House prices rose 7.3% this year, average now almost £250k

[HACO]

https://www.thisismoney.co.uk/money...-prices-reach-250k-7-3-year-says-Halifax.html

Stamp duty holiday did its intended purpose, make housing even more unaffordable than it already was.

Since we're not building anywhere near the number of houses that we need to house our population, the stock for sale is ever decreasing, contributing towards the massive price hike.

Personally, I think we need a country-wide mobilisation effort, in the same scale that we'd do in a major war, to build houses, flats, skyscrapers and quite frankly, entire cities from scratch. We're already millions of homes short, and that doesn't even include the quality of our housing, which is one of the lowest in the developed world, despite being one of the most expensive.

 

[HACO]

But then they just sell them off again. Like they have done twice now :/

Yeah. Right to buy should go and never return.

 

[HACO]

You've completely ignored half of the headline from the article you linked. Here's the rest of it: mortgage approvals hit highest level since 2007
So if more people are buying houses, doesn't that mean they are more affordable?

Also, if the rate of approved mortgages is going up and the number of houses for sale is going down the ratio of mortgaged to unmortgaged houses is going up more. Generally, that's going to mean more homeowners and less cash-buyers adding to their portfolio.

Mortgage approval doesn’t mean buying. We’re at record low interest rates, most homeowners aware of this are refinancing. Several banks have confirmed high approval rates are almost exclusively due to refinancing existing mortgages.

 

[HACO]

The article you linked specifically says there are more mortgage approvals are for purchases and not remortgaging:

Mortgage application, not approval. Not all applications are approved, and not all approved mortgages actually complete a sale. It's pretty common to have multiple approvals (in-principle, from multiple lenders, expiration of offer, etc) before you actually buy something.

Further evidence of the lockdown mini-boom came as Britain's biggest mortgage lender said it recorded the highest level of approvals since October 2008, adding that it had also received more mortgage applications from both first-time buyers and home movers than any time since 2008.

Try to pay attention please.

 

[HACO]

why do you need to build cities from scratch?

people are unwilling to move as it is yet you want to enforce it?

you can buy a flat in cumbernauld for £10K.

rather than build a city from scratch why don't they all move to cumbernauld?

the average house price in Scotland is only £150k

And you can buy acres of land in the middle of Sudan for £100. We need to build where people want to live, cities within vicinities of areas that people want to live in. Just because people don't want to live in Cumbernauld doesn't mean new cities within 1 hour of London won't be attractive.

UK's housing shortage is in millions according to any report you want to read. 10 cheap flats in the middle of nowhere doesn't solve it as much as you want to pretend it does.

 

[HACO]

Answer: The UK and the rest of the world to get a grip on unsustainable population growth.
Sorted!

We're way past the point of no return on that. We should have got a grip on that in early 1900s. We need a Thanos now.

 

[HACO]

A decision in principle is not the same as an approval.

An application is also not an approval, you (willingly or unwillingly) confused them to make a point, which doesn't stand.

 

[HACO]

Its going to happen.

I believe its projected that the west will peak in population at 2050 ish

https://www.bbc.com/news/health-53409521

This is a good thing for the planet.
And also, at the rate of automation we won't need so many people. There won't be enough jobs. Almost feels like a natural population correction is coming. Like it does in nature.


Now, to keep house prices up we would have to welcome immigration. So potentially hereafterwards we will see a Japan style decline.

Personally, I don't think this house price climb can continue. But that all depends on long term employment/tax figures.
We have brexit and covid impact. It might be a short lived dip. But if those jobs don't come back (for example cinema dies) then who knows.

I also think the recent stamp duty break was/is disgusting.
Would have been better to fund a few percent of first time buyers deposits!

It absolutely is a great thing for the earth. Quite honestly, without this I don't think our civilisation would survive and we'd have gone extinct if 20th population growth levels were to repeat in 21st century.

I think house prices are completely decoupled from the economy, earnings and anything else. We're heading to a situation where income can't ever buy housing, and it's only inherited (or gifted) wealth that makes someone a homeowner. In that scenario, it never matters if someone is in employment or not, what matters is if someone have rich parents who are also homeowner class. Everyone else? Renters for life.

Just imagine if 7.3% growth were to be the norm, median house would be £720k within 15 years and £2m within 30 years. You may say this means it can't grow by 7.3% per year, I think it absolutely can when the government will do everything in their absolute power do ensure that they do.

We'll soon see no deposit mortgages, higher income multiples, lifetime mortgages, government insured mortgage packages, and other policies to make sure the property market will continue to grow.

