So will the UK house prices ever come down ?

[Tunney]

As others have pointed out, London/SE England is a different proposition to the rest of the country. If you're buying outside of the London commuter zone, you should be fine.

London is crazy though. Even as a home-owner, I really hope that prices come down. We don't want to live in our current house forever! I can't see that happening any time soon though. When my partner and I moved in with each other, we sold our flats. Both sold at asking price to foreign investors within days.

 

[Xordium]

Whereas in reality when house prices stagnate (or fall) house builders stop building which increases demand and therefore breaks the stagnation cycle...this is what happened during the recession.

And the government could actually enforce the land purchased for the building of homes gets used in timely fashion rather than building just foundations. Except they don't. Increasing house prices works to the advantage of very few people - strangely enough the very people who have the power to influence policy.

My personal opinion is that this country has unsustainable house price costs already for many. I fail to see why this is a good thing for the vast majority. The government really needs to sort out this whole preoccupation we have with sticking absolutely everything in London.

 

[Nitefly]

With some kind of benefit tho, right?

Because basic logic means that anyone taking home less than £1,200 a month is not going to survive if rent is £1,200 Tax + NI is about 32% of gross income, therefore you need a salary of 1.2k*12*1.5 = £21,600.

That's just to pay the rent, nothing else. You won't manage to pay bills or feed yourself on that money, if your rent is £1200 a month.

lol?

Edit oh OK, I know the mix-up - it's my fault. Those people flat-share with others. They do not pay a rent of £1200.

 

[iamtheoneneo]

All these 'owners' that rent from the bank and believe endlessly rising prices are a good thing are completely missing the point. They've given up hammering home the fact no-one under 40 can get a foot on a ladder, they're now starting to talk about people unable to get on the second rung and are bringing up children in pokey flats. At least the 'youngsters' are just refusing to have kids, as there's no way they can afford them when you're paying thousands of pounds in rent and trying to save in a measly 0.5% ISA Bring on the crash.

This is simply not true. If you have a semi decent job and are good with your money you can easily get a deposit together in under 5 years. If your with a partner its even easier.

What I have found is that people are not willing to make compromises on their first home - YES its a big purchase, but people go in expecting to live in the same quality housing as when they were renting and often that is not the case. Whether thats actual size of home or even location.

and then they whinge that they cant get on the ladder, when their not willing to see it merely as a stepping stone.

 

[balky12]

This is simply not true. If you have a semi decent job and are good with your money you can easily get a deposit together in under 5 years. If your with a partner its even easier.

What I have found is that people are not willing to make compromises on their first home - YES its a big purchase, but people go in expecting to live in the same quality housing as when they were renting and often that is not the case. Whether thats actual size of home or even location.

and then they whinge that they cant get on the ladder, when their not willing to see it merely as a stepping stone.

The girlfriend and I live on the outskirts of London, both 25. As of 01/15 we will be saving. 2 years, £1k a month plus bonuses. Hopefully 2 years later we will have enough deposit for a £300k house. Won't get you much in the SE but it's a start, and do-able. Like you said, sacrifice is the hard part.

We are waiting till then because we had a blow out this year, knowing full well we won't be able to afford the holidays / festivalsfor next two years..

 

[glenimp617]

as confidence grows, payrises start coming back, house prices go up, interest rates will go up by a small amount

house price ain't going down, they may dip, but just look at the figures over the last fifty years

the thing is, it's all subjective (unless you're a landlord)

whilst the house you are in is worth more (making you feel rich), the one you want to move into is also worth more. It's only good if you are downsizing.

just try not to use your equity to remortgage and take a cash sum out. I've seen people do that and it ain't pretty (unless its for home improvements)

 

[Wizardskills]

This is simply not true. If you have a semi decent job and are good with your money you can easily get a deposit together in under 5 years. If your with a partner its even easier.

What I have found is that people are not willing to make compromises on their first home - YES its a big purchase, but people go in expecting to live in the same quality housing as when they were renting and often that is not the case. Whether thats actual size of home or even location.

and then they whinge that they cant get on the ladder, when their not willing to see it merely as a stepping stone.

I agree, the GF and I are looking to move out. We have worked hard and have saved up a quite sizeable deposit so it is defiantly doable even for people our age (28 and 26). The trouble at the moment is finding a decent house. Good ones are selling in a matter of hours and I simply refuse to put an offer on something I haven't seen.

