House prices are insane

["slow horse" aka "another sam"]

We all know this; but we've all got houses, and many if not most of us don't want the prices to tumble unless and until we're good and ready. Not that there are signs of a crash anytime soon.

Did I just say we're all homeowners? Actually, I'm not. In fact I've been renting for my entire adult life, first in the US, where at one time my wife and I lived in an apartment in New Jersey with a view of the Statue of Liberty outside our kitchen window and splendid transport links to Manhattan across the Hudson River.

After we moved to London we lived across the Thames from the Tate Modern (not my favourite, it must be said), and enjoyed first rate seats to the "river of fire" (not so much) when the clock struck 2000. My point is, renting has allowed us to live in some great places. But as we all know, there's no security for a renter in the private market, particularly in the UK. Our apartment in New Jersey was rent controlled.

We started looking to buy around 2001, and put an offer on a house that in retrospect would have been a nightmare, but at the time we were quite keen. We waited and waited for the owners to finish whatever it is they had to do and move on with the sale. Eventually they dropped out of the process... only to immediately put it back on the market for £50,000 more, or a 25% markup. That's when we first knew something was wrong with the housing market.

Since then prices have gone from silly to crazy to silly crazy to insane to WTF to infinity and beyond. We will, in short, never own a house. Our choice not to get on the ladder (a word I despise in this context) all those years ago, and we'll have to take our lumps, but it really shouldn't be this way. I could move back to my hometown in the States and almost buy a mansion for what a dreary 2 up 2 down even in relative nowheresville would cost here. Of course, I know why that is, but prices here are still out of all proportion to reality.

What's the answer? Personally, I think a land value tax might be a start...

 

["slow horse" aka "another sam"]

I got the idea for this while walking by some new builds this afternoon. Imagine coming home after a hard day's work, pulling your keys out of your pocket as you prepare to go through the gate of your miniature white picket fence, then watching with horror as they slip through your fingers into the almost perfectly placed grate. I hope the house itself has been more thoughtfully designed.

on edit: "many if not most of us don't want the prices to tumble unless and until we're good and ready" should have read "most if not all". I've certainly heard people say they'd like prices to fall so their kids can get on the L-word, but they're probably in the extreme minority.

 

[BoldonLad]

Depending on where you live, house prices, relative to incomes, are not massively different.

 

[Psamathe]

Except today report that house building has slowed because of weak demand.

UK construction grows but housebuilding decline threatens government targets
Construction firms say high borrowing costs and weak consumer confidence hitting housebuilding demand
(from https://www.theguardian.com/uk-news...building-decline-threatens-government-targets)

I own my property but do feel that there is too much pressure of people to "get on the housing ladder". Owning a home can at times be a real millstone. At times I've ended up spending a fortune and hours commuting from where I "owned" to where I worked (eg daily commute Oxford to London or Oxford to Wokingham or Oxfrod to Chippenham. Daft and I'd have been much better off renting but it seem too expected that you must own.

Of course owning is right for some but not everybody yet "everybody" seems under pressure to buy. I didn't buy until quite late (middle age) whereas these days we seem to have 17 year old moaning 'cos they want to get "on the housing ladder" but the Universal Benefit amounts limits their available properties.

Ian

 

["slow horse" aka "another sam"]

Depending on where you live, house prices, relative to incomes, are not massively different.

FWIW, salaries in my neck of the woods average £35.5k. The cheapest new build in the development above is £385k; the cheapest accommodation to be found in the area is a small flat for £200k.

 

[Psamathe]

One of the challenges Labour will be facing trying to get more houses built it's more complex that "number of houses". what is important is available houses for people to buy. Many can't affort high end 4+ bedroom houses with gardens and garages. But builders really really want to build those luxuary end houses 'cos that wher ethe profit lies.

Developers develop for profit not to meet Labour's targets. Currently loads of plots with planning permission not being built on. Developers are not going to develop low end cheaper properties to keep Labout Head Office happy, they'll just do the profitablwe stuff.