 

[HACO]

There's a bit of an issue with that.

If you build where people want to live. Guess what, lots of people will want to live there, driving up demand (and so prices). Unless you artificially limit prices in these new desirable locations, they're just going to get bought by the highest bidder.

If you build enough of them, there will be supply for everyone for prices to remain reasonable. And people coming to those places will free up demand in other places. Demand isn't unlimited.

 

[HACO]

By buying up the housing stock to add to their portfolios, BTL landlords know exactly what they are doing. You know what you are doing, and it's pointless to pretend otherwise.

This is all there is to it. Every single person who acts like they don't understand this are just trying to hard to not understand. There's supply and demand, if you dry up all the supply by a combination of not building and BTL mega landlords buying up everything, it's pretty clear what happens to house prices for FTBs.

You can get a house for free if you don't want to work for it, this is the UK not India.

If you can't afford to live near your office you sacrifice until you can afford it, if you need to work harder also to do that then thats a choice we can also make.

Moaning does nothing.


There are issues with housing and prices in this country, but they are not the fault of landlords.

Wanting sensible policies that help people is not moaning. It's called progress. Any policy that benefited people started from those of us who pointed out to problems and searched for solutions, and those people faced opponents like you who blamed everything on the victims and told people to get over it.

The only people I see moaning are people who are triggered that others are mean to almighty landlords and don't have their best interest at heart. Do you want to turn landlords into a protected class? Would that stop you from moaning about how unfair everyone is to poor landlords? You're the one moaning while telling others (who don't moan) to stop moaning.

 

[HACO]

London is one of the cheapest places to rent relative to property value (~3.5% of the purchase price per annum rental yield, vs 5-5.5% somewhere like Manchester), so you've actually got a better opportunity to save in London than elsewhere

It makes no mathematical sense to buy in London versus renting. Rent is significantly lower than mortgages and if you invest the difference, you’re always ahead versus dumping money in a house. That just means prices are astronomical, likely thanks to foreign investors buying everything they can get their hands on.

 

[HACO]

Anywhere there is wealth people from poorer countries will flock to. Anywhere they speak English they will flock to as well as it's a universal language.

I'd wager places like Australia have mass immigration too due to it's wealth and it's English speaking. It's on the other side. But there aren't many countries in that region that speak English natively.

This however is very disproportionate in the UK. Just look at population densities (number of people per square miles):

South Korea: 1339
Japan: 862
UK: 725
Germany: 603
Switzerland: 539
France: 319
US: 87
Canada: 10
Australia: 9

Admittedly a lot of the land is not easily liveable in countries like Canada and Australia (also true of Scotland). However, the scale of this is just mind blowing and quite clearly shows UK population is way out of hand. I agree that we do have land to build, but we don't build.

Population projections show that we'll reach ~75 million in 25 or so years and that's excluding climate refugees and immigration from Hong Kong. Depending on how mass migrations from climate change work in this century, it's pretty conceivable that we'll get to ~150 million or more by the end of the century as UK will be prime target for African and Middle Eastern climate refugees, and there are 1.6b people living there (and growing fast).

So yeah, we have some land we can point out to, but nowhere near the amount we need for our out of control population now and in the future.

 

[HACO]

Plenty of space if you want to just concrete over everything... We are however a small island with high population density. If you discard places like Gibraltar, Monaco, Vatican City etc.. then England has the second highest in Europe, behind the Netherlands.

Third after Netherlands and Belgium.

 

[HACO]

Nope, per km^2, Belgium is 376, England is 424 and the Netherlands is 521.

You're right, Belgium is above the UK, below England.

 

[HACO]

The intention is nice, but I can't see how it would work in practice. If you get to the point where you foresee that you're going to lose your house to pay for care costs, then why wouldn't you just sell it and stick it all on black? You can't pass it on to your kids, so you may as well enjoy it!

So let them do it. That level of spending will stimulate the economy, fine. Also, if the house has appreciated in value, make them pay capital gains tax on it first.

It's absurd that a lot of us believe people who may have hundreds of thousands or millions in property wealth shouldn't have to sell their properties to pay for their case just because otherwise that's inheritance for their kids. If someone wants to blow through £500k+ worth of money, making themselves penniless, just to avoid paying £35k a year for their own social care, let them do it.

The absolute worst thing for the economy is to shield one asset class from taxation, means-testing, etc. and incentivise passing of it between generations as accumulated wealth. People should always be incentivised to spend their wealth, rather than accumulate it away from economic activities.