 

[xs2man]

We were looking in Aberdeen back in '07 before the crash, and it was crazy in the NE too. We were looking at houses that went to closing date within a couple weeks. We were putting in offers of 50% over the asking price, and we were still well short. On one property, we were 50% over and were 7th out of 8 offers. Crazy housing markets aren't a new thing. Not by a LONG way.

In contrast, we bought our current property for £8k under valuation. To be fair, the stamp duty was around £8k, so that's why we got it for that. Plus the 50 mile each way commute. But as I don't go into the office much anymore, it wasn't really a problem.

But because we are so far from Aberdeen, we don't get hit by the Aberdeen bubble, so 2 years ago, when we re-mortgaged, our house was valued around £15k less than it was valued at in '07. We are remortgaging again next year, so hopefully it will be back to it's purchase value, but I'm not holding my breath. Would get me into a better LTV band though.

Anyway, it's not restricted to the SE. But it is what it is. It isn't easy, but it does take some saving to get on the housing market. We bought our first house at 23, then this big one at 27, so to say people can't get on the housing ladder until nearly 40 is absurd. We are only mid-30's and have been here for over a decade.

 

[Glaucus]

Unfortuntley not

We aren't building anywhere bear enough
We are obsessed with expensive crap build methodology
Government and banks continually prop it up
Build regs mean you have no choice but to get a mortgage with anyone else.

System is totally broke and means we all have a lower quality of live as we have to go massively in debt.

 

[bakes0310]

I do not see the problems with people buying houses around here, first time buyers are well catered for and the schemes in place mean people on average incomes are able to get into the housing market relatively easily. London is, like most capital cities, a special case and is not indicative of the market as a whole. Most the the issues with people struggling to get on the housing ladder is really a matter of their prioritisation with regards their income...they want the Car, House, Holidays in the sun and every weekend out on the town. For an anecdotal example, my wife (accountant) helped a friend budget his finances so he could buy a house...effectively she just cut out the takeaways he was eating 3 times a week, cut down his weekends out, reduced his annual holiday to one week instead of two fortnights abroad and told him to keep his car rather than changing it every three years...that was enough that he was able to save a 20% deposit in just over two years and buy his first two bed house. (we live in a relatively expensive region).

There is also too much emphasis on getting on the housing ladder anyway, most of Europe doesn't have such a market which prioritises house ownership in such a way.

No offence to your wife or friend but couldn't he work out where all his money is going, that he needed an accountant to solve this mystery?
Fair play it worked for him, so theres no harm, if it works it works.
It just reminds me of people my age (20's) moaning they have no money and they are using there overdraft, but they are boozing it up every weekend.

 

[gettothechopper]

I have just last month bought my first house (2 bed terrace)
I used to think it was impossible, until I actually bothered saving for a deposit
Being two of us earning obviosuly helps too

took me 15 months to save £20000, with a £35k wage (A month working abroad and on call weekends helped too)
misses had £10k

bought a £175k house with a £26k deposit, and get a decent rate of £750 a month (15% deposit is the key for getting decent intrest rate)

its not impossible, had to just cut out rubbish spending and only buy stuff you really need, take every oppertunity you can to make some money too

Im really not bothered about "making money" on it - just was very very fed up of rubbish letting agents bugging you with nonsence extra charges and invading your privacy, If better rules on renting were introduced then id imagine i would not have even been bothered with buying

I have to live in southampton too, which isnt bad really but certainly not as nice a place as id like to live

The bit that suprised me was how frantic the market is for first time buyers trying to get small houses - all the houses we looked at would get offer accepted (at least asking price) on the first day of being on the market (including ours)

Hopefully will only have to move again once more to something bigger, maybe in a nicer area, but thats at least 10 odd years away.

House market is a mess though - 1 or 2 nice small houses a month in a 30 mile radius, a load of rubbish 70's / 80's ones that no one wants or a brand new tiny flat in a maze of "affordable housing"

NIMBY's are what is stopping large numbers of new houses getting built round here too

Also lots of people buying houses, splitting them into two flats and then selling each flat for the price they paid for the house

 

[FortuitousFluke]

I purchased my house nearly a year ago now. My partner and I are 27/28 and we got lucky with the deposit due to assistance from family members.

Whilst I know that increasing prices mean very little as, when we choose to move, we will be selling for more to buy for more anyway. However, increasing prices should also shift our LTV ratio, so if when I come to remortgagemy LTV has been puched from 75% to 60% through appreciation and payment then my rates potentially improve. That's the main point for me.