I actually attended a Council Planning Meeting and talked against a Planning Application; application was by a developer of a <20 house small residential development that the original permission included 4 (maybe 5) "Affordable Homes". Builder decided that whilst the development with those affordable homes was profitable they wanted more profit so were applying to change the affordable homes into normal full priced homes. I objected 'cos the village needs affordable housing but Planning Committee "waved it through" on the basis that they need to keep developers "sweet and profitable". My argument was carrying out a development is a commercial risk and they decided to take that commercial risk and the village should not be guaranteeing their profits and they were making profits anyway.

Ian

 

[AuroraSaab]

Consecutive governments have let the housing market get completely out of control, both Labour and Tory. It suited them to let us think we were all reaping the benefits of a growing asset when all that's happened is lots of our kids can't afford to buy. Our gain is their loss. I'd start with banning foreign investors buying up UK property and forcing house builders to do more for affordable housing. At the minute they can build an estate with just a token miniscule number of affordable properties.

 

[BoldonLad]

FWIW, salaries in my neck of the woods average £35.5k. The cheapest new build in the development above is £385k; the cheapest accommodation to be found in the area is a small flat for £200k.

I think the clue is in the phrase “depending where you live”, which is why I used it. In this area, it is perfectly possible to by a 3 bed semi in a reasonable area for £140-180k

 

[icowden]

and forcing house builders to do more for affordable housing. At the minute they can build an estate with just a token miniscule number of affordable properties.

How would you do that? House builders aren't doing it for fun, they are doing it for profit. Every affordable house reduces their profit. If it isn't profitable enough they just won't do it.

One thing I do think should be changed is building with segregation. Often the "affordable" housing will be built so that the owners of the expensive housing (usually flats) don't have to see, or mingle with the "affordable" owners. This just promotes division and disharmony.

 

[Beebo]

One thing I do think should be changed is building with segregation. Often the "affordable" housing will be built so that the owners of the expensive housing (usually flats) don't have to see, or mingle with the "affordable" owners. This just promotes division and disharmony.

It’s called the Poor Door.
London apartments with flashy entrances often have a much less salubrious entrance at the side where the council tenant go.

 

[AuroraSaab]

Don't give them planning permission if their commitment is only a token number of affordable houses. This is going to be an issue for Raynor and her plan to build hundreds of thousands of houses. Builders will want to build £600k houses in pretty villages. They won't want to build £150k houses on brownfield sites. I honestly don't know of a quick solution that helps younger buyers but doesn't end up crashing or stagnating the market.

 

[spen666]

Don't give them planning permission if their commitment is only a token number of affordable houses. ......

I can understand your position, but if any government take this approach, then the media / opposition parties will say the government is causing a bigger housing crisis by preventing homes being built.

The developers will not build expensive houses if they cannot sell them, so there must be a market for these sort of homes


There is no easy solution, and no single suggestion will resolve all the issues

 

[matticus]

Anyone know about this sort of thing?
https://www.coophomes.coop/

Are they a magic wand to get us out of this mess??

 

[Psamathe]

How would you do that? House builders aren't doing it for fun

Don't give them planning permission if their commitment is only a token number of affordable houses.

I can understand your position, but if any government take this approach, then the media / opposition parties will say the government is causing a bigger housing crisis by preventing homes being built.

Maybe enable local Councils to build houses ... for rent. Crucial thing is for people to have somewhere decent to live at a price they can afford.

Ian

 

[AuroraSaab]

It would help but I'm not sure many councils have the money to do that anymore. I think I read more council houses were built under Thatcher than any government since. They then abandoned that model - councils building homes - and it will be a lot harder to start it up again than it would have been to keep it going. One effect of it is that there will be elderly people in council housing who would like to downsize to a flat or council sheltered accommodation but these are few and far between in most areas. The current state of the housing/renting market is one of the biggest domestic failings of successive governments over the last 40 years imo.