 

[HACO]

Yup, I'm sure the UK economy will benefit from pensioners spending tens/hundreds of thousands in Vegas.

That means we should build a Vegas here

I never said I believe they shouldn't have to, but it's the same as any other tax - the more you penalise, the more people will try to find ways to avoid it.

I'm not saying you say that, but so many people, including our PM, do. Any other asset appreciation is taxed, why not property?

Quite, if you're going to get that social care anyway, then why not enjoy the money you've got as well? Although £500k is pushing it. 10 years @ £35k/year would easily wipe out the value of a family home in most places outside of London.

Let it wipe the value. So what? Your (and my) children are not entitled to a big inheritance at everyone else's expense. If someone has hundreds of thousands of pounds, and needs to pay £35k a year for taking care of themselves, use their money.

The idea that people shouldn't need to use their wealth for their needs, just because that means they may have less to leave for their children, is bonkers.

 

[HACO]

https://www.theguardian.com/money/2020/dec/19/average-uk-house-price-rises-2020-covid-housing-market

Another piece of confirmation, house prices rose £13.3k this year. Earnings and GDP down, unemployment way up, and house prices just keep on increasing.

 

[HACO]

You do know this is actually how the way things work right?

In a pandemic would you expect employment to increase alongside wages?

Then you have governments borrowing and printing money to survive meaning assets increase in price alongside everything else.

Then add Brexit into the mix.

Your fixated on just house prices but have zero understanding of the bigger picture.

Guess what they will continue to increase thanks to quantitive easing. This isn't a conspiracy. We understand that you cannot afford to buy a mansion in London.

Rather than constantly complain about the same old thing every couple of weeks like a broken record do you have anything new to add? Or just regurgitating house prices have gone up because that gets boring fast.

Talking about a crisis that the country is facing is not an attack towards you so I don't know why you're so hostile and always want to make this personal.

If you don't like people talking about X, don't come to topics about X. It's weird that you're coming to topics, telling others that they shouldn't discuss something.

Im aware it's 2am on a Saturday night so there might be some simple explanation for why you're acting weird, it's probably time to chill out.

 

[HACO]

My 2 apartments in London definitely have not gone up by 7.3%, not at all.

Central London has actually gone down by 1-2% this year, and has been stagnant for the last few years.

Believe it not but the government does seem interested in building lots of homes. Most Local Authorities do not. I’ve worked on dozens of the largest new housing schemes across the country in the last 10 years. They almost all were rejected by the Local Authority and a planning appeal was lodged with the Planning Inspectorate who overturns the Local authority decision.

People don’t want new homes built near them.

Believe it or not, the government doesn't answer to local authorities. They can easily change regulations so that local authorities can't stop building.

The NIMBY attitude in this country has to change.

Nobody wants to see them drop apart from people who don't own a house.

It's not just members of the government. That's just rubbish. Everyone who owns a house doesn't want the price to fall.

Also y building more houses in area X doesn't mean houses in area Y will fall in price.

People need to start relocating to where there is cheaper housing if they cannot afford to live in area Z of the country.

If you own a home and want to upsize, you benefit from a drop.
If you own a home and don't want to sell/borrow against it and you're not heavily margined, you don't suffer from a drop in prices.
If you own a massive portfolio of properties, all bought on margin and you're in debt up to your eyeballs, then yes, you don't want a drop.

Guess what percent of the country are the third group? Likely less than 1%. But maybe 99% has to suffer so that the 1% richest can continue to be the richest.

Sadly, important people in government and our MPs and their families have those huge portfolios. So they're not going to act against their own self-interest.

I'm sure there are people who own a house, and want to move up the ladder, who'd like to see a drop. The cost of doing so would be less.

Yeah. Ever-rising prices hurts everyone except the mega landlords and HNW property investors.

 

[HACO]

If you own a house outright, yes. If you have a mortgage on the house then it doesn't always work out like that.

For example, if you have a house currently valued at £250k with £175k outstanding mortgage and you want to buy a £500k house:
-House prices stay the same. You sell for £250k, pay off the remaining £175k on your mortgage and you've got £75k deposit for the 500k house (still valued at 500K) which is 15% deposit
-House prices drop 20%. You sell for £200k, pay off the remaining £175 on your mortgage and you've got £25k deposit for the £500k house which is now valued at £400k so you've got 6.25% deposit.

First case, you need to borrow £425k
Second case, you need to borrow £375k

Second case is still better for you. Yes you have a smaller deposit, but you also need to pay off a lot less. You're not disadvantaged in any way. And you pay less stamp duty as well.