With regards to when will it end, I think we're likely to see peaks and troughs as always but the generally trajectory will continue upwards until supply meets demand, even with relaxed laws and incentives we're way way way off that point.

What I think will be interesting is the effect of improved transport links on housing prices. When HS2 reaches completion it will mean that parts of the Midlands and Yorkshire could technically fall into the commuter belt. I used to live in Huntingdon which has a reasonable commuter base. After full roll out Birmingham and Manchester will offer comparable commute times.

 

[Allnamestaken]

You Done well Chopper .

Its really hard to get on £35k for me at the moment a lot of the jobs being advertised are being severely undervalued in my area.

I recently was employed in a position earning just under £23k which 6 years ago I did with a different company for £32k.

The salary for that field is level and there is not much difference between the various small/large companies in terms of pay.

Instead of salaries going up they have just gone down while the cost of living has gone up.

It frustrates me as I am sick of renting myself and paying for some other ***** mortgage.

 

[v0n]

I have just last month bought my first house (2 bed terrace)
I used to think it was impossible, until I actually bothered saving for a deposit
Being two of us earning obviosuly helps too

took me 15 months to save £20000, with a £35k wage (A month working abroad and on call weekends helped too)

Wow, saving £20,000 out of net salary of £26,500 per annum. You must have had literally no living costs at all!

 

[FoxEye]

Long, long, long but good article here:

http://www.lrb.co.uk/v36/n01/james-meek/where-will-we-live



Apparently house building has slumped to a pre-war low right now

[edit: The articles argues that NIMBY's aren't the main problem, as new laws since 2011 can force local councils to approve new housing. I've even seen that happen where I live. Council said no, went to appeal, govt said yes.

The arcticle argues that builders don't want to build the numbers of new houses we need - because it's in their interest to keep supply below demand, and for prices to be ever pushed upwards. Sure they want to build, but if they built in the kinds of numbers we need, their profits would go down.

Hence why it was a bad idea to stop the councils building houses themselves.]

 

[anything I don't mind]

Only way house prices will come down

a) ukip get in and leave the eu and put a stop on mass immigration, putting a hold on increases in demand.
b) have another economic recession which will lead to immigrants to go back to their home country, reducing demand on housing.
c) massive increase in supply of housing (unlikely due to the state not allowing it)
d) new laws that prevent foreign ownership on housing like in arab states, reducing demand and increasing supply.
e) have another economic recession which leads to interest rates to go up and push a lot of people in to unaffordable mortgages, increasing supply as they sell and reducing prices as supply outstrips demand.

 

[Allnamestaken]

This whole thing makes me sad.

 

[gettothechopper]

Wow, saving £20,000 out of net salary of £26,500 per annum. You must have had literally no living costs at all!

living costs were normal (im guessing?) was renting a £700 pm flat with misses, I paid most bills, wife paid council tax, half rent and half food each month
£1000 savings a month, still left me £100 pm for communting, and about £70 per week living money

the real bonus for me was £5k for working overseas for about a month, I know not everyone gets chances like that but some do and dont take them because its hard or they cant be bothered

 

[anything I don't mind]

Yes, it is a rubbish situation for everyone who does not already own a house.

I think the government should create some new laws on housing development that prevents new developments from being ridiculously small.

I bet if you look at that rubbish apartment blocks they just built near the station (i posted earlier), there was a lot of land there and they ended up building these pathetic tiny apartments. They should have been forced to create liveable apartments of a decent size. Even in third world countries they make apartments larger than that with a higher quality. They should have laws that prevent developers from creating such small and pathetic apartments. It wouldn't suprise me if the state forced the developers to create such small places. They probably think they are making them small to meet the low end market demand. They also probably forced them to make them in such a way that leaves a lot of open spaces between the buildings, further limiting the size of the properties. It is just the wrong way to think about housing development.

What they should do is force all the developers to create high end housing and apartments only. No low end apartments should be built going forwards, there is no need for them. By creating high end developments it increases the standard of living for everyone. The idea is that as these high end apartments are built, people in the middle level move up to the high end apartments, then people at the low end move up to the middle and so on. By just building rubbish apartments it decreases the standard of living of everyone in the end.

 

[MichaelAwkward]

Only way house prices will come down

a) ukip get in and leave the eu and put a stop on mass immigration, putting a hold on increases in demand.
b) have another economic recession which will lead to immigrants to go back to their home country, reducing demand on housing.

Immigration makes up only a tiny proportion of the demand for housing...