quality is crap and they are overpriced.
Even considering that land prices and wages are higher in the UK than somewhere such as Spain I remember 20 years ago looking at the price I could buy a Villa for over there which was both larger and cheaper than a new build 2 bed apartment in the UK

My mate lives in a lovely 1930's semi which still has some original features such as leaded glass bay windows and ornate plaster ceilings, the place has real character but his wife wants to move to a new build.
He says the new houses they have looked at are smaller and built out of crap materials with paper thin walls, the driveway was already crumbling on one 
I consoled him by saying one he sold his and bought the new one at least he'd have some spare cash left over only to find out the new one is £40 more expensive 

[Strawberry]

Isn't the housing ladder currently an outdated term, the market has changed the first rung is for most people very high then it's much of a muchness?

[Blackpool Rock]

Isn't the housing ladder currently an outdated term, the market has changed the first rung is for most people very high then it's much of a muchness?

What's the current term?

[Payyourwaymate]

Isn't the housing ladder currently an outdated term, the market has changed the first rung is for most people very high then it's much of a muchness?

I personally think the term "housing ladder" is just a concept, one of the mechanisms created to have people in a rat race to buy houses, move on to better houses and create the idea that owning a home is the end all to help keep the money in the property market flowing. It's a perfect complement to the consumer economy that we all live in to keep people spending money.

Many people hurry to save money for a deposit and then go broke just to get the mortgage on the house. Not knowing that owning a home is a continuous expense with many unforesceen variables that can turn earning a home into a long winded stress. The main winners are the banks making a killing off the mortgages they sell, the property developers and land bankers. Sure people get homes, a bit of security of a roof over their head as long as they can make the payments, but at a considerable cost of having to give the prime period of their lives working to pay it off. 

Where does the ladder start? Where does the ladder even end? Why is it even called a housing ladder?

You move up the ladder towards what? If you moved down what do you move down towards? Homelessness?

I agree, it's outdated but sounds nice. Makes it seem as one is progressing when one says I'm on the housing ladder.

[Blackpool Rock]

I personally think the term "housing ladder" is just a concept, one of the mechanisms created to have people in a rat race to buy houses, move on to better houses and create the idea that owning a home is the end all to help keep the money in the property market flowing. It's a perfect complement to the consumer economy that we all live in to keep people spending money.

Many people hurry to save money for a deposit and then go broke just to get the mortgage on the house. Not knowing that owning a home is a continous expense with many unforesceen variables that can turn earning a home into a long winded stress. The main winners are the banks making a killing off the mortgages they sell, the property developers and land bankers. Sure people get homes, a bit of security of a roof over their head as long as they can make the payments, but at a considerable cost of having to give the prime period of their lives working to pay it off. 

Where does the ladder start? Where does the ladder even end? Why is it even called a housing ladder?

You move up the ladder towards what? If you moved down what do you move down towards? Homelessness?

I agree, it's outdated but sounds nice. Makes it seem as one is progressing when one says I'm on the housing ladder.

So do you rent 
Even as a kid I was aware of the phrase that renting was "Dead money", basically you're paying rent for the rest of your life but still don't own a single brick.
I believe that back in the 60's rents may have been relatively cheap but that's not necessarily the case now and i've heard of people whose rent is more / month than they would pay in mortgage repayments if only they could get the deposit together 

I had my mortgage paid off in 15 years by making over payments since which time i've been banging money into stocks but I can pnly do that because I bought and didn't rent

[Payyourwaymate]

So do you rent 
Even as a kid I was aware of the phrase that renting was "Dead money", basically you're paying rent for the rest of your life but still don't own a single brick.
I believe that back in the 60's rents may have been relatively cheap but that's not necessarily the case now and i've heard of people whose rent is more / month than they would pay in mortgage repayments if only they could get the deposit together 

I had my mortgage paid off in 15 years by making over payments since which time i've been banging money into stocks but I can pnly do that because I bought and didn't rent

You are right. However...you lived in different times. You cannot apply what you were able to do then, for people living now. Too much has changed.

[tintin100]

So do you rent 
Even as a kid I was aware of the phrase that renting was "Dead money", basically you're paying rent for the rest of your life but still don't own a single brick.
I believe that back in the 60's rents may have been relatively cheap but that's not necessarily the case now and i've heard of people whose rent is more / month than they would pay in mortgage repayments if only they could get the deposit together 

I had my mortgage paid off in 15 years by making over payments since which time i've been banging money into stocks but I can pnly do that because I bought and didn't rent

In the 70's and 80's you could get a mortgage on 3 times your salary and get a house , you can't do that now, even in cheap parts of London is 500k for a house.